Houston named among the most affordable cities for startups

Start up at a low cost

Houston has affordablility going for its startups. Photo by Zview/Getty Images

Houston has been long known for its great quality of life and low cost of living, and a new study found that when it comes to startup companies specifically, the greater Houston area has a lot to offer.

Clever, a real estate tool and blog, identified Houston as the sixth best metro in the United States for affordability for startups. The study looked into startup density, investment, the education level of the local population, and the cost of living, and more within the top 50 most populated cities in the U.S.

The resulting ranking had all four of Texas' major metros in the top 10. Austin ranked No. 1 overall, Dallas-Fort Worth ranked at No. 3 (after Atlanta), and San Antonio-New Braunfels came in at No. 8. The study ranked each city based on its density of startups, its growth, investment in business, and its cost of living.

At No. 6 for growth, Houston ranked the highest out of its Texas counterparts, but San Antonio and Houston share the ranking of No. 6 for investment.

"Considering Houston's metro is tied with San Antonio's for the highest average investment in small business, and the proximity to great food, the Gulf of Mexico coast, and attractions like Minute Maid Park and the NASA Space Center, we would definitely suggest considering starting a business here," reads the report.

The Houston area touts a startup density of over 25 percent, which earns it 12th place in that particular category. The report finds that Houston has 6.89 million residents across 8,265.8 square miles and 6.54 percent of Houstonians work at a startup, while 2.8 percent are self employed.

When it comes to GDP and education, Houston has a lot of bragging rights. The Houston area's GDP is reported to be $490 billion, which is the 7th highest in the country, according to the Bureau of Economic Analysis.Meanwhile, almost a quarter of the region's population has a bachelor's degree or higher.

Last month, InnovationMap reported that Inc. 5000 named Houston among its hottest startup cities, citing the three-year revenue growth of Houston's companies that made it on to the Inc. 5000 list. Just before that ranking, 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.

TMCx is looking for members for its ninth cohort. Courtesy of TMCx

Houston software company raises $16.3 million, TMCx opens applications, and more innovation news

Short stories

From rounds closing to accelerator applications opening, there's a lot of Houston innovation news that might not have reached your radar. Here's a roundup of short stories within tech and innovation in the Bayou City.

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Houston software company closes a $16.3 million Series A

Innovapptive raised its round lead by a New York-based firm. Getty Images

Innovapptive, a software-as-a-service company with clients in industrial industries, announced it closed on a $16.3 million Series A investment led by New york-based Tiger Global Management LLC. The company will use the funds for continued global growth. As of the raise's completion, company's valuation is now more than $65 million.

"We are connecting the enterprise by providing a platform that improves real-time data collaboration and communications between the field and back office. The communications and collaboration data are captured and converted into executive insights for continuous workforce optimization," says Sundeep Ravande, CEO and co-founder of Innovapptive, in a press release. "This additional capital will allow us to accelerate our strategy and development to transform the digital experience of the industrial worker to help increase revenues and margins for our customers."

TMCx opens its medical device cohort applications

The deadline to apply for the next TMCx cohort is May 24. Courtesy of TMC

The Texas Medical Center has announced that TMCx's 2019 medical device cohort applications are now open. The deadline to apply is May 24, and selected companies will be notified by June 21. The program will run from August 5 to November 8th. For more information, click here.

Nesh closes Seed round of funding

Aristos Ventures lead the round for the Houston energy startup. Courtesy of Nesh

The Siri of oil and gas, Hello Nesh Inc, has raised its first round of funding thanks to seed funding from Aristos Ventures and a LOOP contract with Equinor Technology Ventures. The funding will be used for new hires and expansion plans.

"Securing LOOP funding from ETV and seed funding from Aristos provides us with a unique mix of strategic knowledge and domain expertise, coupled with investment experience in digital technologies, artificial intelligence, and SaaS," says co-founder and CEO of Nesh, Sidd Gupta in a release. "This will enable us to further build Nesh's petrotechnical and natural language understanding and scale our business in the North America market."

ETV has chosen not to disclose the dollar amount of the round, however last fall Gupta at the Texas Digital Summit, Gupta announced that the company was seeking to close a $800,000 seed round. Read more about the company here.

Shell Oil Co. gives $2.5M to fund research, inform public policy at Rice University’s Baker Institute

Shell and Rice University have entered a partnership. Courtesy of Rice University

Following a $2.5 million commitment from Shell Oil Co., the Center for Energy Studies at Rice University's Baker Institute for Public Policy has announced five-year research program to study the global energy system — including the policies, regulations, geopolitical forces, market developments and technologies.

"We are grateful for Shell's commitment to advancing the study of critical energy issues affecting our region, the nation and the world," says Baker Institute Director Edward Djerejian in a release. "This partnership with Shell furthers our mission to provide unbiased, data-driven analysis of factors that will shape our energy future with the aim of engaging policymakers, corporate leaders and the general public with the results."

Texas improves its ranking as an innovative state

The Lone Star State is moving on up as an innovative state. Getty Images

Texas is slowly but surely moving on up as an innovative state. According to Bloomberg's newest U.S. State Innovation Index, Texas is the 17th best state for innovation. The study factors in six metrics: research and development intensity, productivity, clusters of companies in technology, "STEM" jobs, populous with degrees in science and engineering disciplines, and patent activity. Last year, the study found Texas at the No. 19 spot.

Texas' score was 60.1 — which is just over a point's difference from being in the top 15. It's also worth noting that the Lone Star State is the highest ranked in the south.

"What is most important is the construction and catalyzation of super vibrant advanced industry sectors and clusters in a state," says Mark Muro, a senior fellow at Brookings, a think tank in Washington DC, to Bloomberg. "Commercialization has not been a top priority of universities in the heartland, especially in the South."

Houston companies take home Napier Rice Launch Challenge prizes

Abbey Donnell's startup, Work & Mother, won the award for the Best Alumni team at the H. Albert Napier Rice Launch Challenge at Rice University. Courtesy of Work & Mother

On April 4, 10 teams competed in the H. Albert Napier Rice Launch Challenge at Rice University. Here are the Rice University alumni- and student-led companies that won awards.

LilySpec took home $2,500 as the Audience Favorite award winner.
CardStock Exchange won $12,500 in the Best Undergraduate category.
WellWorth walked away with $12,500 as the Best Graduate team winner.
Abbey Donnell, founder of Work & Mother, took home first place the Best Alumni category — along with $12,500.
UrinControl was the Grand Prize winner and scored $20,000.

BBL reverse pitch contest extends deadline

The deadline for a new pitch competition with ExxonMobil and BBL Ventures has been extended. Getty Images

BBL Ventures, which announced its reverse pitch competition with ExxonMobil earlier this year, has extended the challenge deadline to May 13.

"BBL Ventures is excited to be working with a forward-thinking partner like ExxonMobil, engaging the external innovation ecosystem is a key step in advancing the energy industry's continued success," says Patrick Lewis, managing partner of BBL Ventures, in a release. Full details for the competition are available here.

Startup Grind Houston is calling all female founders

Calling all female founders. Getty Images

Houston's Startup Grind chapter announced a female founder pitch event on May 2 at the TMC Innovation Institute. The organization is calling for teams to pitch at the event. The deadline to apply is April 23 at 5 pm.

Click here to nominate yourself or someone else for the pitch.

Sysco invites UH tech students to first-ever UHacks Hackathon competition

Sysco and AWS are teaming up for a hackathon. Getty Images

Houston-based Sysco Corp. — along with Amazon Web Services — is hosting its first-ever, university student-led hackathon event. The one-day competition takes place on Friday, April 19, from 8 am to 5 pm at the new Houston office of AWS ( 825 Town & Country Lane, 10th floor).

The student teams with focus on four hypothetical themes in Sysco's business landscape, including a spend management platform enhancing the customer shopping experience, identifying locally grown foods, proof of purchase technology, and a "best before" portal to streamline expiration data.

Is Texas still full of wildcatters — but for tech and innovation? Some say yes, but with one caveat. Photo by Scott Halleran/Getty Images

Houston's innovation ecosystem channels the wildcatter's spirit — but with one major difference

Tech boom

Historically, Texas has been a land of opportunity, and that might ring true now more than ever since the state's oil boom. As Houston's innovation ecosystem grows and develops, are these entrepreneurs reminiscent of the wildcatter days of the early 1900s? Well, sort of.

"Wildcatting is supposed to be really wild. You're supposed to go out in the field and drill some holes and hope that you find something," says Marc Nathan, vice president of strategy at Egan Nelson in Austin. "Truth is, we're a lot more deliberate than that these days."

Wildcatting and deliberate innovation development were the topics of discussion at a panel in Austin during SXSW. The panel, which was hosted by Rice Business and Texas Monthly, was comprised of three panelists with Houston ties: Gabriella Rowe, CEO of Station Houston, Lawson Gow, CEO and founder of Houston-based The Cannon, and Nathan, who, though based in Austin now, was born and raised in Houston and has done business in town too.

Wildcatting new industries
All three panelists agreed that the entrepreneurial nature of the wildcatters is alive and well within Texas entrepreneurs, just now spread apart multiple industries. Among all of the major Texas cities — or DASH, as Nathan calls it, Dallas, Austin, San Antonio, and Houston — each has its specialty. Austin tends to specialize in consumer-facing technology, Dallas has a hold on B-to-B and transportation, and San Antonio has the military.

For Houston, which is most known for its energy, life sciences, and space technology, has some new territories it's growing in, says Rowe, from cybersecurity to sports technology. And all of these different industries seem to work together, which is encouraging to see for Rowe.

"That's the secret sauce that Houston has in many ways," Rowe says.

This ability to specialize is also what's also special about Houston. Rather than trying to compete with Austin and its consumer technology — Gow gave an example of a startup focusing on a doggy dating app — Houston is doing its own thing.

"What I love about Houston is we're trying to solve big problems," Gow, who is the son of InnovationMap's parent company's CEO, says. "We're not going to be the consumer software capital of the world and, for the most part, we're not going to mess around with doggy dating apps."

Houston's problems to overcome
One of the challenges Houston faces as an innovation ecosystem is access to funds. According to Nathan, putting money into tech is just not Houston investors are used to doing.

"Houstonians invest in the ground, with oil and gas, and on the ground, with real estate, but not in the cloud," Nathan says.

The reason being, Gow says, is investors tend to put money into industries they know, and there's a need for educating these investors in new industries.

"To compare to Austin, more people in Austin have tech startups that have been successful and they turn around and invest in what they know, which is tech startups," Gow says. "There's a generational effect."

Another challenge Houston faces is competition — but not with other Texas cities or the rest of the country. Competition between startups and accelerators for resources has the potential to hinder the city's growth as an ecosystem.

"We are fighting for very scarce resources — and it's not just money," Nathan says. "It's also talent."

Texas Monthly's chief innovation officer, Tim Taliaferro, moderated the panel. Natalie Harms/InnovationMap

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Houston researchers develop material to boost AI speed and cut energy use

ai research

A team of researchers at the University of Houston has developed an innovative thin-film material that they believe will make AI devices faster and more energy efficient.

AI data centers consume massive amounts of electricity and use large cooling systems to operate, adding a strain on overall energy consumption.

“AI has made our energy needs explode,” Alamgir Karim, Dow Chair and Welch Foundation Professor at the William A. Brookshire Department of Chemical and Biomolecular Engineering at UH, explained in a news release. “Many AI data centers employ vast cooling systems that consume large amounts of electricity to keep the thousands of servers with integrated circuit chips running optimally at low temperatures to maintain high data processing speed, have shorter response time and extend chip lifetime.”

In a report recently published in ACS Nano, Karim and a team of researchers introduced a specialized two-dimensional thin film dielectric, or electric insulator. The film, which does not store electricity, could be used to replace traditional, heat-generating components in integrated circuit chips, which are essential hardware powering AI.

The thinner film material aims to reduce the significant energy cost and heat produced by the high-performance computing necessary for AI.

Karim and his former doctoral student, Maninderjeet Singh, used Nobel prize-winning organic framework materials to develop the film. Singh, now a postdoctoral researcher at Columbia University, developed the materials during his doctoral training at UH, along with Devin Shaffer, a UH professor of civil engineering, and doctoral student Erin Schroeder.

Their study shows that dielectrics with high permittivity (high-k) store more electrical energy and dissipate more energy as heat than those with low-k materials. Karim focused on low-k materials made from light elements, like carbon, that would allow chips to run cooler and faster.

The team then created new materials with carbon and other light elements, forming covalently bonded sheetlike films with highly porous crystalline structures using a process known as synthetic interfacial polymerization. Then they studied their electronic properties and applications in devices.

According to the report, the film was suitable for high-voltage, high-power devices while maintaining thermal stability at elevated operating temperatures.

“These next-generation materials are expected to boost the performance of AI and conventional electronics devices significantly,” Singh added in the release.

Houston to become 'global leader in brain health' and more innovation news

Texas falls to bottom of national list for AI-related job openings

jobs report

For all the hoopla over AI in the American workforce, Texas’ share of AI-related job openings falls short of every state except Pennsylvania and Florida.

A study by Unit4, a provider of cloud-based enterprise resource planning (ERP) software for businesses, puts Texas at No. 49 among the states with the highest share of AI-focused jobs. Just 9.39 percent of Texas job postings examined by Unit4 mentioned AI.

Behind Texas are No. 49 Pennsylvania (9.24 percent of jobs related to AI) and No. 50 Florida (9.04 percent). One spot ahead of Texas, at No. 47, is California (9.56 percent).

Unit4 notes that Texas’ and Florida’s low rankings show “AI hiring concentration isn’t necessarily tied to population size or GDP.”

“For years, California, Texas, and New York dominated tech hiring, but that’s changing fast. High living costs, remote work culture, and the democratization of AI tools mean smaller states can now compete,” Unit4 spokesperson Mark Baars said in a release.

The No. 1 state is Wyoming, where 20.38 percent of job openings were related to AI. The Cowboy State was followed by Vermont at No. 2 (20.34 percent) and Rhode Island at No. 3 (19.74 percent).

“A company in Wyoming can hire an AI engineer from anywhere, and startups in Vermont can build powerful AI systems without being based in Silicon Valley,” Baars added.

The study analyzed LinkedIn job postings across all 50 states to determine which ones were leading in AI employment. Unit4 came up with percentages by dividing the total number of job postings in a state by the total number of AI-related job postings.

Experts suggest that while states like Texas, California and Florida “have a vast number of total job postings, the sheer volume of non-AI jobs dilutes their AI concentration ratio,” according to Unit4. “Moreover, many major tech firms headquartered in California are outsourcing AI roles to smaller, more affordable markets, creating a redistribution of AI employment opportunities.”

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