Investor advocates now is the time to position Houston as a leading biomanufacturing hub

houston innovators podcast episode 178

Veronica Wu, founder of First Bight Ventures, joins the Houston Innovators Podcast to outline Houston's opportunities in synthetic biology and biomanufacturing. Photo courtesy

Houston has all the ingredients to be a successful synthetic biology hub, says Veronica Wu. She believes so strongly in this that she relocated to Houston from Silicon Valley just over a year ago to start a venture capital firm dedicated to the field. Since then, she's doubled down on her passion for Houston leading in biotech — especially when it comes to one uniquely Houston opportunity: biomanufacturing.

While Houston's health care innovation scene is actively deploying synthetic biology applications, Wu points to Houston-based Solugen, a plant-based chemical producer, as an example of what Houston has to offer at-scale industrial biomanufacturing. Houston has the workforce and the physical space available for more of these types of biomanufacturing plants, which have a huge potential to move the needle on reducing carbon emissions.

"This is really fundamental technology that's going to change the paradigm and whole dialogue of how we are making a significant impact in reducing a carbon footprint and improving sustainability," says Wu, founder and managing partner of First Bight Ventures, on the Houston Innovators Podcast.

Several aspects — government funding, corporate interest, advances in technology — have converged to make it an ideal time for synthetic biology innovators and investors, Wu explains on the show, and she has an idea of what Houston needs to secure its spot as a leader in the space: The BioWell.

First introduced at a Houston Tech Rodeo event at the Texas Medical Center's Innovation Factory, The BioWell is a public-private partnership that aims to provide access to pilot and lab space, mentorship and programming, and more support that biomanufacturing innovators critically need.

"The way we envision The BioWell is it will provide a holistic, curated support for startups to be able to get across the Valley of Death," Wu says, explaining that startups transitioning from research and development into commercialization need extra support. The BioWell will provide that, as well as allow more engagement from corporations, investors, and other players.

Now that her plans for The BioWell have been announced, Wu is looking for those who want to be a part of it.

She shares more about her mission and what's next for First Bight Ventures on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.

Finding funding is tough and might get you in the mother of all holes — the Valley of Death. Miguel Tovar/University of Houston

7 ways to escape the Valley of Death, according to University of Houston research

Houston Voices

To walk through the valley of death means that death and misery are low points (valleys) in the human experience through which we all must inevitably walk and experience.

Although not as morbid, in the world of startup businesses, the valley of death is still grim. It is a low point in your startup's life where your business suffers and all seems lost. Specifically, it describes how hard it is to cover negative cash flow while you wait for your startup to start generating revenue from actual consumers. Sadly, only 10 percent of startups will survive the valley of death after the first three years, according to a Gompers and Lerner analysis.

"Our startup overcame the valley of death by making believers out of investors. Often, you have ideas that are worthwhile, but you have to find investors who also believe that," says Jason Eriksen, Ph.D., associate professor of pharmacology and chair and co-founder of Alzeca Biosciences.

Alzeca develops advanced imaging technology that helps physicians detect Alzheimer's at a much earlier stage than ever before. Alzeca is one of 28 groundbreaking and innovative startups changing the world at UH's Technology Bridge.

"Initially, our investors rejected us because they were disappointed that we couldn't cure Alzheimer's, and that we could merely stage it. That sent us spiraling into the valley of death. We overcame that by making other investors believers. We made them believe in our technology for detecting the disease early and that it would be life-changing for millions of sufferers," Eriksen says.

Here are another seven ways to dig yourself out of, not just a hole, but the mother of all holes: the valley of death.

1. Gather resources.

Planning your business is a good way to minimize risk. Such preparation involves determining how much money you will need to get to the revenue generation stage, and how much money you will need to cover costs in the likely event you fall into a financial hole. The more resources you've accumulated beforehand, the more padding you'll have if you fall on your face.

2. Don't quit your day job.

Keep your day-to-day job to keep money coming in and your personal finances covered. Use your weeknights and weekends to put in work on your company while you wait to generate revenue. You'll be making money while you wait for money. This way might take longer, but with proper planning, you can ensure that your lights will stay on while your startup struggles to bring in revenue while spiraling in the valley of death.

3. Find funding from friends and family.

"Angel investors and venture capitalists will feel a lot better about investing if they see you already have money at stake," Eriksen says.

That pre-investor money usually comes from friends and family. There is some weight to the idea that you should never mix business with family, but there are exceptions.

You're more likely to secure funding from friends and family if you show them you have a more-than-solid business plan. Your loved ones will want to see figures and metrics that have tracked what your business has done or what it is projected to do. They will also want to see that you are an expert in your business. It would also help to show them a payment plan where you outline when and how you will pay their money back.

Once you have friends and family funding secured, you're a lot more likely to acquire more funding from investors, and the long, hard road out of the valley of death begins.

4. Call for crowdfunding.

​One smart way to jet pack out of the valley of death is to launch a crowdfunding campaign. If you know your tech, service, or product is a game changer, crowdfunding will put that to the test. This is where you'll obtain funding from everyday people who like what you have to offer enough to put all their faith in it in the form of dollars and cents.

5. Enter competitions and apply for grants.

Enter as many competitions as you can.

"Because of the government's recent surge in focus on tech-based and energy-based startups, there are now more startup competitions available in major VC (venture capitalist) geographic hotspots like San Francisco, Boston, New York, LA, and San Jose," Eriksen says.

While those cities are the startup hotspots, their activity reflects the current market for startups all over the country. Thankfully, that activity is at an all-time high, so you can rest assured that startup competitions are abundant in your own city, too.

This is your chance to show the world your hoverboard and attain funding you don't have to pay back, all without even relinquishing any equity. These competitions are, get this, competitive, so it would wise to register as early as you can.​

6. Consider joint venture.

There might be a company out there that sees your product or services as congruent to their own business. Reach out to them and try to convince them that a joint venture would behoove both companies. This approach is not uncommon, and companies have been known to advance funding early on with the expectation that you'll reimburse them once your revenue starts rolling in.

7. Borrow if need be. 

Somewhere out there is a loan with your name on it. Wallowing in the valley of death can really leave a business owner feeling desperate and alone in the world. So desperate, that is, that they might mess around and apply for a loan. This alternative is the nuclear option. A last resort. It's only a viable approach if you're willing to put your home or other big assets on the line as collateral.

Typically, banks will only approve loans to startups that are cash-flow positive. So maybe this option is best if you've succeeded with a few of the aforementioned approaches so much that they helped your company start generating revenue. Once you've reached that point, that's the prime time to apply for a loan or line of credit.

"The phrase 'valley of death' is appropriate because it is a death sentence for the vast majority of startups," warns Eriksen.

That doesn't mean you go down without a fight.

When Buster Douglas fought Mike Tyson, every fan, expert, and sportswriter counted him out. For the entire fight, they were right. His defeat was inevitable. Then the tenth round happened.

Not only did he not go down without a fight, he won the bout. He beat the champ, and the odds. If you want your best chance at beating the odds, you do everything you can. You fight. Loans, competitions, crowdfunding, joint ventures; whatever it takes.

"The valley of death is only a death sentence if you allow it to be."

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

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

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Houston lab explores how AI bots can help the elderly

AI for aging

The University of Houston’s Empathetic Lifespan AI & Robotics for Aging (ELARA) Lab is currently conducting research into how AI bots may be able to help the elderly live more social and independent lives through several ongoing initiatives.

The lab officially launched last month as part of the Gerald D. Hines College of Architecture & Design under the leadership of Assistant Professor Chorong Park. Part of the lab’s mission is tackling ongoing problems with aging, such as dealing with disabilities and social isolation. Researchers’ current work is focused on designing a new AI companion bot specifically tailored to the needs of older people.

“We need to take all the needs of older adults seriously,” Park said in a news release. “They won't use the robot if they don't feel at ease or if they feel they are being constantly watched.”

The field testing of new AI bots in this population hopes to overcome several traditional obstacles in technology use among the elderly. A study by Park shows that many older people have a fear of overt surveillance when using advanced AI. There is also ageism to consider. Most new technologies are designed with younger and employed buyers in mind, not retirees who may need help remembering daily tasks or accessing important information.

“The more older adults are excluded from technology development, the worse those technology gaps will become,” Park said. “AI and the majority of technologies are created for younger people, so my research method integrates older adults directly into the design process.”

ELARA recently collaborated with the Mamie George Community Center in Richmond, Texas, to track seniors’ response to desktop AI bots like Emo and Cupboo. Researchers also had participants use air-dry modeling clay to create their ideal robotic companion.

While the eventual AI bot may be able to help the elderly feel less isolated and more supported, there are concerns to consider. A study published in the Asian Journal of Psychology charted the development of delusional thinking in a 72-year-old woman who became convinced the empathic-response bot was in love with her. The rise of “AI psychosis” has the potential to exacerbate mental health problems, particularly in socially isolated people, which a quarter of Americans over the age of 65 are.

ELARA’s research is focused on creating “pet-like” AI models with enhanced trust cues. If it can overcome the dangers of socially isolated people relying on AI for companionship, it could be a big step forward for independent aging.

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.

___

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.

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