Houston researchers find alternate data for loan qualification

houston voices

Grocery purchase data can accurately predict credit risk for individuals without traditional credit scores, potentially broadening the pool of qualified loan applicants. Photo via Unsplash

Millions of consumers who apply for a loan to buy a house or car or start a business can’t qualify — even if they’re likely to pay it back. That’s because many lack a key piece of financial information: a credit score.

The problem isn’t just isolated to emerging economies. Exclusion from the financial system is a major issue in the United States, too, where some 45 million adults may be denied access to loans because they don’t have a credit history and are “credit invisible.”

To improve access to loans and peoples’ economic mobility, lenders have started looking into alternative data sources to assess a loan applicant’s risk of defaulting. These include bank account transactions and on-time rental, utility and mobile phone payments.

A new article by Rice Business assistant professor of marketing Jung Youn Lee and colleagues from Notre Dame and Northwestern identifies an even more widespread data source that could broaden the pool of qualified applicants: grocery store receipts.

As metrics for predicting credit risk, the researchers found that the types of food, drinks and other products consumers buy, and how they buy them, are just as good as a traditional credit score.

“There could be privacy concerns when you think about it in practice,” Lee says, “so the consumer should really have the option and be empowered to do it.” One approach could be to let consumers opt in to a lender looking at their grocery data as a second chance at approval rather than automatically enrolling them and offering an opt-out.

To arrive at their findings, the researchers analyzed grocery transaction data from a multinational conglomerate headquartered in a Middle Eastern country that owns a credit card issuer and a large-scale supermarket chain. Many people in the country are unbanked. They merged the supermarket’s loyalty card data and issuer’s credit card spending and payment history numbers, resulting in data on 30,089 consumers from January 2017 to June 2019. About half had a credit score, 81% always paid their credit card bills on time, 12% missed payments periodically, and 7% defaulted.

The researchers first created a model to establish a connection between grocery purchasing behavior and credit risk. They found that people who bought healthy foods like fresh milk, yogurt and fruits and vegetables were more likely to pay their bills on time, while shoppers who purchased cigarettes, energy drinks and canned meat tended to miss payments. This held true for “observationally equivalent” individuals — those with similar income, occupation, employment status and number of dependents. In other words, when two people look demographically identical, the study still finds that they have different credit risks.

People’s grocery-buying behaviors play a factor in their likelihood to pay their bills on time, too. For example, cardholders who consistently paid their credit card bill on time were more likely to shop on the same day of the week, spend similar amounts across months and buy the same brands and product categories.

The researchers then built two credit-scoring predictive algorithms to simulate a lender’s decision of whether or not to approve a credit card applicant. One excludes grocery data inputs, and the other includes them (in addition to standard data). Incorporating grocery data into their decision-making process improved risk assessment of an applicant by a factor of 3.11% to 7.66%.

Furthermore, the lender in the simulation experienced a 1.46% profit increase when the researchers implemented a two-stage decision-making process — first, screening applicants using only standard data, then adding grocery data as an additional layer.

One caveat to these findings, Lee and her colleagues warn, is that the benefit of grocery data falls sharply as traditional credit scores or relationship-specific credit histories become available. This suggests the data could be most helpful for consumers new to credit.

Overall, however, this could be a win-win scenario for both consumers and lenders. “People excluded from the traditional credit system gain access to loans,” Lee says, “and lenders become more profitable by approving more creditworthy people.”

------

This article originally ran on Rice Business Wisdom based on research by Rice University's Jung Youn Lee, Joonhyuk Yang (Notre Dame) and Eric Anderson (Northwestern). “Using Grocery Data for Credit Decisions.” Forthcoming in Management Science. 2024: https://doi.org/10.1287/mnsc.2022.02364.


Using biased statistics in hiring makes it more difficult to predict job performance. Photo via Getty Images

Houston research finds race, gender ineffective predictors of employee productivity

houston voices

The Latin phrase scientia potentia est translates to “knowledge is power.”

In the world of business, there’s a school of thought that takes “knowledge is power” to an extreme. It’s called statistical discrimination theory. This framework suggests that companies should use all available information to make decisions and maximize profits, including the group characteristics of potential hires — such as race and gender — that correlate with (but do not cause) productivity.

Statistical discrimination theory suggests that if there's a choice between equally qualified candidates — let's say, a man and a woman — the hiring manager should use gender-based statistics to the company's benefit. If there's data showing that male employees typically have larger networks and more access to professional development opportunities, the hiring manager should select the male candidate, believing such information points to a more productive employee.

Recent research suggests otherwise.

A peer-reviewed study out of Rice Business and Michigan Ross undercuts the premise of statistical discrimination theory. According to researchers Diana Jue-Rajasingh (Rice Business), Felipe A. Csaszar (Michigan) and Michael Jensen (Michigan), hiring outcomes actually improve when decision-makers ignore statistics that correlate employee productivity with characteristics like race and gender.

Here's Why “Less is More”

Statistical discrimination theory assumes a correlation between individual productivity and group characteristics (e.g., race and gender). But Jue-Rajasingh and her colleagues highlight three factors that undercut that assumption:

  • Environmental uncertainty
  • Biased interpretations of productivity
  • Decision-maker inconsistency

This third factor plays the biggest role in the researchers' model. “For statistical discrimination theory to work,” Jue-Rajasingh says, “it must assume that managers are infallible and decision-making conditions are optimal.”

Indeed, when accounting for uncertainty, inconsistency and interpretive bias, the researchers found that using information about group characteristics actually reduces the accuracy of job performance predictions.

That’s because the more information you include in the decision-making process, the more complex that process becomes. Complex processes make it more difficult to navigate uncertain environments and create more space for managers to make mistakes. It seems counterintuitive, but when firms use less information and keep their processes simple, they are more accurate in predicting the productivity of their hires.

The less-is-more strategy is known as a “heuristic.” Heuristics are simple, efficient rules or mental shortcuts that help decision-makers navigate complex environments and make judgments more quickly and with less information. In the context of this study, published by Organization Science, the heuristic approach suggests that by focusing on fewer, more relevant cues, managers can make better hiring decisions.

Two Types of Information "Cues"

The “less is more” heuristic works better than statistical discrimination theory largely because decision makers are inconsistent in how they weight the available information. To factor for inconsistency, Jue-Rajasingh and her colleagues created a model that reflects the “noise” of external factors, such as a decision maker’s mood or the ambiguity of certain information.

The model breaks the decision-making process into two main components: the environment and the decision maker.

In the environment component, there are two types of information, or “cues,” about job candidates. First, there’s the unobservable, causal cue (e.g., programming ability), which directly relates to job performance. Second, there's the observable, discriminatory cue (e.g., race or gender), which doesn't affect how well someone can do the job but, because of how society has historically worked, might statistically seem connected to job skills.

Even if the decision maker knows they shouldn't rely too much on information like race or gender, they might still use it to predict productivity. But job descriptions change, contexts are unstable, and people don’t consistently consider all variables. Between the inconsistency of decision-makers and the environmental noise created by discriminatory cues, it’s ultimately counterproductive to consider this information.

The Bottom Line

Jue-Rajasingh and her colleagues find that avoiding gender- and race-based statistics improves the accuracy of job performance predictions. The fewer discriminatory cues decision-makers rely on, the less likely their process will lead to errors.

That said: With the advent of AI, it could become easier to justify statistical discrimination theory. The element of human inconsistency would be removed from the equation. But because AI is often rooted in biased data, its use in hiring must be carefully examined to prevent worsening inequity.

------

This article originally ran on Rice Business Wisdom based on research by Rice University's Diana Jue-Rajasingh, Felipe A. Csaszar (Michigan) and Michael Jensen (Michigan). For more, see Csaszar, et al. “When Less is More: How Statistical Discrimination Can Decrease Predictive Accuracy.”

As corporate debt markets continue to grow in importance, it will become crucial for investors and regulators to understand the nuanced factors influencing their liquidity. Photo via Getty Images

Rice research on bond and stock market differences, earnings variations

houston voices

At the end of every quarter, publicly traded companies announce their profits and losses in an earnings report. These updates provide insight into a company’s performance and, in theory, give investors and shareholders clarity on whether to buy, sell or hold. If earnings are good, the stock price may soar. If they’re down, the price might plunge.

However, the implications for the stock price may not be immediately clear to all investors. In the face of this uncertainty, sellers will ask for high prices, and buyers will offer low ones, creating a significant “bid-ask spread.” When this happens, it becomes more costly to trade, and the stock becomes less liquid.

This is a well-documented effect on equity stock markets. However, according to research by Stefan Huber (Rice Business), Chongho Kim (Seoul National University) and Edward M. Watts (Yale SOM), the corporate bond market responds differently to earnings news. This is because bond markets differ from stock markets in a significant way.

Stocks v. Bonds: What Happens When Earnings Are Announced?

Equities are usually traded on centralized exchanges (e.g., New York Stock Exchange). The exchange automatically queues up buyers and sellers according to the quote they’ve entered. Trades are executed electronically, and the parties involved are typically anonymous. A prospective buyer might purchase Microsoft shares from someone drawing down their 401(k) — or they could be buying from Bill Gates himself.

Corporate bond markets work differently. They are “over-the-counter” (OTC) markets, meaning a buyer or seller needs to find a counterparty to trade with. This involves getting quotes from and negotiating with potential counterparties. This is an inherent friction in bond trading that results in much higher costs of trading in the form of wider bid-ask spreads.

Here’s what Huber and his colleagues learned from the research: Earnings announcements prompt many investors to trade. And on OTC markets, potential buyers and sellers become easier to find and negotiate with.

A Stronger Bargaining Position for Bonds

According to Huber, “When earnings information comes out, a lot of people want to trade. In bond markets, that makes it much easier to find someone to trade with. The more options you have to trade, the stronger your bargaining position becomes, and the lower your trading costs go.”

He compares the process to shopping in a market with a flexible approach to pricing.

“Let's say you're at a farmers market and you want to buy an apple,” Huber says. “If there is only one seller, you buy the apple from that person. They can ask for whatever price they want. But if there are multiple sellers, you can ask around, and there is potential to get a better price. The price you get depends on the number of options you have in trading partners.”

What’s at Stake?

Although bonds receive less attention than equities, the stakes are high. There is about $10 trillion in outstanding corporate debt in the U.S., and more than $34 billion in average daily trading volume.

A detailed record of bond trades is available from the Financial Industry Regulatory Authority (FINRA), which requires that trades be reported via their Trade Reporting and Compliance Engine (TRACE).

The study from Huber and co-authors uses an enhanced version of TRACE to examine trades executed between 2002 and 2020. The team analyzed the thirty-day periods before and after earnings announcements to gather data about volume, bid-ask spreads and other measures of liquidity.

They find that, like on the stock market, there are more investors and broker-dealers trading bonds around earnings announcements. However, unlike on the stock market, transaction costs for bonds decrease by 6 to 7 percent in the form of bid-ask spreads.

What Sets This Research Apart?

“Taking a purely information asymmetry-based view would predict that what happens to stock liquidity would also happen to bonds,” Huber says. “A piece of information drops, and some people are better able to work with it, so others price protect, and bid-ask spreads and the cost of trading go up.”

“But if you consider the search and bargaining frictions in bond markets, you get a more nuanced picture. While information asymmetry increases, like it does on stock markets, the information prompts more investors into bond trading, which makes it easier to find counterparties and get better transaction prices. Consequently, bid-ask spreads go down. This search and bargaining friction does not really exist on equities exchanges. But we cannot ignore it in OTC markets.”

As corporate debt markets continue to grow in importance, it will become crucial for investors and regulators to understand the nuanced factors influencing their liquidity. This study provides a solid foundation for future research.

------

This article originally ran on Rice Business Wisdom. For more, see “Earnings News and Over-the-Counter Markets.” Journal of Accounting Research 62.2 (2024): 701-35.

Putting students and families at the center of strategy will optimize resources and improve academic outcomes. Photo via Getty Images

Houston expert: How adopting business strategies in the education sector can improve results

houston voices

It’s no secret: K-12 public schools in the U.S. face major challenges. Resources are shrinking. Costs are climbing. Teachers are battling burnout. Student outcomes are declining.

There are many areas of concern.

Some difficulties are intangible, inescapable and made worse by crises like the COVID-19 pandemic. Some can be fixed or alleviated by wisely allocating resources. And others — like a lack of strategic focus — can be avoided altogether.

It’s this final area, strategic focus, that researchers Vikas Mittal (Rice Business) and Jihye Jung (UT-San Antonio) address in a groundbreaking study. According to Mittal and Jung, superintendents and principals misallocate vast amounts of time and resources trying to appease their many stakeholders — students, parents, teachers, board trustees, community leaders, state evaluators, college recruiters, potential employers, etc.

Instead, Mittal and Jung show, administrators need to put their entire focus on one key stakeholder — the “customer,” i.e. students and families.

It may sound strange to call students and families “customers” in the context of public education. After all, 5th-period Spanish isn’t like buying an iPhone or fast food. The classroom is not transactional. Students and caregivers are part of a broader relational context that most directly involves teachers and peers. And students are expected to contribute to that context.

But K-12 public funds are tied to enrollment and attendance numbers. This means the success or failure of a school or school district ultimately comes down to “customer” satisfaction.

Beware the Stakeholder Appeasement Trap

Here’s what happens when students and families become dissatisfied with their school:

As conditions deteriorate, families (who can afford to) may choose to homeschool or move their children to private or better-performing public schools. As a result, enrollment revenue decreases, which forces administrators to cut costs. Cut costs lead to worsened performance and lower satisfaction among students and families. Lower satisfaction leads to further enrollment loss, which leads to more cost-cutting. And so on. (Schools need about 500-600 students to break even.)

It’s a vicious downward spiral, and it’s not unusual for schools to become trapped in it. To avoid this vortex, administrators end up adopting a “spray and pray” or “adopt and hope” approach, pursuing various stakeholder agendas in hopes that one of them will be the key to institutional success. Group A wants stronger security. Group B wants improved internet access. Group C wants better facilities. Group D wants to expand athletics.

It’s an understandable impulse to make everyone happy. However, Mittal and Jung find that the “stakeholder appeasement” approach dilutes strategic focus, wastes resources and creates a bloat of ineffective initiatives.

Initiative bloat isn't a benign problem. The labor of implementing programs inevitably falls on teachers and frontline staff, which can result in mediocre performance and burnout. As initiatives multiple over time, communication lines become strained and, distracted by the administration's efforts to please everyone, teachers and frontline staff fail to satisfy students and families.

Pay Attention to Lift Potential

Using data from administrator interviews and more than 10,000 parent surveys, Mittal and Jung find that students and families only value a few strategic areas. By far the most important is family and community engagement, followed by academics and teachers. The least important, somewhat surprisingly, is extracurriculars like athletics programs.

The assumption that athletics would be high on the list of student and family priorities raises a crucial point in the study. Mittal and Jung note that it’s a serious error to assume that the more a strategic area is mentioned the more it drives customer value.

“Conflating the two — salience and lift potential — is the single biggest factor that can mislead strategy planning,” the researchers say.

A customer-focused strategy prioritizes lift potential — meaning it allocates budgets, people and time to the areas that have the highest capacity to increase customer value, as measured by customer satisfaction. If family and community engagement is the most important strategic area, then savvy administrators will invest in the “execution levers” that improve it.

For instance, Mittal and Jung find that allowing input on school policies is the most effective lever for demonstrating family and community engagement. Another important strategic area is improving the quality of teachers, and one of the most effective ways of doing this is to emphasize their academic qualifications.

Just as important as instituting effective customer-focused initiatives is de-emphasizing those that are ineffective. It can be a difficult process to stop and de-emphasize initiatives, however ineffective. But ultimately, the benefit is that teachers and frontline staff will be able to concentrate on the execution levers that matter.

This strategic transformation can’t happen overnight. Developing the framework will require a school district 18 to 24 months, Mittal and Jung estimate. Embedding it into practice can take an additional 12 to 18 months. For example, it would involve changing the way senior administrators, school principals and teachers are held accountable. Instead of emphasizing standardized test scores, which do not add to customer satisfaction, it’s more effective to concentrate on input factors that directly impact the quality of academics and learning.

To help schools develop and implement a customer-focused strategy, future research can focus on frameworks for guiding schools to maximize the areas of value that students and families care about most.

------

This article originally ran on Rice Business Wisdom. For more, see Mittal and Jung, “Revitalizing educational institutions through customer focus.” Journal of the Academy of Marketing Science (2024): https://doi.org/10.1007/s11747-024-01007-y.

Temporary gatherings — like conferences and hackathons — are essential to attracting third-party developers. Photo via Getty Images

Rice expert: Why tech companies should sponsor hackathons

houston voices

Companies like Amazon, Microsoft and Apple depend on third-party developers to create applications that improve the user experience on their platforms. However, given the many options available, developers face a daunting task in deciding which platform to focus their efforts on.

“Developers are faced with imperfect information,” says Rice Business assistant professor Tommy Pan Fang. “They don’t have an overview of the entire technology landscape.”

A team of researchers, consisting of Fang, Andy Wu (Harvard University) and David Clough (University of British Columbia), set out to investigate how temporary gatherings like “hackathons” — in-person software development competitions — might influence a developer’s choice of software platform.

Hackathons like Rice University’s annual HackRice draw developers looking to pick up new skills and create applications with teammates. Many of these events are sponsored by software platform companies.

The research team conjectured that hackathon attendees are more likely to adopt a particular platform if any of the following conditions are true:

  • A high number of fellow attendees have already embraced it.
  • A fellow attendee has built an award-winning hackathon project on it.
  • The platform that sponsors the hackathon is already popular.

To test their theories, the researchers followed 1,302 software developers participating in 167 hackathons from January 2014 to May 2017. Twenty-nine different platforms sponsored the hackathons. Fang and his colleagues tracked developers’ platform choices before and after the in-person events.

The researchers found that temporary gatherings — like hackathons, conferences and trade fairs — make a difference.

Developers with greater technical expertise were more likely to use a platform widely embraced by fellow hackathon attendees. And with every 10% increase in the number of hackathon attendees already using a given platform, other attendees were 1.2% more likely to try out that platform themselves the following year.

They also found that platforms benefit from sponsoring temporary gatherings, like hackathons.

Developers who attended a hackathon sponsored by a particular platform were 20.4% more likely to adopt that platform in the following year, compared to developers who either did not attend any hackathon or attended one without a sponsor.

Part of the reason for the findings is that developers at hackathons exert social influence on each other, both during organized hackathon events like competitions and workshops, as well as informal ones including ping pong tournaments or nights playing video games.

“The social interaction and seeing their peers be successful with the tools and what’s fashionable impacts the tools they decide to adopt,” says Fang. “For developers trying to figure out what technology to adopt in a world with imperfect information and uncertainty, having a gathering can be a beacon.”

Interviews with hackathon organizers, sponsors and developers in the U.S. and Canada backed up the researchers’ findings. Interviewees shared how they learned from their interactions with fellow developers during hackathons.

“When I’m walking around, it becomes noticeable what technologies people are using,” said a veteran of 15 hackathons. Another noted that if more people use a certain application programming interface, “it’s lower risk because it will be usable.” They added, “Most people just follow others.”

The study has implications for both developers and software platform companies alike. Results suggest hackathons can be a valuable venue for developers, not only to pick up new skills, but also to help them identify which platforms to use in the first place. For software companies, the lesson is simple: Sponsoring hackathons can be good for business.

Future research could look at how other types of events like conferences, tournaments and world’s fairs might impact how people end up adopting technologies, especially emerging ones, Fang says. For example, a company like OpenAI could use these types of in-person events to garner support and build momentum for its products.

“Companies that may have taken a step back during Covid should reevaluate in-person events to get people excited and regain momentum for their platforms,” Fang says. “The take-home message is, go out there and sponsor these events.”

This article originally ran on Rice Business Wisdom. For more, see Fang, et al. “Platform diffusion at temporary gatherings: Social coordination and ecosystem emergence.” Strategic Management Journal 42.2 (2021): 233-272. https://doi.org/10.1002/smj.3230.

In emerging markets, pricing — not reputation — drives the partnership between underwriter and IPO. Photo via business.rice.edu

How to evaluate an IPO, according to Houston researchers

houston voices

Many investors assume they can judge the strength of an IPO based on the reputation of the underwriter supporting it.

However, a recent study by Rice Business professors Anthea Zhang and Haiyang Li, along with Jin Chen (Nottingham University) and Jing Jin (University of International Business and Economics), proves this is only sometimes true — depending on how mature the stock exchange is.

Getting your company listed on the stock market is a big step. It opens new opportunities to raise money and grow the business. But it also means facing increased regulations, reporting requirements and public scrutiny.

To successfully launch an initial public offering (IPO), most companies hire “underwriters” — financial services firms — to guide them through the complex process. Because underwriters have expertise in valuations, filing paperwork and promoting to investors, they play a crucial role in ushering companies onto the market.

In well-established markets like the New York Stock Exchange (NYSE), an underwriter’s reputation carries immense weight with investors. Top-tier banks like Goldman Sachs have built their reputations by rigorously vetting and partnering with only the most promising companies. When Goldman Sachs takes on the role of underwriter, it sends a strong signal to potential investors that the IPO has met stringent standards. After all, a firm of Goldman’s caliber would not risk tarnishing its hard-earned reputation by associating with subpar companies.

Conversely, IPO firms recognize the value of having a prestigious underwriter. Such an association lends credibility and prestige, enhancing the company’s appeal. In a mature market environment, the underwriter’s reputation correlates to the IPO’s potential, benefiting both the investors who seek opportunities and the companies wanting to make a strong public debut.

However, assumptions about an underwriter’s reputation only hold true if the stock exchange is mature. In emerging or less developed markets, the reputation of an underwriter has no bearing on the quality or potential of the IPO it pairs with.

In an emerging market, the study finds, investors should pay attention to how much the underwriter charges a given IPO for their services. The higher the fee, the riskier it would be to invest in the IPO firm.

To arrive at their findings, the researchers leveraged a unique opportunity in China’s ChiNext Exchange. When ChiNext opened in 2009, regulations were low. Banks faced little consequence for underwriting a substandard IPO. Numerous IPOs on ChiNext were discovered to have engaged in accounting malpractice and inaccurate reporting, resulting in financial losses for investors and eroding confidence in the capital markets. So, for 18 months during 2012-2013, ChiNext closed. When it reopened, exchange reforms were stricter. And suddenly, underwriter reputation became a more reliable marker of IPO quality.

“Our research shows how priorities evolve as markets mature,” Zhang says. “In a new or developing exchange without established regulations, underwriter fees paid by IPO firms dictate the underwriter-company partnership. But as markets reform and mature, reputation and quality become the driving factors.”

The study makes a critical intervention in the understanding of market mechanisms. The findings matter for companies, investors and regulators across societies, highlighting how incentives shift, markets evolve and economic systems work.

The research opens the door to other areas of inquiry. For example, future studies could track relationships between underwriters and companies to reveal the long-term impacts of reputation, fees and rule changes. Research along these lines could help identify best practices benefiting all market participants.

“In the future, researchers could explore how cultural norms, regulations and investor behaviors influence IPO success,” says Li. “Long-term studies on specific underwriter-firm pairs could reveal insights into investor confidence and market stability. Understanding these dynamics can benefit companies, investors and policymakers alike.”

------

This article originally ran on Rice Business Wisdom and was based on research from Yan “Anthea” Zhang, the Fayez Sarofim Vanguard Professor of Management – Strategic Management at Rice Business, and Haiyang Li, the H. Joe Nelson III Professor of Management – Strategic Management at Rice Business.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

2024's 5 most-read startup feature stories

year in review

Editor's note: As the year comes to a close, InnovationMap is looking back at the year's top stories in Houston innovation. This past year, InnovationMap featured profiles on dozens of these Houston startups — from health tech to startups fostering community. Here are five Houston startup features that stood out to readers this year — be sure to click through to read the full story.

Houston immuno-oncology company reaches next FDA milestone, heads to phase 2 trial

A Houston company with a promising immuno-oncology is one step closer to delivering its cancer-fighting drug to patients who need it. Photo via Getty Images

A Houston immuno-oncology company has recently made major headway with the FDA, including both a fast track and an orphan drug designation. It will soon start a phase 2 trial of its promising cancer fighting innovation.

Diakonos Oncology was born in 2016, the brainchild of Baylor researchers already hard at work in the realm of dendritic cell vaccines. Drs. Will Decker, Matt Halpert, and Vanaja Konduri partnered with Dan Faust, a Houston businessman and pharmacist, to bring their treatment to the public, says COO Jay Hartenbach.

The name Diakonos means “deacon or servant in Greek,” he explains. “A lot of companies end up focusing on treating a specific disease or cancer and what you end up having is a significant amount of potential but with a lot of tradeoffs and downsides. And so our goal is we need to eliminate the cancer but we can't harm or dramatically malign the patient in doing so.” Continue reading.

Houston founder taps into AI tech to create game-changing healthy eating platform

A Better Meal — a new app from a Houston founder — gives you all the tools you need to make healthier food choices. Photo via abettermeal.com

After many years of living to eat, a large swath of American society is now facilitating a seismic shift to the healthier alternative, eating to live.

But here’s the rub: eating healthy is confusing, time consuming and, unfortunately, oftentimes pricey.

So, anyone that can come in and cut through the healthy eating machine can carve out a necessary niche in the marketplace.

Enter Houstonian Mark Semmelbeck, founder and CEO of A Better Meal, a platform created to help busy families plan healthy meals easier and to make gradual improvements to their health and well-being.

“My vision is to use rapidly expanding AI technology together with the knowledge and wisdom of an active community to take the stress out of meal planning and improving nutrition,” says Semmelbeck, a seasoned oil and gas executive with over 30 years of experience in founding companies. “While developing the technology for the app, my daughter gave me two beautiful grandkids who both have significant food allergies. Combine that with the fact I now have five cardiac stents and the significance of eating well while paying attention to the details has only grown in importance.” Continue reading.

Hardtech startup moves into Houston area with new Conroe facility, eyes tests in space

FluxWorks, a hardtech startup, opened its new home-base in Conroe, Texas. Photo courtesy FluxWorks

FluxWorks, a hardtech startup, recently opened its new base of operations in Workhub Developments’ Conroe location.

Founded in College Station by CEO Bryton Praslicka, FluxWorks specializes in making contactless magnetic gears for use in extreme conditions. At 9,000 square feet, the new Conroe facility is a result of discussions with Governor Greg Abbott's office and the Greater Houston Partnership, who introduced the company’s leadership to the Conroe Economic Development Council, encouraging their move, Praslicka tells InnovationMap.

“The pieces of the puzzle were all there, and with the support of the local, state, and federal government, we were thrilled to move to Conroe,” Paslicka says. Continue reading.

Houston startup secures IBM partnership for AI-backed consumer tech

IBM and Boxes recently partnered to integrate the IBM watsonx Assistant into Boxes devices, providing a way for consumer packaged brands to find out more than ever about what its customers like and want. Photo courtesy of Boxes

With the help of a new conversational artificial intelligence platform, a Houston startup is ready to let brands get up close and personal with consumers while minimizing waste.

IBM and Boxes recently partnered to integrate the IBM watsonx Assistant into Boxes devices, providing a way for consumer packaged brands to find out more than ever about what its customers like and want.

The Boxes device, about the size of a 40-inch television screen, dispenses products to consumers in a modern and sustainable spin on the old-fashioned large vending machine.

CEO Fernando Machin Gojdycz learned that business from his entrepreneur father, Carlos Daniel Machin, while growing up in Uruguay.

“That’s where my passion comes from — him,” Gojdycz says of his father. In 2016, Gojdycz founded Boxes in Uruguay with some engineer friends. Continue reading.

Houston founder aims to help find your purpose, make strategic connections over a cup of coffee

Cup of Joey has expanded across Houston to help make valuable connections to Houston entrepreneurs. Photo courtesy of Cup of Joey

What is your purpose in life? One Houstonian is asking that question of his fellow entrepreneurs all across town.

Joey Sanchez founded Cup of Joey, a weekly meetup opportunity for innovators, business leaders, and the whole Houston community. The events are a place not only to share a cup of coffee but also their very own mission in life.

It all started in 2021 at the Houston Tech Rodeo, an initiative from Houston Exponential, where Sanchez worked as a director of corporate engagement. Texas had just opened social distancing in public events since the beginning of the COVID-19 pandemic, and Sanchez was finding ways to reconnect the Houston community.

‘We thought what better way than over a cup of coffee?” Since then, Sanchez has connected thousands of people based on purpose every Friday for the past three and a half years. Continue reading.

3 clean energy innovators make Forbes list of top young energy professionals

under 30

A handful of Houstonians have been named to the Forbes 30 Under 30 Energy and Green Tech list for 2025.

Kip Daujotas is an investment associate at Aramco Ventures, a $7.5 billion venture capital arm of the world's largest energy company. Houston is the Americas headquarters for Saudi Aramco. Since its inception in 2012, Aramco Ventures has invested in more than 100 tech startups. Daujotas joined the team over two years ago after studying for an MBA at Yale University. He led Aramco’s first direct air capture (DAC) investment — in Los Alamos, New Mexico-based Spiritus.

Also representing the corporate side of the industry, Wenting Gao immigrated from Beijing to obtain an economics degree from Harvard University, then got a job at consulting giant McKinsey, where she recently became the firm’s youngest partner. Gao works on bringing sustainability strategies to energy and materials companies as well as investors. Her areas of expertise include battery materials, waste, biofuels, and low-carbon products.

Last but not least, Houston entrepreneur Rawand Rasheed is co-founder and CEO of Houston-based Helix Earth. He co-founded the startup after earning a doctoral degree from Rice University and co-inventing Helix’s core technology while at NASA, first as a graduate research fellow and then as an engineer. The core technology, a space capsule air filtration system, has been applied to retrofitting HVAC systems for commercial buildings.

Each year, Forbes 30 Under 30 recognizes 600 honorees in 20 categories. The 2025 honorees were selected from more than 10,000 nominees by Forbes staff and a panel of independent judges based on factors such as funding, revenue, social impact, scale, inventiveness, and potential.

Specifically, the Energy & Green Tech category recognizes young entrepreneurs driving innovation that’s aimed at creating a cleaner, greener future.

“Gen Z is one of the fastest-growing groups of entrepreneurs and creators, who are reshaping the way the world conducts business, and our Under 30 class of 2025 proves that you can never begin your career journey too early,” says Alexandra York, editor of Forbes Under 30. “With the expansion across AI, technology, social media, and other industries, the honorees on this year’s list are pushing the boundaries and building their brands beyond traditional scopes.”

------

This article originally ran on EnergyCapital.

Houston expert: How leaders can manage divisive topics in the workplace to maintain a unified culture

guest column

Social issues to economic pressures and personal challenges are all stressors businesses must face and navigate. When employees face these obstacles, they can impact their performance. Amid it all, business leaders must adopt proactive strategies to maintain morale, professionalism and productivity.

People bring divisive topics into the workplace. Everyone has a different opinion on today’s news and current events, which can excite some and alienate others. Below are key strategies that employers can implement to manage potential conflicts and foster a positive work environment.

Create clear policies

Tempering controversial topics and cultural discussions is done with clear policies that outline acceptable behaviors. These policies should cover physical and virtual workspaces, specifying topics and content that are appropriate for work. What may seem like neutral items, like photos or trinkets seen on a video call, can sometimes stir controversy if they carry controversial associations.

Policies need to clearly state what is considered controversial cultural discussions and what is acceptable to address in the office or post on social media. Exceptions may be needed for discussions protected under the National Labor Relations Act, such as employees discussing wages. Removing vagueness helps set clear expectations and avoid misunderstandings.

It’s critical for leadership to follow the policies they developed. By their own actions, leadership can show the importance of staying neutral and professional at work. This sets a standard others can follow, resulting in a more focused and cohesive workplace. Conversely, if leaders openly discuss hot topics, employees may feel encouraged to do the same, creating undue tension among team members.

Remember clients and customers

Clients and customers likely have different opinions than your business leaders. Avoiding divisive topics and discussions helps bolster good working relationships with clients and customers who most certainly have a wide range of cultural views.

Everyone within the company, from the top down, should focus on the company's core mission. This laser focus will help maintain client relationships.

Strengthen mission and values

Most things today can become politicized, so it can be beneficial to take a close look at the company’s mission statement and values. It’s important to ensure these statements continue to reflect the company’s commitment to positive contributions for the broader community, clients, and employees. No matter the size of the company, the mission and values should provide a unifying purpose that can help buffer the workplace from tensions.

In today’s complex cultural landscape, it is important to create a culture of respect, neutrality, and complete focus on the company’s mission.

------

Jill Chapman is a director of early talent programs with Insperity, a leading provider of human resources and business performance solutions.

View All Listings