houston voices

Did the pandemic slowdown innovation in Houston? Maybe not as much as you'd expect

Let's look at the pace of innovation in Houston over the past couple of years. Graphic byMiguel Tovar/University of Houston

When the world came to a halt in 2020 due to COVID-19, innovation moved forward as normal day to day operations went virtual. Small business incubators like the University of Houston Technology Bridge, The Cannon and The Rice Alliance for Technology and Entrepreneurship, have found that, even during a lockdown, new innovations and leading-edge technologies have become easier to create.

“Hardship always leads to innovation. People have to get scrappy and creative. There’s always a lot of good that comes from the bad, ” founder and president of The Cannon, Lawson Gow, said.

Incubators coping with lockdown

Small business incubators provide a wide variety of crucial resources that startups, entrepreneurs, investors and corporate innovators need to succeed.

What did these incubators do to continue to help push their communities toward success when the lockdown went into effect?

The very first thing The Cannon did was set up a 24-hour hotline that businesses could call if they needed help with anything.

“The Cannon Emergency Response Team emerged from these efforts and was on the front lines of doing whatever we could to help people survive and get back on track,” Gow said.

He also said that it was hard to see hundreds of businesses struggling at the beginning of the pandemic. Kerri Smith, the associate managing director of The Rice Alliance said, as an organization built on forging connections that accelerate startup success, The Rice Alliance knew that staying afloat and continuing to offer their programs were crucial aspects of their important work.

“Within a matter of weeks, we organized and hosted our first virtual pitch event for startups innovating in the energy sector. Originally slated to be held at the Offshore Technology Conference but then cancelled, The Rice Alliance Energy Tech Venture Day portion of the OTC event provided a great platform for our startups to get exposure,” Smith said.

The University of Houston Technology Bridge began to connect businesses to the Small Business Development Center, where they could get help with all their preliminary operational tasks. Also, the SBDC helped businesses access the COVID-related funding that the government was offering.

“That seemed to help some of them get through some of the challenging times early on in the pandemic, ” said Chris Taylor, executive director of the UH Office of Technology Transfer and Innovation.

Growing digitally

After the lockdown went into effect, just about everything went virtual. At this point social distancing wasn’t even an option unless you were going to the doctor’s office or the grocery store.

As organizations that were made to help and support small businesses, it was important that incubators remained connected to their communities and communicate with them even in a virtual world.

“We provided intentional and comprehensive updates on resources, events and community opportunities through email outreach and social media, and featured success stories of entrepreneurs who participated in our programs,” Smith said.

Through The Cannon’s CERT program, they stayed extremely connected to their community and even built an entire digital platform called Cannon Connect that served and continues to serve their virtual community.

“It’s our own internal LinkedIn for Cannon members inside and outside Cannon spaces. It has educational curriculum, a job board, an equity crowdfunding site, and much more,” Gow said.

Gow said Cannon Connect will be the “lasting legacy of the COVID era.”

------

This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton, the author of this piece, is the communications coordinator for The Division of Research.

Trending News

Building Houston

 
 

Last weekend was a tumultuous one for founders and funders in Houston and beyond. Here's what lessons were learned. Photo via Getty Images

Last week, Houston founder Emily Cisek was in between meetings with customers and potential investors in Austin while she was in town for SXSW. She was aware of the uncertainty with Silicon Valley Bank, but the significance of what was happening didn't hit her until she got into an Uber on Friday only to find that her payment was declined.

“Being positive in nature as I am, and with the close relationship that I have with SVB and how they’ve truly been a partner, I just thought, ‘OK, they’re going to figure it out. I trust in them,'” Cisek says.

Like many startup founders, Cisek, the CEO of The Postage, a Houston-based tech platform that enables digital legacy planning tools, is a Silicon Valley Bank customer. Within a few hours, she rallied her board and team to figure out what they needed to do, including making plans for payroll. She juggled all this while attending her meetings and SXSW events — which, coincidentally, were mostly related to the banking and fintech industries.

Sandy Guitar had a similar weekend of uncertainty. As managing director of HX Venture Fund, a fund of funds that deploys capital to venture capital firms around the country and connects them to the Houston innovation ecosystem, her first concern was to evaluate the effect on HXVF's network. In this case, that meant the fund's limited partners, its portfolio of venture firms, and, by extension, the firms' portfolios of startup companies.

“We ultimately had no financial impact on venture fund 1 or 2 or on any of our portfolio funds or our underlying companies,” Guitar tells InnovationMap. “But that is thanks to the Sunday night decision to ensure all deposits.”

On Sunday afternoon, the Federal Deposit Insurance Corp. took control of SVB and announced that all accounts would be fully insured, not just up to the $250,000 cap. Customers like Cisek had access to their accounts on Monday.

“In the shorter term, the great news is SVB entity seems to be largely up and functioning in a business as usual manner,” Guitar says. “And they have a new leadership team, but their existing systems and predominantly the existing employee base is working well. And what we're hearing is that business as usual is taking place.”

Time to diversify

In light of the ordeal, Guitar says Houston founders and funders can take away a key lesson learned: The importance of bank diversification.

“We didn't think we needed one last week, but this week we know we need a resilience plan," she says, explaining that bank diversification is going to be added to "the operational due diligence playbook."

"We need to encourage our portfolio funds to maintain at least two banking relationships and make sure they're diversifying their cash exposure," she says.

A valued entity

Guitar says SVB is an integral part of the innovation ecosystem, and she believes it will continue on to be, but factoring in the importance of resilience and diversification.

"Silicon Valley Bank and the function that they have historically provided is is vital to the venture ecosystem," she says. "We do have confidence that either SVB, as it is currently structured or in a new structure to come, will continue to provide this kind of function for founders."

Cisek, who hasn't moved any of her company's money out of SVB, has similar sentiments about the importance of the bank for startups. She says she's grateful to the local Houston and Austin teams for opening doors, making connections, and taking chances for her that other banks don't do.

"I credit them to really being partners with startups — down to the relationships they connect you with," she says. "Some of my best friends who are founders came from introductions from SVB. I've seen them take risks that other banks won't do."

With plans to raise funding this yea, Cisek says she's already started her research on how to diversify her banking situation and is looking into programs that will help her do that.

Staying aware

Guitar's last piece of advice is to remain confident in the system, while staying tuned into what's happening across the spectrum.

“This situation that is central to the venture ecosystem is an evolving one," she says. "We all need to keep calm and confident in business as usual in the short term while keeping an eye to the medium term so that we know what happens next with this important bank and with other associated banks in the in our industry."

Trending News