Here's what makes a startup stand out, according to University of Houston research

Houston voices

From pitching to value proposition, here's what you should be thinking about to make your company stand out. Miguel Tovar/University of Houston

During your pitch, investors will be looking to see what your startup's value proposition is. What can you offer that your competitors cannot?

Imagine if you will, your startup develops a watch that can detect when you're about to have a heart attack, and automatically sends an alert with your location to 911.

You've perfected the design and engineering intricacies of the device. It's ready to go out and save lives, and make you tons of money in the process.

Now imagine you can't get this product off the ground because your pitches keep falling flat. Investors don't have confidence in you as an entrepreneur, even if your product is amazing. Remember, you can have an awesome product, but you won't reap any rewards if that awesomeness cannot be expressed to financial gatekeepers.

That's where the art of the pitch matters. Pitching to a venture capitalist might be the most vital part of your startup's success. This is where you express how important your product is or how in demand your services are. This is where you convince investors your product (and you) is worth investing in.

Next, you'll have to determine your company's value proposition, which is the heart of your competitive advantage. This tells venture capitalists why they should invest in your company and not others.

Investors are putting their money and reputation on the line for your company. Their leap of faith has to be as educated as possible. If you can educate them very thoroughly why your startup is different, why it stands out from the rest, investors will feel much more comfortable with their decision to reject other bids in favor of yours.

You don't only need to convince them to choose your company, you also need to convince them that rejecting the other companies won't come back to bite them in the rear. Nobody likes to live with regret, least of all people who put themselves in a position to lose millions of their dollars on a bad decision. The best way to reaffirm an investor's faith in your company is to provide a product or service that is fairly new to the market. New products mean less saturation and higher demand, especially if the product solves a problem or provides a unique function.

There are plenty of toasters on the market, but what about wireless toasters? Outdoors-people everywhere would surely line up to buy that. You're providing a product of real value to a certain sect of people. Your competitive advantage is that your toaster is wireless and portable. That would be your company's value proposition to your investor.

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This article originally appeared on the University of Houston's The Big Idea.

Rene Cantu is the writer and editor at UH Division of Research.

Hey startups, are you ready to rock and roll? Miguel Tovar/University of Houston

Here's what startups can learn from the Rolling Stones, according to University of Houston researchers

Houston voices

Editor's note: If you think you can't learn some business tips from a rock band, think again. The University of Houston's Big Idea has rounded up a few lessons to be learned from the Rolling Stones — along with advice from UH researchers.

"Start Me Up"

In 1970, the Rolling Stones' long-standing deal with Decca Records expired. This opened a giant door for the band, which I assume they painted black.

Because the band had achieved such success, they were able to form their own record label, dubbed Rolling Stones Records. This was done in an effort to exert more control over their music, not just creatively, but financially. The Stones could now retain the rights over their own music.

Much akin to this move, many startups are launched because entrepreneurs wish to have more control over certain aspects of their technology or product. When asked why he launched his own startup, James Briggs, Ph.D., professor of biochemistry at the University of Houston and president and CFO of Metabocentric Biotechnologies, explained, "Primarily, it was because we felt that development of the technology stood a much better chance if we prosecuted it rather than trying to find a licensing partner."

"Under Your Thumb"

It's no secret that one of the biggest perks of developing your own startup is that you get to be the one to take care of your baby; to oversee the development of your tech through all its stages. You and your co-founders make the decisions on the long road to achieving your vision. Similarly, Professor Briggs and his business partner John Weihua, Ph.D., chairman and CEO of Metabocentric, could now control their company and develop it according to their vision. Had Professor Briggs and Chairman Weihua gone with a licensing partner at such an early stage of their startup, it could have stymied their financial growth.

A licensing entity is not just costly, it handcuffs your startup to dealing with only one licensing partner: them. As a result, you can't generate revenue elsewhere, which you can do if you control your own company.

Much like the Stones' newfound ability to control their own music by not having the tentacles of Decca Records around it, Professor Briggs and Chairman Weihua now had that same ability with their tech; all because they chose to venture out on their own in the infancy of their startup. They were able launch their startup without licensing partners by acquiring non-dilutive funding, which grants startups money without seeking equity in return. So, again, you keep more control of your tech.

"Beast of Burden"

Big record companies have always made it a point to primarily sign acts that are already well established and have a strong fan base locally. Artists in the '60s had to really work hard to gain a big enough name for themselves in their region. Flyers, radio ads, playing weddings, bar mitzvahs, and birthday parties for free just to get your name out there, all the while having to create new material; musicians looking to get signed really had to put in the work.

Before they became household names, the Rolling Stones had garnered a big following in London in 1963. Big enough that the then-gigantic Decca Records noticed and decided to sign them. Record companies sign bands with big local followings because they are more likely to succeed on a grand scale, as opposed to artists who never ventured beyond their garage. In a sense, this was a way for big record companies to reduce the risk of signing an artist that turns out to be a dud.

"Beast of Burden (Remix)"

"Pharmaceutical companies, now, look to small biotech startups to de-risk the lead and approach before they consider partnerships or acquisitions," proclaimed Professor Briggs during his presentation at UH's Startup Pains event. "Pharmaceutical companies don't want to buy failure, they want to buy the success. So they make sure to look for small biotech companies who bring their tech to a point where it is de-risked enough that a partnership suddenly becomes less of a risk to undertake."

Biotech entrepreneurs have to also put in a lot of work to position their startups for potential deals and partnerships with giant pharmaceutical companies. Laying the groundwork for a startup includes searching for investors, virtually begging for money, entering competitions, updating your tech, growing your team, commercializing your product, and staying relevant. "It's a lot of hard work. There will be successes and there will be failures. But in the end, if you stay true to yourselves and your company, there's a greater chance it will pay off."

"Let's Spend the Night Together"

Chemistry, the non-science-y kind, is one of the most overlooked aspects of startups for entrepreneurs. The chemistry a team of individuals have with each other makes for a positive company culture that maintains high morale.

In music, nothing is more important than chemistry. You are whole rather than the sum of a band's parts. Mick Jagger met Keith Richards when they were 16 and became friends because they owned the same Muddy Waters record. Since that time, they have remained best friends. In the studio and on stage, few duos have portrayed the same level of camaraderie and chemistry as Mick and Keith. They met their drummer Charlie Watts at 17, just a year later, and bassist Ronnie Wood in 1975, and lo and behold, they're still all together today.

With a catalog of over 500 songs over 50 years, with the same four band members for the majority of that time, you'll be hard-pressed to find a better paragon of chemistry than the Rolling Stones.

For startups, a strong company culture composed of like-minded individuals working together with chemistry is a prime way to keep your employees motivated, especially when your company is so young, you cannot pay them very much. "You have to remember that most startups are extremely tiny, with 2 to 3 people even, so chemistry is vital. You want to have a culture where you can air your grievances with each other and be honest about your company," Professor Briggs said during the Q & A session of Startup Pains.

"Time Is On Your Side"

A good startup sees its employees working together, functioning as a well-oiled machine, spending long nights together figuring out problems, taking turns ordering Chinese for late meetings, checking each other's work, and learning each other's personalities to more effectively communicate. It takes time. But if the chemistry isn't there naturally, it'll be there once you put in the time to iron out each other's wrinkles.

Investors want to see that your startup has a positive culture before they invest. Similarly, funding entities view company culture as a component that impacts a startup's net profits. If your startup is in disarray, do you really think an intelligent investor is going to want to give you millions of their dollars?

"Even if your tech is great, investors need to see that the company behind the tech is worth the risk."


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This article originally appeared on the University of Houston's The Big Idea.

Rene Cantu is the writer and editor at UH Division of Research.

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Houston makes top 10 list for best US cities to start a business

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Houston plays a historic role in launching spacecraft. But it’s also a great place to launch a business.

A new list from USA Today Blueprint puts Houston in ninth place among the best U.S. cities to start a business in 2024. Austin grabs the No. 1 spot, and Dallas sits at No. 4.

“Starting and sustaining it is a major challenge, and there are a vast number of factors that can affect your chances of success,” says USA Today Blueprint. “While the best businesses and entrepreneurs can succeed anywhere and beat any odds, it can help to think about where your business might be more likely to succeed.”

USA Today Blueprint combed through data for 46 of the country’s most popular cities to create the ranking. Houston fares especially well in two categories — business openings and growth in GDP (gross domestic product):

  • In 2021, Houston saw 16,816 business openings and 13,785 business closures, resulting in a net gain of 3,031 businesses, according to USA Today Blueprint’s analysis. The net gain gives Houston a fourth-place showing for business openings.
  • From 2021 to 2022, Houston experienced GDP growth of 14.2 percent. That was a high enough rate to earn a third-place ranking for GDP growth. Only El Paso (15 percent) and Austin (14.3 percent) notched higher rates.

“Startups in Miami, Austin, and Dallas are particularly high contributors to their city’s total employment numbers. These cities also — alongside Houston and Jacksonville — make up five of the top 10 in terms of GDP growth,” says USA Today Blueprint.

Houston semiconductor researchers join DARPA-funded Texas team

teaming up

A team led by the University of Texas at Austin and partnered with Rice University was awarded $840 million to develop “the next generation of high-performing semiconductor microsystems" for the U.S. Department of Defense.

The Defense Advanced Research Projects Agency (DARPA) selected UT’s Texas Institute for Electronics (TIE) semiconductor consortium to establish a national open access R&D and prototyping fabrication facility.

The facility hopes to enable the DOD to create higher performance, lower power, lightweight, and compact defense systems. The technology could apply to radar, satellite imaging, unmanned aerial vehicles, or other systems, and ultimately will assist with national security and global military leadership. As a member of DARPA’s Next Generation Microelectronics Manufacturing (NGMM) team, Rice’s contributions are key.

Executive vice president for research Ramamoorthy Ramesh and the Rice researchers will focus on technologies for improving computing efficiency. In a Rice press release, Ramesh notes the need to enhance “energy-efficient computing” which highlights Rice’s qualifications to contribute to the solution.

New microsystem designs will be enabled by 3D heterogeneous integration (3DHI)semi, which is a semiconductor fabrication technology that integrates diverse materials and components into microsystems via precision assembly technologies.

Kepler Computing, is a member of the NGMM team and utilizes ferroelectrics to develop energy-efficient approaches in computer memory and logic, and was co-founded by Ramesh. Other Rice researchers include:

  • Lane Martin, director of the Rice Advanced Materials Institute
  • Ashok Veeraraghavan, chair of electrical and computer engineering
  • Pulickel Ajayan, the Benjamin M. and Mary Greenwood Anderson Professor of Engineering and founding chair of the materials science and nanoengineering department
  • Kaiyuan Yang, associate professor of electrical and computer engineering
  • Guha Balakrishnan, assistant professor of electrical and computer engineering

“Given the rapid growth of machine learning AI applications, there is a pressing need to fundamentally rethink current computing methodologies to advance the next generation of microelectronics,” Ramesh says in a news release. ”Rice University boasts world-class researchers with exceptional expertise in computer and electrical engineering poised to bolster this critical federally funded initiative.”

Overall, the project represents a total investment of $1.4 billion. The $840 million award from DARPA is a return on the Texas Legislature’s $552 million investment in TIE. TIE has funded the update of two UT fabrication facilities.

“TIE is tapping into the semiconductor talent available in Texas and nationally to build an outstanding team of semiconductor technologists and executives that can create this national center of excellence in 3DHI microsystems,” S.V. Sreenivasan, TIE founder and chief technology officer and UT professor of mechanical engineering adds.

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This article originally ran on EnergyCapital.

Houstonian shares journey of entrepreneurship from pivot to exit to focus on inspiring positivity

HOUSTON INNOVATORS PODCAST EPISODE 247

After years of tolling over her athleisure wear startup, Megan Eddings knew what her company needed for it to be successful, and she knew she wasn't the right person to do it.

Accel Lifestyle, a clothing brand based on Edding's patented antimicrobial Prema fabric, launched late in 2019 just ahead of boutique fitness studio craze was significantly affected by the pandemic. After pivoting to face masks, including manufacturing tens of thousands for the United States Military, Eddings says she went into the next few years with Accel being back on track to design stink-resistant workout clothing.

But Eddings knew the company needed a huge marketing push to make a splash in the direct-to-consumer world.

"The core of who I am is not a social media person," she says on the Houston Innovators Podcast. "That isn't my skillset. If you sell a product, one of the only ways to become wildly successful is to have an incredible marketing strategy that you need a lot of money to build and create. That is not something that I liked.

"I was so passionate about inventing something, but in order to really scale to the next level, I would have had to take on quite a bit of investment money," she continues.

The process of figuring this out wasn't fast — and it wasn't easy, Eddings says. It took a lot of soul searching and figuring out her strengths and what was right for her.

Eddings says she started considering B2B opportunities — some of which were with major retail brands — but these companies weren't willing to make the financial commitment to Accel or its Prema fabric. The one exception was Talbots, which agreed to stock Accel's clothing.

"It was like trying to fit a round peg into a square hole for a solid year," she says, explaining the emotional and mental toll the process took on her.

Eddings says that just as the opportunity for entrepreneurship found her — by way of her husband's sweaty workout gear she felt convinced she could improve — the next opportunity for Accel found her as well. Eddings was invited to film a segment featuring Accel's products on TV.

As great of an opportunity as it was to sell Accel's products, the segment would be even more meaningful to the company. Shortly after the it aired, a man reached out to Eddings with an acquisition offer from him and his two Australian colleagues who want to build a clothing brand as big as Patagonia, Eddings says.

"When the three men flew in, we had a three-hour lunch and I felt like I was sitting with friends," Eddings says. "I decided I was going to sell, and that was pretty much it." The terms of the deal were not disclosed.

Eddings, whose background in medical sales originally brought her to Houston 12 years ago, turned back to the business world — this time tackling another new industry: oil and gas. She's now the chief strategy officer of Houston-based consultancy New Wave Offshore Energy. And as much as she likes this new role, she says she's ready to add onto her plate a new venture taking her experience with making pivots and incorporating positivity into every asset of her life.

"What I've realized is everyone wants to be happier. When I would give talks about entrepreneurship, the No. 1 question I would get as a founder is 'how do you stay so positive?'" Eddings says.

With this inspiration, she's starting a podcast — The Pivot to Positivity — and has already filmed a pilot episode of a TV show with the same focus.

"Everyone just needs more joy in their life," Eddings says.

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