Every now and then I get dragged into a conversation where I am asked what Houston needs to jump into the big leagues of tech innovation. Thursday night at the Caroline Collective was no exception.
Before answering I always put out several disclaimers. Houston is home to several great tech companies and is home to a lot of innovation. Alert Logic, GlycosBio, and PodCastReady are all great examples of Houston bred startups with forefathers like Compaq, BMC, and WordPress ahead of them. Houston has great incubators and entrepreneurship centers. Houston has a lot going for it. With that laid out there is something very specific I would change. Houston desperately needs a strong engineering/research university (although we have life sciences more than covered!).
Silicon Valley is home to Stanford, with Cal (aka Berkeley) just a stone throw away. Those two schools conduct over $1.2 billion of research alone. In Texas, UT ($446 million) and A&M ( $544 million) are the big non-medical research schools. Compare that with Rice ($70 million) or UH ($73 million) and you can see that there is a substantial research gap. Strong research is important. There is a straight line between great research at UT and companies like ActaCell.
The good news for Houston is that UT MD Anderson + UT Houston + UTMB + BCM do over $1.3 billion of medical research a year in town. That’s a space we can dominate. But if we could change one thing…
4 responses so far ↓
1 Twitted by marc1919 // Aug 2, 2009 at 1:51 am
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2 D.G. // Aug 2, 2009 at 5:55 am
Some people say that anyone starting a business outside of the Valley is at a disadvantage. It’s where all the best brains go. It has its own culture – it’s normal to start a business there, rather than be lured away to banking or consulting. And it has a little ecosystem to support it all.
3 Marc Nathan // Aug 2, 2009 at 12:42 pm
Aziz Gilani of DFJMercury writes on his personal blog http://texvc.com/2009/08/02/what-houston-really-needs/about what he thinks Houston needs to compete and the main conclusion he comes up with is that we are suffering from a relative lack of engineering research at our universities. I consider Aziz a personal friend, and I helped plan the party that got this conversation started in the first place. With that said, I think that his post is technically correct, but misses some of the big picture.
As someone who sees entrepreneurs and helps startups every day at the Houston Technology Center, I don’t know if the schools are the issue here. Yes, we could all use more talented researchers and more research commercialization, but that’s not the only place where innovation comes from. Houston is ranked 10 worldwide by number of patents (http://images.businessweek.com/ss/09/04/0422_inventive_cities/11.htm) due mostly to the engineering focus of our energy and medical industries.
There are probably thousands of interesting research studies sitting on the shelves of our current universities, but without entrepreneurs commercializing them, they will continue to languish. Making the leap from the lab to the marketplace is extremely difficult under even the best of circumstances. It is nearly impossible without help from people who ‘have been there and done that’.
I believe that the scarcest resource in Houston is not venture money (good money always chases good deals) and it’s certainly not entrepreneurial talent (we’re a city with an entrepreneurial spirit embedded in our DNA) – it’s mentorship. There are simply not enough investors/angels/consultants/incubators to help grow and support the ideas coming out of universities and our large corporations.
The ‘C’- and Director- level talent pool is still too small and it needs to be grown for the next wave of entrepreneurs to pick from to create new businesses. The only way to do this is to create successful large businesses that spin off talented and hungry managers. It’s difficult to name many spinoff companies from Compaq or Lexicon that thrive in Houston today, but just up the road you can name dozens of former Dell and Trilogy execs that have started or joined new startups.
Creating this mid-level group of support personnel that understand the startup life cycle is the single most important (not to mention fastest and cheapest) way to compete in the global market place of ideas. Silicon Valley continues to succeed because of the low barriers to move from company to company, which creates a high velocity of ideas and best practices.
It’s not about technical talent, it’s about business talent in every discipline but engineering.
Marc Nathan
Director of Entrepreneur Development
Houston Technology Center
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4 Managers, not Engineers is what Houston needs « Startup Houston // Aug 2, 2009 at 12:43 pm
[...] not Engineers is what Houston needs Aziz Gilani of DFJMercury writes on his personal blog http://texvc.com/2009/08/02/what-houston-really-needs/about what he thinks Houston needs to compete and the main conclusion he comes up with is that we [...]
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