7 Houston entrepreneurs pitch their companies to famed Silicon Valley investor

#HTXTechRodeo

Investor Jason Calacanis lent his time and expertise to seven Houston startups. Photo via twitter.com/houex

Imagine having to pitch your company to a famed investor who has made investments in over 200 companies — seven of which achieved unicorn status. Now, imagine having to do that onstage in front of an audience — in person and virtually viewing.

That was seven Houston entrepreneurs' morning on March 4 during Houston Tech Rodeo. Jason Calacanis heard from the founders and gave his feedback on their business models, as well as general pitch advice. While some of his notes were in the realm of constructive criticism, he stayed pretty positive — for the most part.

"If you're a founder, you're signing up for a 70 percent failure. It's basically a suicide mission, except you don't actually die. You just hit the reset button and go again," Calacanis says to the crowd.

Calacanis also has a great deal of optimism for the region itself, noting on the potential of the innovation ecosystem, and, as an aside, the local basketball team.

"There's no reason Houston as big as a center as Austin has become," Calacanis says. "All it takes is for some of the rich people to say, 'instead of investing in some bond or Wall Street somewhere where they don't know what's going on and to take it and pay it forward with an entrepreneur."

Here are the seven Houston companies that pitched fir Calacanis, as well as some of his feedback.

Topper Luciani, CEO and founder of Goodfair

goodfair

Houston-based Goodfair sells bundles of used clothing at a low cost. Photo courtesy of Goodfair

Kicking things off was Topper Luciani, CEO and founder of Goodfair, CEO and founder of Goodfair. On a mission to counteract the pollution of fast fashion, the company, which launched in 2018, sells second-hand clothing using "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.

"Climate chance is Gen Z's crisis, and they are our customers," Luciani tells Calacanis and the crowd.

Goodfair expects to do $5 million in revenue this year, as well as raise its seed round. Calacanis give Luciani advice to make sure he answers the question of, in a world with recycled clothing stores and a growing need for environmentalism, why now?

Katharine Forth, CEO and founder of Zibrio

Balancing is important throughout your life, and Zibrio has the tools and tips for you to use to stay centered. Pexels

From NASA to your bathroom floor — Katharine Forth, CEO and founder of Zibrio, has found a new way to track balance. With her company, people can have the everyday ability to figure out how balanced they are on scale of 1 to 10. The scale gathers data from your weight, your postural control, your muscles and other factors to calculate the rating.

But Forth's business is split between two products — a consumer-focused scale and a scale made for medical professionals to use. Calacanis says it's one scale too many and to focus on just one for now. He compared the company to if Uber tried to launch its upgrades its made over the years all at once.

"You're coming out of the gate with UberPool and UberBlack. Big mistake," he says.

Amy Gross, founder and CEO, VineSleuth Inc

vinesleuth

Houston-based VineSleuth created a custom algorithm to match you with new wines based on wines you've had in the past. Courtesy of VineSleuth

Picking wine out isn't rocket science, and yet, "confusion is costing the industry billions," says Amy Gross, founder and CEO, VineSleuth Inc. The company's custom algorithm is backed by research from sensory scientists at Cornell University, and relies on both data collection and machine learning to determine specific wines that will match an individual customer's tastes.

The B2B approach has launched in a few restaurants around town and, as of this week, the Houston Livestock Show and Rodeo's Wine Garden. But how Gross is currently approaching business isn't exactly attractive to investors.

"The business comes across as a small niche business, which is going to cause investors to run," Calacanis explains.

His advice is to use the technology to prove to restaurants and bars that they are overpaying for their wines.

Panos Moutafis, CEO and co-founder, Zenus Biometrics

Zenus Biometrics uses its facial recognition software to provide seamless check in at events around the world. Courtesy of Zenus Biometrics

What started as a convenient way to check into events is now a facial recognition solution to event data. Zenus Biometrics can scan faces of event attendees for security — but also for data analytics, says Panos Moutafis, CEO and co-founder.

While the tech company has already evolved, Calacanis saw even more potential for the software, comparing it to the iPhone. The device is used more for a camera and app usage than an actual phone.

"As technologists we build something," Calacanis says. "Then we find out what people actually use it for."

While based in Houston now, Moutafis mentions that he will soon be relocated to Austin.

Safir Ali, co-founder and CEO of Hamper

Houston-based Hamper, which makes dry cleaning convenient, won the Rockets and BBVA Compass' LaunchPad competition. Courtesy of Hamper

Safir Ali grew up in his parents' dry cleaning store, and he observed that the biggest inconvenience for customers was them trying to make it to the cleaners to get their clothes before it closed. His company, Hamper, aims to provide a solution as "the Red Box of dry cleaning." Customers can deposit their dry cleaning in a kiosk in their office building, and it will be delivered to pick-up locations.

Calacanis liked that Ali has a background in the dry cleaning business."It takes somebody who is so obsessed that they aren't going to give up," he says, adding that he liked Ali's story.

"When you have something new – something that's novel, you could get a lot of attention," Calacanis says. "For things that are not novel, you have to use performance. You have to use the metrics."

Dyan Gibbens, founder and CEO, Trumbull Unmanned

Trumbull Unmanned equips energy companies with data-retrieving drones. Photo via trumbullunmanned.com

Trumbull Unmanned has created an enterprise software company to analyze data collected from drones flying over oil and gas sites. The technology allows workers to maintain a safe distance and still collect the information needed. Dyan Gibbens, founder and CEO, has secured some impressive contracts with companies, including Exxon.

Calacanis asked Gibbens about those contracts and how much they were usually for, but didn't like her first answer.

"Every answer we get as investors is, 'It depends,'" Calacanis says, explaining a "pro tip" for entrepreneurs. " You want to lead with some examples and get some ground truth. Sell us that ground truth."

Calacanis' next piece of advice for Gibbens was to add a second set of data collecting technology, such as a moisture sensor or heat sensor, creating two sets of data for clients.

"Being agnostic to how you solve the problem is [a big opportunity]. Also, that becomes an upsell," Calacanis says.

Ksenia Yudina, founder and CEO, UNest

UNest is a tax-free way to save money for your children's education. Photo via unestapp.com

UNest is using user-friendly app technology to set up college funds for millennial parents. And Founder Ksenia Yudina has gotten some great reception, which has caused financial advisers to take note and even reach out. But Calacanis says they are, in a way, the enemy for her product and she needs to not spread out her resources trying to partner with financial advisers.

"Part of being a successful founder is knowing what you need more and what to stay focused on," Calacanis says. "If you remain a product that people like, everyone is going to drown you in opportunities. And as CEO you have to know when to say no."

The winner of the contest will be announced at a Rockets game in early April. Courtesy of Greater Houston Convention and Visitors Bureau

Houston Rockets, BBVA launch annual startup competition

game on

It's game on for Houston startups looking to compete in the Launchpad contest backed by BBVA USA and the Houston Rockets.

Houston startups have until February 28 to submit their companies for the competition. Judges from BBVA and the Rockets will select four by late March, and fans will vote on their favorite company. The winner will be presented with a $10,000 check at a Rockets game in late April. The winning startup will also receive consultations with Rockets and BBVA USA executives.

It's the fourth time BBVA has sought out entrepreneurs, but last year the organization revamped the program to focus on technology-driven startups.

"Over the past three years, we have been proud to partner with BBVA to highlight small businesses in Houston and their contribution to our economy," says Rockets Chief Revenue Officer Gretchen Sheirr. "Entering its fourth year, the Launchpad contest seeks nominees focused on using best in class digital strategies to enhance their small business. We look forward to reviewing submissions and honoring the great work that is being done by these businesses in our community.

BBVA's new Houston CEO Dillan Knudson, who was promoted to his new position in November, is excited for his inaugural involvement in the contest.

"It's extremely exciting to collaborate with the Rockets for the first time, and for such a great initiative that helps Houston's thriving small business scene," says Knudson. "Part of my new role is to create opportunities and financial freedom for Houston's communities through the bank's ample resources, and to do that in collaboration with a staple organization of this city is an honor."

Houston-based Hamper, which makes dry cleaning convenient, won the Rockets and BBVA Compass' LaunchPad competition. Courtesy of Hamper

Last year, Launchpad's winner was Hamper. Hamper's co-founder and CEO Safir Ali started his company to use technology to optimize the dry cleaning business and compares Hamper to the "Red Box of dry cleaning." The win was big for Hamper's future.

"It was an absolute pleasure to be recognized by BBVA and the Houston Rockets as the winner of the 2019 Launchpad Contest," says Ali in the release. "It was a very exciting moment for Hamper, and we are very grateful to have the opportunity to be recognized in our community. Many thanks to both BBVA and the Houston Rockets for empowering Houston businesses and giving them such a great platform to be recognized for their efforts, and for playing an active role in empowering entrepreneurship in Houston."

From rethinking dry cleaning or marketing to flipping the script on pop culture events, here's who to know this week in Houston innovation. Courtesy Photos

3 Houston innovators to know this week

Who's Who

This week's batch of Houston innovators to know are all rethinking the way things are being done, from dry cleaning and marketing to pop culture events. Scroll through to see who's who in Houston innovation this week.

Safir Ali, founder and CEO of Hamper

Safir Ali leads Houston-based Hamper, which won the Rockets and BBVA Compass' LaunchPad competition. Courtesy of Hamper

It's a good week for Safir Ali, who's company just won a startup competition put on by the Houston Rockets and BBVA Compass. Hamper, his company, makes dry cleaning more convenient for customers with pick up and delivery. His parents run a dry cleaning shop and he always thought it was a bit antiquated.

"I had this 'aha' moment in 2016," Safir says. "I had graduated from Texas A&M in 2014 and was working a corporate job and the last thing on my mind was joining the family business. But I started to see all the pain points for people in dry cleaning." Learn more about Hamper here.

Allie Danziger, founder and president of Integrate Agency

When it comes to setting up a marketing budget for your startup, considering every angle is important, says Allie Danziger of Integrate Agency. Getty Images

Allie Danziger has been focused on digital marketing since before it was cool. The entrepreneur created her Houston agency 10 years ago and has been growing ever since. She wrote a guest column for InnovationMap last week about how startups and small businesses should decide on how much to spend on marketing.

"Industry research suggests spending 5 percent to 12 percent of total revenue on an annual marketing budget," she writes. "At Integrate Agency, we believe marketing spend should be determined from key data points, versus current size." Click here to read the rest of the article.

Michael Heckman, Comicpalooza president and senior vice president at Houston First

Michael Heckman shares about some exciting new aspects of Houston's 11th annual Comicpalooza. Courtesy of Houston First

It's safe to say that Michael Heckman has had a busy weekend. The 11th annual Comicpalooza took over downtown Houston this past weekend, but just because one event is over, doesn't mean Heckman or his team at Houston First Corp. is slowing down.

"Our convention sales team looks to break another record this year," Heckman tells InnovationMap. "We have a lot of major events upcoming — from the college football playoff to the men's basketball Final Four, and we'll eventually pursue another Super Bowl."

Heckman says he has some big ideas for even an innovation-focused conference. Read the rest of the Q&A with Heckman here.

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SpaceX IPO set to be biggest ever and could make Elon Musk a trillionaire

IPO News

SpaceX says it plans to raise up to $75 billion when it goes public this month, setting the stage for the largest-ever stock market debut and putting Elon Musk on course to becoming the world's first trillionaire.

The company, formally known as Space Exploration Technologies Corp., said Wednesday it will sell 555.6 million shares at $135 a piece in an initial public offering. The estimated proceeds would easily top the $26 billion raised by oil giant Saudi Aramco in 2019. The offering would also give SpaceX a market value of $1.77 trillion. Only six companies in the S&P 500 are currently worth more, with Nvidia tops at $5.2 trillion.

Besides the size of the offering and the expected proceeds, SpaceX's amended prospectus updates details about how much control of the company Musk will have. As SpaceX's CEO, chief technical officer and chairman, Musk's voting power will come primarily through his ownership of 5.22 billion Class B shares, which give the holder 10 votes for every share held. According to the filing, Musk would have 82.4% of the voting power in the company.

Forbes currently values Musk's net worth at $826 billion and his stake in SpaceX at $542 billion. The estimated value of his SpaceX holdings was based on an overall value for the company of $1.25 trillion. Based on those numbers, a $1.77 trillion valuation for SpaceX would boost Musk's net worth by $223 billion, making him a trillionaire. However, much of Musk's worth is in stock that he has yet to cash in.

Even as it makes a bid for a blockbuster market debut, SpaceX is currently losing billions of dollars a year. The filing shows that the company lost $2.6 billion from operations last year on $18.7 billion in revenue, and the losses kept piling up at the start of this year, too.

Fantastical plans

Time will tell how SpaceX fares on the market. Musk's plans for the company are as fantastical as the money he hopes raise in the sale.

Colorful, even frightening in parts, the IPO document strikes a contrast with the typically dry, technical prose in IPO documents, detailing plans to use proceeds from the sale to help put men on the moon again and perhaps even Mars. In one section, it talks of a need to build "a permanent human colony" on the red planet with "at least one million inhabitants" as existential threats loom that could consign man to "the same fate as the dinosaurs."

Musk has almost equally ambitious plans for his other publicly traded company, Tesla. His goal is to transform the maker of electric vehicles into a producer of robotaxis and humanoid robots. Dan Ives of Wedbush Securities wrote in a research note that he expects Tesla and SpaceX to merge next year.

AI plays a key role

Key to the success of both companies — and any merged entity — is artificial intelligence. In its IPO filing, SpaceX says it sees potential revenue from AI of up to $26.5 trillion. But that depends on another lofty Musk ambition — putting data centers in space, which is not technologically possible at the moment.

Transforming his space company into a primarily AI-focused company will be a challenge for Musk, who started xAI in 2023 with 11 other co-founders who have all since left. Some were recruited away by rivals.

Its main AI product, the chatbot Grok, is "less impressive than anything that we see from any other major player in the space, whether that's OpenAI, or Anthropic, or (Google's) Gemini," said IDC analyst Arnal Dayaratna.

Dayaratna said that doesn't mean SpaceX doesn't have potential as a major AI player, thanks in part to its computing partnership with Anthropic and Musk's recent deal that gave SpaceX the rights to buy AI coding tool Cursor for $60 billion later this year. Folding in Cursor's capabilities would give SpaceX access to the coveted business customers now using Anthropic's Claude or OpenAI's ChatGPT.

SpaceX plans to use the net proceeds from the IPO to fund the expansion of infrastructure for its AI and rocket businesses, and to beef up the constellation of satellites that power Starlink Mobile, among other investments.

The company plans to list on the Nasdaq under the symbol "SPCX" and could begin trading as soon as the end of next week.

And SpaceX isn't the only colossal market debut investors are now bracing for. Earlier this week, Anthropic submitted a confidential filing with the U.S. Securities and Exchange Commission to officially start its own IPO clock.

OpenAI has not yet reported filing the initial SEC paperwork, but an IPO from the ChatGPT maker is widely expected.

"This listing represents the first major test for public markets after years of muted IPO activity with SpaceX paving the way for AI giants Anthropic and OpenAI to follow soon after," Ives wrote.

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Associated Press Technology Writer Matt O'Brien contributed.

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.

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