#StartupsEverywhere: Houston, TX

#StartupsEverywhere Profile: Lawson Gow, Founder and CEO of The Cannon and Brad Burke, Managing Director of the Rice Alliance

This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.

Despite its reputation as an “oil patch town”, Houston is home to a thriving and diverse startup ecosystem. This week, we learned from Brad Burke and Lawson Gow that Houston’s diversity, concentration of research institutions and active investors, and involved support from local government have been critical in making the city a startup hub.

What’s your [personal] role in the Houston-area startup ecosystem? How did you get involved working with startups in Houston?

Brad: I am the Managing Director of the Rice Alliance and have led the Rice Alliance since 2001. Since coming to Rice in 2001, I have worked with entrepreneurs to foster networks and help startups find investments, team members, mentors and customers. The programing I’ve created at the Rice Alliance has impacted more than 2300 companies, who have since raised more than $5.9 billion in funding and hired thousands.

Lawson: I am the Founder and CEO of The Cannon, a 25-acre startup campus in Houston. I was born and raised in Houston and love this city, but have been frustrated with its lack of startup infrastructure. Over the past decade we’ve seen entrepreneurial hubs popping up in cities all over the country, and yet, for a multitude of reasons, Houston has fallen behind. This has caused our talented entrepreneurs to leave the city and go elsewhere in search of the resources they need to succeed. As a city, we need to urgently build up our entrepreneurial support structure to keep our startups here.

I launched The Cannon in November of 2017 to be the consolidator of existing efforts in the city and the facilitator of a Houston-sized entrepreneurial ecosystem. Over the past couple of months, we have moved around 50 companies into our 48,000 square foot space, including an in-house venture fund and accelerator program, and have developed programs to equip startups with the tools they need to grow.

Our traction has made it evident to us that people here are hungry for this kind of startup support, and that we can help foster the kind of density needed for a true startup hub in Houston.

Can you tell us more about what your company does?

Brad: The Rice Alliance for Technology and Entrepreneurship (Rice Alliance) is Rice University’s nationally-recognized initiative devoted to the support of technology commercialization, entrepreneurship education, and the launch of technology companies. It was formed as a strategic alliance of three schools: the George R. Brown School of Engineering, the Wiess School of Natural Sciences and the Jesse H. Jones Graduate School of Business, in collaboration with the Vice Provost and the Office of Research.

The Rice Alliance is a catalyst for building successful ventures through education, guidance and connections. Its mission is to support the creation of technology-based companies and the commercialization of new technologies in the Houston community and Southwest.

The Rice University Business Plan Competition is the World’s Richest and Largest, awarding more than $10 million in prizes since 2001. Over 201 past competitors are in business today or successfully exited having raised nearly $1.9 billion in capital and exit dollars.

OwlSpark Accelerator was founded in 2012 to ignite a passion for entrepreneurship within the Rice community. OwlSpark provides hands-on entrepreneurship experiences and a roadmap from innovation to commercialization. The program has served 35 startups and more than 100 entrepreneurs.

Lawson: One really unique feature is that we are building out an entire campus devoted to startup activity. And much like a college campus that has many different types of organizations and entities all there to support the student body in different ways, we are building or partnering with groups to develop campus resources that support our entrepreneurial population – a gym, a makerspace, a juice bar, a coffee shop, micro-housing, etc. all on a walkable campus with over 140,000 square feet of various types of coworking space.

But especially early on it has been really crucial to us that we cultivate a contagiously energizing environment full of passionate, supportive entrepreneurs.

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What’s the most exciting thing that has happened for Houston in the past year?

Brad: The launch of Houston Exponential (HX) is the most exciting thing that has happened to Houston in the last year. It is the center for all entrepreneurship efforts in Houston. It brings together the vast entrepreneurship ecosystem under one umbrella, one purpose. The collaborative initiative will serve to connect the vast amount of leaders, entrepreneurs and numerous resources in Houston creating impactful collisions of innovation and resources. As their mission states, HX and its partners will transform Houston through innovation and entrepreneurship.

Another exciting aspect of HX is the Fund to Funds, headed by seasoned fund of funds manager Guillermo Borda. The fund of funds will invigorate the community with capital and expertise to help attract startups and talent to the area.

These efforts stand on the shoulders of entrepreneurship efforts in Houston such as Station Houston, TMCx, Johnson and Johnson Innovation, AT&T Foundry, BioHouston and the Rice Alliance.

Lawson: The most exciting thing that is happening is that lots of things are happening all at once. It seems like Houston’s entrepreneurs are fed up with the city’s shortcomings and that the city is really poised in this moment to “get it right,” and to collectively focus on development of our startup communities in ways that will lead to long-lasting change. The Cannon is one example of the emergence of entrepreneurial hubs in Houston, but there are many, including Station Houston, a tech incubator in Downtown, and Houston Exponential, which is an entity formed by a task force to address the city’s ecosystem issue. These entities are all increasingly leveraging each other to gain more and more momentum and I believe that Houston is going to have a really exciting next few years of startup growth.

What makes Houston an ideal place to start a company? What is the biggest challenge you face in Houston?

Brad: Two billion dollars per year of research is conducted by the research institutions in the Houston region. This number includes the TMC institutions in addition to three top tier universities: Rice University, Texas A&M, and University of Houston. This wealth of knowledge and research funding places Houston among the most innovation rich cities in the world, a theme that plays throughout its key industries. Houston is home to the world’s largest medical center, the Texas Medical Center; it is the energy capital of the world, and is home to the third greatest number of corporate headquarters in the U.S. The large and diverse base of corporations provides a strong customer base, resource for pilot projects, potential customer feedback and direction for technologies that can impact industry around the world.

Houston also has one of the three youngest populations in the U.S.; this combined with the most diverse population in the country gives unmatched energy and opportunity.

As for challenges, Houston, like most cities in the US does not have enough venture capital and early-stage funding. Though Angel funding is very active, private equity is very strong and corporate venture funding is increasing substantially.

Lawson: We’ve got two big challenges that need to be overcome. The first is our culture – we have long been an oil patch town, by reputation and in reality, with a focus on big corporations. But we have the boundless entrepreneurialism of the Texas Wildcatter in our DNA and if we can re-calibrate a bit…I believe we are a sleeping giant that will explode onto the global startup scene, but the slow transition characteristic of widespread culture change lies ahead.

The second is our sprawl. Our population is extremely spread out, and in order to ‘solve the sprawl,’ we are going to have to develop a number of different startup hubs throughout the city. We can’t expect entrepreneurs to commute over an hour every day just to get where they need to be. To address our density-inhibiting geography, the hubs in Houston are partnering together to create a Houston Pass, which will allow entrepreneurs to have access to any space in the city no matter where they are.

The upside is Houston has a number of inherent advantages. Our cost of living is low, we have the most diverse, vibrantly multi-cultural population in the country, a huge number of high net worth individuals who are increasingly making angel investments in startups, and a culture of open friendliness. This final characteristic truly will prove to be a crucial component of Houston’s startup scene – influencers and mentors are extremely accessible, rather than siloed off, and people are naturally welcoming and willing to be helpful resources to one another.


What industries have historically thrived in Houston? How has this shaped the startup ecosystem there?

Brad: Houston is known as the energy capital of the world and is home to the world’s largest medical center with 59 member institutions with 10 million patient encounters per year. The volume of companies, interactions and international relationships places Houston among the largest economies in the world. Though the perception is often that these large, worldwide industries are cumbersome and slow, they have to continually innovate and adapt to stay competitive. Houston has positioned itself to be a place of innovation for these industries. Houston is targeting industrial digital transformation, concentrating on technologies such as robotics and IOT that transfer across several sectors. The corporate density in Houston allows these technologies to be easily adapted and adopted by multiple industries creating a significant market.

Lawson: Energy. And the focus on this space has hindered our entrepreneurial development because culturally we have been a big corp town whose priorities have been over-allocated to what we know best. But we are finally understanding that we as a city need to become more economically diverse, and we are seeing in other cities that building startup ecosystems is a really effective vehicle through which to accomplish this.

Are there specific public policies or government initiatives that have enabled startup growth in Houston?

Brad: Recent dynamic efforts by the Mayor’s Greater Houston Partnership’s Innovation Roundtable, Mayor Turner’s Innovation and Technology Task Force to create HX and bring all the partners together have brought a united vision for entrepreneurship, investment and the startup culture of Houston.

How involved are your government representatives in the Houston startup space?

Lawson: Mayor Sylvester Turner has made it one of his personal priorities to have a renewed attention to Houston’s startups and related entities. His office has already been a great enabler for ecosystem development in Houston and will be an important contributor to our city’s growth.

From a policy perspective, do you have any wishlist items for your startup ecosystem?

Lawson: Houston is a multi-cultural melting-pot of diversity and the more grants and programs we can have that target disenfranchised founders and their startups, the more successful ecosystem will be. We have the potential to foster an incredible depth and scope of perspective and purpose-driven startups birthed in Houston.

Are there some startups to watch coming out of the Houston-area?

Lawson: Heck yes!

  • Thrive+: a company dedicated to reducing the negative effects of alcohol, is a local startup that has taken off and appeared on Shark Tank on February 25th!

  • Croozen: a long-distance, ridesharing technology that enables carpool on steroids, is completing a big venture round and will be a really exciting company to watch over the next year.

  • Mainline: an esports community-focused platform for news and events, is based at The Cannon and just threw a HUGE watch party on our campus for Overwatch’s Houston team The Outlaws

  • Data Gumbo: blockchain technology for Oil & Gas smart contracts (because we haven’t TOTALLY abandoned our favorite industry)