Houston ranks among the top cities ready for the rise of artificial intelligence

Ready for it

Houston's ready for the artificial intelligence revolution. Yuichiro Chino/Getty Images

How ready is Houston for the rise of artificial intelligence? More ready than you might think.

In the recently released Global Cities' AI Readiness Index, Houston ranks ninth in the world among large cities (those with 5 million to million residents). Singapore topped the large-city list; Dallas appeared at No. 8.

"The age of technology is here, and we cannot afford to sit idle," Houston Mayor Sylvester Turner says in a recent release. "We must leap, not stroll, into the future."

The Oliver Wyman Forum, part of management consulting firm Oliver Wyman, based its AI ranking on surveys of residents and leaders in 105 global cities, along with a review of publicly available socioeconomic data. The group says its goal in compiling the ranking was to "start a data-informed conversation about how to address the very real opportunities and challenges of AI disruption."

"Houston has been working diligently over the past several years to grow a robust digital tech ecosystem," says Susan Davenport, senior vice president of economic development at the Greater Houston Partnership. "Previously, most surveys ranked Houston in the 30s in this area. When we see ourselves ranked ninth among large global cities and U.S. metros in AI readiness, it's a positive signal of our trajectory."

Signs of Houston's trajectory in the AI universe abound:

"When you think about Houston's core industries like energy, life sciences, and manufacturing, these are all data-intensive businesses that are ripe for disruption by AI and other digital technologies," Davenport says. "There is significant activity with AI already happening in the market, but I think we're still early on the growth curve, with a great deal of upside potential."

A recent search of job website LinkedIn found more than 200 AI-focused jobs available in the Houston area at employers like Shell, Accenture, Deloitte, Capgemini, HP, and EY.

Over the past year, the Greater Houston Partnership has led several trips to Silicon Valley to meet with companies involved in AI, cloud computing, and other technologies that enable businesses to harness the power of data.

"We are finding these innovative companies are very interested in tapping into the customer base here in Houston," Davenport says, "and we expect to see growth in this sector to continue over the next few years."
Bill.com's new Houston office is in West Houston and has space for 125 employees. Natalie Harms/InnovationMap

Silicon Valley fintech company officially opens its second headquarters in Houston

New to town

Only 18 months ago, a growing Palo Alto, Calif.-based fintech company was weighing its options for its first out-of-state expansion. And yesterday, Bill.com opened its second headquarters in Houston.

"When we set out to find a second headquarters in Houston, we had three criteria we were looking for," says René Lacerte, CEO of Bill.com.

Those three things were a good education foundation, vibrant business economy, and diversity, which "Houston has that in spades," Lacerte adds.

Lacerte, who is based in Palo Alto, celebrated the opening of the office on September 18 at a reception that included Mayor Sylvester Turner, Susan Davenport, president of the Greater Houston Partnership, and others who were involved in the process of bring Bill.com to Houston. Mayor Turner even celebrated the office opening by proclaiming September 18th as Bill.com Day in Houston.

"We've worked very hard the past few years to strengthen Houston's digital tech innovation ecosystem," says Davenport. "Today, I think solidifies the momentum we've been building."

The new office is located on the west side of town at the CityWest office development. Bill.com has 25,000 square feet and can have up to 125 employees. Lacerte says he wants to have every department represented in the Houston office, from sales to programming.

"There are two reasons I founded the company," Lacerte says to the crowd. "One was to make a difference in the lives of our customers, and the other was to make a difference in the lives of our employees. Having this second office is a huge opportunity in the lives of people in our communities."

Lacerte founded Bill.com in 2006, and the company has raised over $259 million in funding. The software-as-a-service company has over 3 million members, according to Bill.com, and processes $60 billion in payments annually.
As a a part of its annual Inc. 5000 findings, the magazine named Houston the ninth hottest startup city in America. Photo by Tim Leviston/Getty Images

National business magazine names Houston one of the 'hottest startup cities'

hot or not

It's not just Texas' weather that's hot. Three Lone Star State cities made Inc. magazine's list of hot startups cities — and Houston came in at No. 9.

The list came out of the Inc. 5000 report — the magazine's list of the fastest-growing 5,000 privately-held companies in the United States. The list was ranked by the three-year revenue growth of each of the cities' companies.

Houston had a three-year revenue growth 117 percent with 84 Houston companies on the 2019 Inc. 5000 list.

"After Hurricane Harvey hit in 2017, the Houston area's construction industry grew tremendously to help rebuild and repair the storm's damage," the short ranking blurb reads, mentioning two Inc. 5000 companies in Houston: oil pipeline services company JP Services (No. 792) and contractor services firm CC&D (No. 1,973).

Houston beat out Dallas (No. 10) by just 4 percent three-year revenue growth and 10 Inc. 5000 companies. The article calls out Dallas for its "low regulations, zero corporate income taxes, and the Dallas Entrepreneur Center, or DEC, which is a nonprofit organization serving as a hub for startup networking, funding, and mentorship."

Meanwhile, Austin, which ranked No. 2 on the list, had a three-year revenue growth 259 percent, and has 87 Inc. 5000 companies this year. Austin was praised for its "high rate of entrepreneurship and job creation" in the article, as well as for having outposts for top tech companies like Amazon, Apple, and Google.

Here's the full list:

  1. San Francisco
  2. Austin
  3. New York City
  4. San Diego
  5. Atlanta
  6. Denver
  7. Los Angeles
  8. Chicago
  9. Houston
  10. Dallas

Earlier this month, Business Facilities magazine named Houston the fourth best startup ecosystem in the U.S., as well as the fourth best city for economic growth potential. Similarly, Commercial Cafe recently named Houston a top large city for early stage startups.

Susan Davenport, senior vice president of economic development for the Greater Houston Partnership, previously told InnovationMap that it's the city's diversity that keeps the city growing and resilient.

"The region's steady population increases, coupled with our relatively low costs of living and doing business, bode well for our economic growth potential reflected in this ranking," Davenport says.
Houston's moving on up in the worlds of economics and startup activity. Photo by Tim Leviston/Getty Images

Houston ranks high on lists for startup ecosystems and economic growth potential

We're No. 4!

The number four appears to be a sign of good fortune for Houston.

A new ranking from Business Facilities magazine places Bayou City at No. 4 for economic growth potential among large metro areas and at No. 4 for the country's best startup ecosystems.

Regarding the No. 4 ranking for economic potential, Susan Davenport, senior vice president of economic development for the Greater Houston Partnership, says Houston's industrial diversity has helped the region weather downturns in certain economic sectors "and now has us on a solid growth trajectory."

"The region's steady population increases, coupled with our relatively low costs of living and doing business, bode well for our economic growth potential reflected in this ranking," Davenport says.

Houston's status as the one of the top locations for Fortune 1000 headquarters in the U.S. elevates the region's position as a hub where both large and small companies can prosper, she adds.

Houston appeared at No. 1 in Business Facilities' 2018 ranking of the top large metros for economic growth potential. Representatives of Business Facilities couldn't be reached to explain why Houston dropped three places from 2018 to 2019.

Last year, the magazine pointed out that Houston's economy extends far beyond its standing as the Energy Capital of the World.

"The nation's fourth-largest city has a dynamic, diversified economy that is brimming with innovation, technology, and entrepreneurship," said the magazine, citing advantages such as Houston's strong manufacturing base, enormous healthcare presence, and storied aerospace legacy.

The magazine went on to hail Houston's "distinctly favorable business climate."

"The region benefits from a skilled workforce, world-class infrastructure and transportation system, and a pro-business environment that stimulates rather than stifles business growth," Business Facilities noted.

As for the No. 4 ranking in this year's Business Facilities startup category, Davenport says this indicates the recent work of the Houston Exponential initiative to foster the local startup environment is paying off.

Houston Exponential, established in 2017, seeks to make Houston a top 10 innovation ecosystem, generate $2 billion in venture capital annually, and create 10,000 new tech jobs a year by 2022.

Last October, Houston Exponential announced it had collected $25 million for its first venture capital fund. Making financial commitments to the fund were Insperity, Chevron, Shell, Quanta Services, Westlake Chemical, The Plank Cos., PROS, H-E-B, and Camden Property Trust.

"Factor in the demand being satisfied by a number of new incubators and accelerators, plus the four-mile Innovation Corridor running through the heart of the city and anchored by The Ion, and we're seeing momentum on a scale like never before," Davenport says.

In Houston's Midtown, Rice University is transforming the historic Sears building into The Ion, which will serve as an innovation hub designed to cultivate collaboration among startups, corporations, universities, and other elements of the local business community. It's the first development in Houston's evolving innovation district.

"The Midtown innovation district is an embodiment of our shared community vision to give professionals and families a means of seizing opportunity as Houston continues to grow as a leading city in technology," says Matt Thibodeaux, executive director of Midtown Houston.

Here is Business Facilities' 2019 list of the top 10 places for economic growth potential among large U.S. metros:

  1. Atlanta
  2. San Antonio
  3. Phoenix
  4. Houston
  5. Orlando, Florida
  6. Austin
  7. Raleigh-Durham, North Carolina
  8. Las Vegas
  9. Albuquerque, New Mexico
  10. Kansas City, Missouri

Here is Business Facilities' 2019 list of the 10 places with the best startup ecosystems in the country:

  1. Austin
  2. Denver
  3. New York City
  4. Houston
  5. San Jose, California
  6. Orlando, Florida
  7. Nashville, Tennessee
  8. Atlanta
  9. Raleigh-Durham, North Carolina
  10. Salt Lake City
Houston came in at No. 5 for best cities — with populations of more than 1 million residents — for startups. Photo by Tim Leviston/Getty Images

Houston named among the best large cities for early-stage startups

Start up here

When it comes to cities with over a million residents, Houston's at the front of the pack, according to a new study. But, there's a catch.

Last month, Commercial Cafe rounded up the 20 top cities for early-stage startups and entrepreneurs, and Houston missed the list. Now, the commercial real estate blog has broken down the data into three top ten lists based on city size, and Houston has claimed the No. 5 spot on the list of cities with 1 million or more residents.

The study took into account education, affordability, startup financial success (calculated from Kickstarter data), millennial population growth, among other aspects. Houston in particular was called out for being the most affordable major metro and for having the third best startup survival rate.

"The city is home to the fourth-largest percentage of millennial residents out of the total population, and saw the fourth-largest growth in number of millennial residents," the report reads. "Houston ranked fifth in group for the share of population holding a bachelor's degree or higher in a tech discipline. The rate at which the number of such residents has increased placed Houston seventh for tech education growth."

Outpacing Houston on the larger cities were Dallas at No. 1, San Diego, California, at No. 2, San Jose, California, at No. 3, and Los Angeles at No. 4. San Antonio also made the list, coming in at No. 7.

Texas cities were sprinkled throughout the two smaller cities list. Austin came in at No. 1 for the cities with 500,000 to 1 million residents, as well as claimed the top spot in the best cities regardless of population. Fort Worth ranked as No. 10 on this mid-sized city list.

On the small cities list for metros with less than 500,000 residents, Arlington came in at No. 6 for its location and startup density. The city also made the top 20 regardless of size, sliding into the No. 19 spot. Dallas, which topped the large cities list, came in at No. 15 on the size agnostic list for top startup cities.

Recently, Texas was named a top city to start a company by personal finance website, WalletHub, based on similar statistics.

"[I]t's clear why Texas would come in at No. 1," Susan Davenport, senior vice president of economic development for the Greater Houston Partnership, says responding to that study. "These are all areas where the Lone Star State consistently excels and why Texas continues to attract both entrepreneurs and existing companies across industry sectors."
Houston has seen an almost 150 percent increase of tech startups over the past decade. Nick Bee/Pexels

Houston named one of the fastest growing metros for tech startups

Startup city

Houston has seen an influx of new startups entering the market — and that growth hasn't gone unnoticed.

A new study from New York-based Center for an Urban Future analyzed Crunchbase data to find 17 cities have have had the most percentage of growth in startup activity. While Houston ranked last on the list, the city's numbers speak for themselves.

In 2008, Crunchbase's data reflects that Houston only had 567 startups, and, by 2018, that figure had increased to 1,409, representing a 149 percent growth. It's worth noting that Crunchbase's data tracks tech startups in particular through various avenues of public and private reporting.

The study included a few other Texas cities that outranked Houston, including Dallas (223 percent growth), Austin (with 221 percent growth), and San Antonio (with 155 percent growth). While the percentage is larger, Dallas' number of startups —according to Crunchbase — is slightly lower than Houston's at 1,293.

Chart via the Center for an Urban Future

While indicative of Houston's growth, the study unintentionally omits non-tech startups or companies that haven't been entered into the Crunchbase system. The study also seems to recognize only Houston data, rather than the greater Houston area as a whole.

Meanwhile, the Greater Houston Partnership's data reflects that the greater Houston area added 11,700 firms between 2013 to 2018 — an average addition of 2,340 per year.

Last month, WalletHub found that Houston was the 13th best city to start a business. The study analyzed 19 key metrics — such as five-year business-survival rate and office-space affordability — to compare 100 cities in the U.S.

More recently, Houston grabbed the fifth spot on a new 2019-20 list of the 10 North American Cities of the Future produced by the fDi Intelligence division of the Financial Times. The ranking is based on data in five categories: Economic potential, business friendliness, human capital and lifestyle, cost effectiveness, and connectivity.

To Susan Davenport, senior vice president of economic development at the Greater Houston Partnership, the results of the study make a lot of sense. Houston's diversity and friendly business climate are prime.

"Houston's future is a bright one," Davenport says in a previous InnovationMap article. "Our young and well-educated workforce, coupled with targeted infrastructure investments, will help us become a hub for innovation in the years ahead."
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5 Houston entrepreneurs to know this Veterans Day

American heroes

Over a quarter of a million United States military veterans call Houston home, and that number is growing.

"Houston has the second largest and fastest growing veteran population in the country," says Reda Hicks, a Houston entrepreneur and military spouse herself. "That's a very significant chunk of our city to share an affinity, and it's not something Houston has talked about."

For its large veteran population, Houston was selected in January 2018 as the third location to set up a chapter of Bunker Labs, an acceleration and incubation organization for military-affiliated entrepreneurs.

"Our whole goal is to help empower military-affiliated people to start and grow businesses," says Hicks, who is one of the Houston leads for the program, a lawyer, and the founder of GotSpot Inc.

The program provides resources for veterans, military spouses, or anyone whose lives were affected by a family member in the military. Bunker Labs provides a digital platform for early-stage ideas called Launch Lab that's used by hundreds annually, and also has face-to-face programming through its Veterans in Business program hosted through WeWork.

"It can be the case that veterans can feel siloed, and it's wonderful to have those people around you who can really understand you, but for businesses to grow, they have to really understand the ecosystem they live in," Hicks says.

In honor of Veterans Day, here are a few Houston veteran entrepreneurs to know.

Dyan Gibbens, founder and CEO of Trumbull Unmanned

Dyan Gibbons

Dyan Gibbons translated her Air Force experience with unmanned missiles into a drone services company. Courtesy of Alice

Dyan Gibbons found her dream career in the United States Air Force Academy. She served as engineering acquisitions officer managing stealth nuclear cruise missiles, and even went on to supported Air Force One and Global Hawk UAS engineering and logistics. After her years of service, she transitioned into the reserves, when she discovered she was ineligible to serve again. She went back to the drawing board to recreate herself — this time, as an entrepreneur.

She went into a doctorate program — she already had her MBA — and was close to finishing up when her drone startup took flight. Trumbull Unmanned provides drone services to the energy sector for various purposes. With her experience as a pilot and managing unmanned missiles, she knew the demand for drones was only growing — and, being from Texas, she knew what industry to focus on.

"I wanted to start a company that uses unmanned systems or drones to improve safety and improve the environment and support energy," Gibbons tells InnovationMap in a previous interview.

Nicole Baldwin, chief visionary officer and founder of Biao Skincare

Nicole Baldwin

Photo via toryburchfoundation.org

Before founding her tech-enabled, all-natural skincare line, Biao, Nicole Baldwin served in the Army Civil Affairs Units and was deployed to Bagram, Afghanistan. In honor of Veterans Day, she shared on Facebook an image of her with young girls outside the compound she lived in.

"I often tell people not to thank me for my service, because I don't feel like I should be thanked for doing something I genuinely wanted to do," she writes in the post. "I am grateful every moment of my life knowing that I did all the things in and out of uniform that was felt from the heart."

Baldwin's company, which uses a skin-scanning technology has taken off, and she's participated in Houston's Bunker Labs programming, and she has also been a Tory Burch fellow and appeared on Shark Tank.

Brett Rosenberg, founder of Semper Fi Systems

Photo via LinkedIn.com

Brett Rosenberg spent a few years in the U.S. Air Force before he took his experience from national security to a different kind of security.

Rosenberg's startup is another one utilizing the resources of Houston's Bunker Labs. Semper Fi Systems takes information security experts' knowledge and machine learning solutions to optimize cybersecurity and avoid regulatory financial exclusion.

Nathan Wilkes, CEO of Guidon Holdings

Photo via LinkedIn.com

After four years in the U.S. Army based in Georgia, Nathan Wilkes enrolled in business school at Texas A&M University. It was during the program when he founded Guidon Holdings, a Cypress-based aggregates company that — through screening, washing, separating, clarifying, and much more — can turn a natural resource that is considered waste into something of value.

Wilkes is also a West Point Academy graduate and a member of the 2019 Bunker Labs Houston cohort.

Tim Kopra, partner at Blue Bear Capital

An U.S. Army vet, Tim Kopra spent over 244 days in space, and now he's using his tech background to invest in emerging energy companies. Courtesy of Tim Kopra

Before he spent a career total of 244 days in space, Tim Kopra first served his country in the United States Army. Nowadays, he serves the Houston innovation ecosystem as an investor and adviser to startups and entrepreneurs in the energy tech industry.

As a partner at venture fund Blue Bear Capital, Kopra uses his experience in the Army and in space to do figure out if entrepreneurs have what it takes to go the distance and if their technology is worth investing in.

"On face value, it may sound like an odd match, taking someone with a tech and operational background and putting them in venture, but quite frankly it feels very familiar to me because my career has really been focused on working on complex technology and operations with very small teams," tells InnovationMap in a previous interview. "It's not just a theoretical understanding of the technology, but understanding how to use the technology and how it works."

Here's how Houston hospitals stack up when it comes to safety, according to a national study

Best in class

Close to half of the Houston area's general acute-care hospitals are at the top of their class, according to new safety grades assigned to U.S. hospitals. But one hospital in the region is failing on the safety front, the grades show.

In its fall 2019 report card for acute-care hospitals, The Leapfrog Group gives letter grades of A, B, C, D, and F based on the hospitals' ability to shield patients from avoidable errors, injuries, accidents, and infections. The nonprofit represents hundreds of public and private employers that buy healthcare benefits.

In the Houston area, 19 hospitals earned an A, with 14 receiving a B, seven getting a C, one picking up a D and one being slapped with an F.

Chris Skisak, executive director of the Houston Business Coalition on Health, notes that 23 percent of hospitals in the Houston areas saw their Leapfrog grades go up while just 11 percent saw their grades go down. The coalition is a regional leader for The Leapfrog Group.

"Houston-area hospitals do care about their grades," Skisak says, "and going back to 2016, most obtained a higher grade after receiving a lower grade the previous assessment period. Houston is fortunate to have [about] 50 percent of its hospitals earn consistent A grades."

For the first time in at least four years, The Leapfrog Group did hit one Houston-area hospital — Huntsville Memorial Hospital — with an F. On the spring 2019 report card, the hospital received a D. In the fall of 2018, the mark was a C.

Huntsville Memorial Hospital currently is combating what's been described as a "dire financial situation."

In a November 1 statement, the Walker County Hospital District, which owns the Huntsville hospital, said the separate nonprofit entity that runs the hospital — Walker County Hospital Corp. — was beset by monetary woes and was on the verge of declaring Chapter 11 bankruptcy. As a result, the district warned, the hospital might close.

According to The Huntsville Item, a proposed rescue of the hospital would place ownership and management in the hands of a joint venture between the hospital district and Plano-based Community Hospital Corp., a hospital management company. The nonprofit Plano company provides supply-chain services to a Huntsville medical practice, Huntsville Orthopedic Surgery and Sports Medicine PLLC.

In the statement, the district's board says it "remains committed to maintaining a viable hospital for the community and to improving hospital operations and services."

The Leapfrog Group graded a total of 42 hospitals in the Houston area. The nonprofit released its fall 2019 report card on November 7.

Houston-area hospitals that earned an A were:

  • Houston Methodist Baytown Hospital
  • HCA Houston Healthcare Conroe
  • HCA Houston Healthcare West
  • Houston Methodist Hospital
  • Houston Methodist West Hospital
  • Houston Methodist Willowbrook Hospital
  • Memorial Hermann Southeast
  • Memorial Hermann Southwest Hospital
  • Memorial Hermann Northeast, Humble
  • Memorial Hermann Katy Hospital
  • HCA Houston Healthcare Kingwood
  • CHI St. Luke's Health Memorial Livingston
  • Houston Methodist Clear Lake Hospital in Nassau Bay
  • HCA Houston Healthcare Pearland
  • Houston Methodist Sugar Land Hospital
  • CHI St. Luke's Health The Woodlands Hospital
  • Houston Methodist The Woodlands Hospital
  • Memorial Hermann The Woodlands Hospital
  • HCA Houston Healthcare Clear Lake in Webster

Skisak says the Leapfrog report card "is a valuable resource for employers to share with their employees so that they can self-navigate to the safest and highest quality hospitals."

"The Leapfrog Hospital Safety Grade offers critical patient safety information to consumers, in an easily digestible way, so that they can make informed decisions about where they seek care in the Houston area," he says in a release.

The Leapfrog Group bases its twice-a-year grades for hospital safety on 28 sets of publicly available data from more than 2,600 U.S. hospitals.

3 Houston innovators to know this week

Who's who

From swimming away with $300,000 on Shark Tank to announcing new programming for Houston's innovation ecosystem, this week's Houston innovators to know have things to be excited about. Here's who to know this week in innovaiton.

Grace Rodriguez, CEO and executive director of Impact Hub Houston

Grace Rodriguez

Courtesy of Grace Rodriguez

It's a busy month for Grace Rodriguez. The leader of Houston's Impact Hub chapter, along with her team, is planning the third annual Houston Innovation Summit — a week long of programming for innovators, investors, entrepreneurs, and more scattered around the city.

Rodriguez took a break from the planning to discuss the events, her passion for driving equitable innovation resources, and more on the Houston Innovators Podcast.

"Houston is so diverse, and there are so many entrepreneurs that weren't getting access to the same resources," she says on this week's episode of the Houston Innovators Podcast. Click here to read more.

Patrick Coddou, CEO and co-founder of Supply

Patrick Coddou

Courtesy of Supply

Patrick Coddou, a native Houstonian and CEO of Supply, pitched their product to the panel of five investors on ABC's Shark Tank and hooked one of them, tech millionaire Robert Herjavec. In exchange for his $300,000 investment, Herjavec received a 15 percent stake in the four-year-old company.

"It was a surreal experience for us just making an appearance on the show, but we couldn't have been more pleased with the outcome," Patrick Coddou, CEO of Supply and a Houston native, says in a release. "I knew we had shaped a brand that sets itself apart, not only because of the innovative razor design but also the kind of standard we hold ourselves to, and I'm glad that resonated with Robert and the rest of the Sharks."

Herjavec battled against fellow Shark Kevin O'Leary to invest in Supply, but the Coddous wound up accepting Herjavec's offer. Click here to read more.

Emily Reiser, innovation strategist at the TMC Innovation Institute

As if working with her team to plan and execute the Texas Medical Center's accelerator's ninth cohort last week, Emily Reiser, innovation strategist at TMC, also had to plan for and execute the important announcement that TMCx has been redesigned for 2020. The program will be more heavily involving the TMC network of organizations for the program.

"Our focus going forward is on our member institutions — the clinics, the hospitals, and our partners who really bring forward these technologies into the future," says Reiser.

The 2020 cohort will be specifically focused on solving these member institutions' problems. Click here to read more.

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