Recipe for success

Houston needs these 4 ingredients to be a world-class innovation hub

Houston has the potential to be a leader in innovation — we just need four things. Getty Images

Is Houston innovative? We put a man on the moon, are curing cancer, and are performing engineering miracles in the oilfield daily. But we don't have the Googles or Amazons of the world or a bustling startup or venture capital scene.

Painfully, Houston was the only one of the 10 largest U.S. metros not to be among the 20 final locations for Amazon's HQ2. By most measures of innovation leadership, Houston is hardly number one in Texas, let alone nationally.

This is a problem. Today, technology innovation is integral to success whether it be using artificial intelligence to improve oil production or patient care, and companies and entrepreneurs will go wherever they need to for the next growth opportunity. If we want the next man-on-the-moon success in Houston and to defend our leadership in energy, health care, etc., we need to be a leader and destination for driving innovation.

So, how does a city like Houston transform itself into a digital technology and innovation leader? That was the core question for a strategy that I led for Accenture working with the Greater Houston Partnership and the mayor's Technology and Innovation Taskforce in early 2017.

After analyzing successful innovation ecosystems around the world, we identified four critical components that make a city a world-class digital innovation location:


Courtesy of Accenture


Talent
You need talent with the right skillsets and mindsets. A modern digital ecosystem needs developers, designers, data scientists, and more. They must also have the right mindset and be able and willing to take risks and do difficult things.

Houston already has tremendous amounts of STEM talent but doesn't produce enough talent or retain enough of the locally-grown talent. To jumpstart, we are going to have to import it initially. The main focus is attracting a large digital company to Houston (e.g. Tesla, Google). This would simultaneously bolster our talent base and image, while also providing opportunities for Houston students to stay and pursue their careers in digital innovation.

Collisions
World-class cities manage to create collisions between talent that spark huge opportunities. Think Steve Wozniak meeting Steve Jobs and Bill Gates meeting Paul Allen. Importantly, they must also collide with customers, investors, other start-ups, academia, people of different backgrounds, and even lawyers (sigh).

In Houston, we've seen this same network effect with the Energy Corridor and Texas Medical Center, but we need a similar setup for digital innovation. That's why the planned Innovation District in Midtown, funded by Rice University, is a game-changer.

Resources
Houston has significant capital in corporations and high-net-worth individuals but is short on angel or venture capital, which would otherwise bring not only money, but also mentorship and connections for young companies.

Detroit had success overcoming this with a 'fund of funds' model, pioneered by Chris Rizik. Local corporations invest in the fund-of-funds which, in turn, invests in venture funds from outside of the state. Their primary motivation should be to earn a return for their investors, but they are asked to look at local companies and spend time in the ecosystem.

The Houston Exponential Venture Fund led by Guillermo Borda recently had its first close of $25 million, and I'm optimistic it'll double or triple in size in the near future.

Impact
Successful ecosystems know how to scale and turn a small company into an international Goliath in just years.

For Houston to be successful in scaling, we must align startups to our local industries, and they must stay and grow here. To solve this challenge, Houston is focusing on becoming famous in certain core themes, including robotics/autonomous systems, data science, industrial IoT, and cybersecurity. These are what our industries – and the world – need, have large inflows of venture capital, and are what Houston has unfair advantage in.

At the end of the day, all four ingredients are essential; none can go to zero or the multiplying effect won't happen. We have to get all of these areas right, all at once. No one company, institution, or sector of the economy can solve the challenge alone. That's why organizations like Houston Exponential and the plans for Houston's Innovation District have been popping up so solve this problem and create connections.

It's an incredibly exciting time for Houston with so much momentum, growth, and demand. We have made bold bets in the past, with our port, TMC, the Space Center, and many more. It'll be a mistake not to carry that legacy forward with a bold new bet for the twenty-first century.

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Brian Richards is Houston innovation hub director at Accenture and board member at Houston Exponential. Read more about him and his career here.

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Building Houston

 
 

Auburn University's SwiftSku took first place in this year's virtually held Rice Business Plan Competition, but it was the second place company that went home with over half a million in cash and investment prizes. Photo via rice.edu

In its 21st year, the Rice Business Plan Competition hosted 54 student-founded startups from all over the world — its largest batch of companies to date — and doled out over $1.4 million in cash and investment prizes at the week-long virtual competition.

RBPC, which is put on by the Rice Alliance for Technology and Entrepreneurship, took place Tuesday, April 6, to Friday, April 9 this year. Just like 2020, RBPC was virtually held. The competition announced the 54 participating startups last month, and coordinated the annual elevator pitches, a semi-finals round, wildcard round and live final pitches. The contestants also received virtual networking and mentoring.

Earlier this week, Rice Alliance announced the seven student-led startups that then competed in the finals. From this pack, the judges awarded the top prizes. Here's how the finalists placed and what won:

  • SwiftSku from Auburn University, point of sales technology for convenience stores that allows for real time analytics, won first place and claimed the $350,000 grand prize from Goose Capital. The company also won the $50,000 Business Angel Minority Association Prize, the $500 Best Digital Elevator Pitch Prize from Mercury Fund, and the $500 Third Place Anbarci Family People's Choice prize, bringing the company's grand total in cash and investment prizes to $401,000. The company also won the CFO Consulting Prize, a $25,000 in-kind award.
  • AgZen from the Massachusetts Institute of Technology, a pesticide alternative spray and formulation technology company, won the second place $100,000 investment prize (awarded by Finger Interests, Anderson Family Fund, Greg Novak, and Tracy Druce). The startup also won a $300,000 Owl Investment Prize, the $100,000 Houston Angel Network Prize, the $500 Best Energy Elevator Pitch Prize from Mercury Fund, and the $1,500 Third Place Anbarci Family People's Choice prize, bringing the company's grand total in cash and investment prizes to $502,000. The company also won the $30,000 in-kind Polsinelli Energy Prize.
  • FibreCoat GmbH from RWTH Aachen University, a startup with patented spinning technology for the production of inexpensive high-performance composite fibers, won the third place $50,000 investment prize (also awarded by Finger Interests, Anderson Family Fund, Greg Novak, and Tracy Druce). The company also won the $100,000 TiE Houston Angels Prize and the $500 Best Hard Tech Elevator Pitch Prize from Mercury Fund, bringing the company's grand total in cash and investment prizes to $150,500.
  • Candelytics from Harvard University, a startup building the digital infrastructure for 3-D data, won the fourth place $5,000 prize.
  • OYA FEMTECH Apparel from UCLA, an athletic wear company that designs feminine health-focused clothing, won the fifth place $5,000 prize. The company also won the $5,000 Eagle Investors Prize, the $25,000 Urban Capital Network Prize, and the $1,000 Second Place Anbarci Family People's Choice prize, bringing the company's grand total in cash and investment prizes to $36,000.
  • LFAnt Medical from McGill University , an innovative and tech-backed STI testing company, won the sixth place $5,000 prize and the $20,000 Johnson and Johnson Innovation Prize, bringing the company's grand total in cash and investment prizes to $25,000.
  • SimpL from the University of Pittsburgh, an AI-backed fitness software company, won the seventh place $5,000 prize. The company also won the $25,000 Spirit of Entrepreneurship Prize from the Pearland Economic Development Corp., bringing the company's grand total in cash and investment prizes to $30,000.

Some of the competition's participating startups outside of the seven finalists won monetary and in-kind prizes. Here's a list of those.

  • Mercury Fund's Elevator Pitch Prizes also included:
    • Best Life Science $500 Prize to Blue Comet Medical Solutions from Northwestern University
    • Best Consumer $500 Prize to EasyFlo from the University of New Mexico
    • Best Overall $1,000 prize to Anthro Energy from Stanford University
  • The Palo Alto Software Outstanding LivePlan Pitch $3,000 Prize went to LiRA Inc. from the University of North Carolina at Chapel Hill
  • The OFW Law FDA Regulatory Strategy Prize, a $20,000 in-kind award went to Paldara Inc. from Oklahoma State University.
  • The Silver Fox Mentoring Prize, which included $20,000 in kind prizes to three winners selected Ai-Ris from Texas A&M University, BruxAway from the University of Texas, and Karkinex from Rice University as recipients.
  • The first, second, and third place winners also each received the legal service prize from Baker Botts for a total of $20,000 in-kind award.
  • The Courageous Women Entrepreneurship Prize from nCourage — a $50,000 investment prize — went to Shelly Xu Design from Harvard University.
  • The SWPDC Pediatric Device Prize — usually a $50,000 investment divided its prize to two winners to receive $25,000 each
    • Blue Comet Medical Solutions from Northwestern University
    • Neurava from Purdue University
  • TMC Innovation Healthcare Prize awarded a $100,000 investment prize and admission into its accelerator to ArchGuard from Duke University
  • The Artemis Fund awarded its $100,000 investment prize to Kit Switch from Stanford University
The awards program concluded with a plan to host the 22nd annual awards in 2022 in person.

If you missed the virtual programming, each event was hosted live on YouTube and the videos are now available on the Rice Alliance's page.

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