Accenture Innovation in Houston Final Report-VF3

INNOVATION
IN HOUSTON:
A STUDY OF THE BAYOU
CITYS STARTUP ECOSYSTEM
ACCENTURE & THE GREATER
HOUSTON PARTNERSHIP
MARCH 2017
WHAT WELL
COVER:
1. OUR PROJECT & WHY IT MATTERS
2. HOUSTONS STARTUP ECOSYSTEM TODAY
3. RECOMMENDATIONS & ROADMAP
2
HOUSTON HAS A THRIVING INNOVATION ECONOMY,
BUT POTENTIAL IS LIMITED BY ABSENCE OF A
FLOURISHING STARTUP ECOSYSTEM
Level of maturity & trend in different areas of Houstons innovation economy:
CORPORATE STARTUP ACADEMIC / BASE R&D ARTS
Low High
Thriving corporate innovation Under-indexed in high-growth, Up-and-coming environment Excellent creative and cultural
scene high-impact startup innovation, for R&D-driven physical and institutions
particularly in tech life sciences innovation
Under-indexed in startup activity Abundant R&D investment at Culinary capital of the south; top
Abundant corporate innovation
by most measures; not seen as Universities and research ranked food city by lifestyle media
through internal R&D
top destination for entrepreneurs institutions, ranking 3rd nationally outlets
Excellent corporate collaboration, on the national stage
Cutting-edge aerospace R&D at Thriving arts scene; prestigious
e.g. between Oil & Gas and Oilfield
No natural center of gravity for NASA Johnson Space Center performing and visual arts
services companies, etc.
tech startups institutions, including Houston
Increasing commercialization of Museum of Fine Arts, Houston
Strong concentration in a few
Represents sizable impact in local intellectual property at the TMC Symphony Orchestra, Houston
industries, however; under-indexed
wealth creation and significant and UH Grand Opera, The Alley Theatre,
in hi-tech corporate presence
potential for economic growth and Houston Ballet
STUDY FOCUS
Copyright 2017 Accenture All rights reserved. 3
THE GHP PARTNERED WITH ACCENTURE TO CREATE A
STRATEGIC PLAN FOR HOUSTON TO BE AND BE SEEN
AS AN INNOVATION CITY AT A WORLD-CLASS LEVEL
SCOPE:
WHO: WHAT: WHY:
What can Houstons startups, high-growth, high- deliver disproportionate
investors, government, impact companies to impacts to the local economy in
corporations, and academia terms of direct and indirect job
Houston has plenty of academic & corporate
do collaboratively to encourage innovation, but minimal startup activity and wealth creation and more?
development of
EFFORT:
Assessed and understood Houstons innovation ecosystem
Identified opportunities to accelerate development of Houstons innovation economy
Identified opportunities to improve Houstons reputation as an innovation hub
Synthesized findings in a strategic plan with actionable recommendations to bolster the citys innovation
economy and reputation in the short and long term

WHY HIGH-GROWTH, HIGH-IMPACT STARTUP
INNOVATION MATTERS
ATTRACT & RETAIN LOCAL JOB LOCAL WEALTH CORPORATE
YOUNG TALENT1 CREATION2 CREATION3 RELOCATION7
Educated Millennials make up Startup ecosystem now 17th Twitters IPO created 1,600 GE relocates to Boston for
over 7% local population in largest employer in San millionaires & a CA state software talent and innovation
only 4 cities: SF, Boston, Antonio & former startup tax windfall of $479mm Schlumberger establishes Tech
Austin, & DC (Houston @ Rackspace employs 3,300 Innovation Center in Menlo Park
4%) locals (5th largest)
ACCESS TO LATEST ECONOMIC HOUSTONS IMAGE4 INDIRECT

TECHNOLOGIES4 RESILIENCY5,6 EMPLOYMENT8
A large part of why we invest is More than 100,000 energy workers Most people have really low The Multiplier Effect: for each
FOMO. We want early access in Texas have lost their jobs expectations of Houston and new high-tech job in a city,
to the latest developments in since 2014
are pleasantly surprised after five additional jobs are
tech. Houston Corporate VC 1/3 Houstons GDP, 20% salary coming here. ultimately created
income, & 10% employment
directly in energy sector
Source: 1) US Census Bureau, 2) Geekdom San Antonio, 3)

PrivCo, 4) Accenture interviews & analysis, 5) Greater Houston
REASON MATTERS TO: Corporations Community Universities Policy makers Partnership, 6) Houston Chronicle, 7) Company Press
Releases, 8) The New Geography of Jobs, Enrico Moretti

WE DEVELOPED A STRONG UNDERSTANDING OF
HOUSTONS ECOSYSTEM TO BEST IDENTIFY OUR
CHALLENGES AND OPPORTUNITIES
VISITED HOUSTON
INTERVIEWED 50+ STAKEHOLDERS
INNOVATION ASSETS
Founders: 20 interviews with local founders
First-hand study of local startup
Policy makers: GHP Innovation Roundtable, City of
innovation assets:
Houston Innovation Taskforce
Venture Capital: Angel, Corporate, and private firms
Research Institutions: Rice, UH, TMC
Corporate Leaders: C-suite of local F500
STUDIED OTHER INNOVATION HUBS COLLECTED & RESEARCHED DATA

Data collection: Target talent population survey,
Interviews with venture capital, accelerator,
founders survey, potential initiative poll
and policy leaders in several ecosystems:
Chicago, Cincinnati, Detroit Extensive review of existing data and research
on Houston and other cities: NSF,
Field trips to startup assets in other ecosystems
NVCA, AngelList, Mattermark, Houston Business
Secondary study of best practices Journal, CB Insights, company data, and more

INCLUDING INTERVIEWING
OVER 50 STAKEHOLDERS
Arielle Carpenter TMCX Blair Garrou Mercury Fund PAIN POINTS EXPRESSED BY LOCAL ENTREPRENEURS
Joe Alapat Entrepreneur Jon Nordby GHP % Founder interviewees mentioning hurdle to development of Houston startups
John Kennedy Entrepreneur Gina Luna GHP
Alex Izaguirre TMCX Barbara Burger Chevron
Terrance Kopp TMCX Joe Martin HBJ "I'm based in Houston. I got
Chris Rizik Renaissance John Reale Station
Access to funding 57% money from the Chilean
Kirk Coburn TechStars R. Shirvanloo Entrepreneur government. I got money
Carolyn Rodz Circular Board D. Shirvanloo Entrepreneur Talent availability 50% from a German company.
Angela Shah Xconomy M. Maldonado HTC
But I couldn't get any money
Sense of community / in Houston."
Kevin Willer 1871 Adam Lasics GE Ventures
Accessibility
36%
Derek Mathieson Baker Hughes Josephine Tran Entrepreneur
Knowledge gap /
Carl Stjernfeldt Shell Sarma Velamuri Entrepreneur 36% There is such a cultural
Startup resources
Ken Jones UH Ed Egan Rice difference. Engineers in San
Erik Ibarra Entrepreneur Keith Kreuer RedHouse Density / Francisco move so much
Lack of collision opp.
21%
Donovan Evans Entrepreneur Doug Erwin RedHouse faster.
Jeff Shellebarger Chevron Sathvik Vasam Entrepreneur
Bernard Harris Vesalius Matt Harkrider Alert Logic
Market access 21%
You dont get a network
Vicki Hollub Occidental Elizabeth Killinger NRG effect here. The ecosystem
Devin Baptiste Entrepreneur Patrick Henshaw Cintrifuse Regulatory barriers 21%
exists in silos.
Chris Shiver Entrepreneur Jeff Reichman January Advisors
Support infrastructure
Joaquin Entrepreneur Mark Potter HPE
(I&A*, Mentorship, etc.)
21%
Altenberg Erik Halvorsen TMCX
Rakesh Agrawal SnapStream
Theres no single
No Houston vision 14% destination for
entrepreneurs to go.
Source: Accenture interviews
* I&A = incubators & accelerators
OUR FRAMEWORK:
FOUR CORE DRIVERS OF THE INNOVATION ECONOMY
Innovation is driven by talent, bringing that talent together, and providing the right resources to create an impact.
Our analysis develops actionable recommendations for each element of a successful innovation economy.
IE
INNOVATION
= T
TALENT
x C
COLLISIONS
x R
RESOURCES PER
x I
HOUSTON IMPACT
ECONOMY PER TALENT COLLISION PER RESOURCE
Skillset STEAM skills, Density of talent Capital VC funding and Attracting startups and
particularly in tech Community of startups Angel investment entrepreneurs
Mindset interest in Corporate Intellectual properties Retaining successful
working at startups collaboration sharing patents, tech licenses companies
Diversity Startup problem sets and more Accelerators, Incubators Marketing Houston as
opportunity for all Academic and other services innovative
collaboration via tech Corporate engagement for
transfer funding, testing, and
procurement
Mentorship startup and
industry experience
WHAT WELL
COVER:
9
HOUSTONS STARTUP ECOSYSTEM:
BY THE NUMBERS
Houston is the 4th largest US city but ~20th largest startup ecosystem by many measures
n National rank where applicable
23
20 24
29
Total VC deals, 20157 University Entrepreneurship Program Rankings1 Total funding of
companies received
#1 #4 current startups4
18
VC funding in 20157
$1.3b
21 in seed,
early & late
stage Seed, early and
19
startups Annual avg. VC investment7 late stage startups7
$238mm
20th
Growth in # companies Overall US Ecosystem Ranking6
receiving VC funding7
$323
$415
0% 2010 -
2015 (of 25)
40
$135 $155 $161
Other investment Top industries for innovation
2011 2015
Seed, early and late
stage startups Startup social
103 current Life
($128mm annual avg.) events/mo.2 Energy
startup job Sciences
41 140
Tier 1 Venture Investment Firms3, openings
1
Houston Startup Group Members
Exits,
2014 - 20164
Total est. active
high-growth startups4
$75,000
avg. salary5 4,989
1 Princeton Review, 2 Startup Digest; 3 Houston Business Journal, >$100mm AUM HQ in Houston; 4 CB Insights; 5 AngelList; 6 1776; 7 PWC/NVCA MoneyTree
other VC firms with >$100mm AUM with a presence in Houston include: Essex Woodlands Health Ventures, Texas Atlantic Capital, S3 Ventures, Sant Ventures

HOUSTONS STARTUP ECOSYSTEM:
ACTIVE FUNDING BY SECTOR
Tech is the largest sector with 1/3 funding, closely followed by Healthcare & Energy
Total active
investment:
~$1.3B
Total est.
companies:
140
Source: CB Insights,
Accenture Analysis
Scope: Houston-based
companies that are: active,
private, raised
venture/angel financing,
not exited through IPO or
M&A
* Energy & Utilities startup
activity focused in
renewables & O&G-tech

HOUSTONS STARTUP ECOSYSTEM: EXITS
41 exits in the last 3 years, including 2 IPOs
2014 2016 STARTUP EXIT COUNT
STARTUP M&A
17
BY INDUSTRY Chicago 128
Blinds.com
Mezeo Software Austin 108
Internet 4
WMS iSymphony
Houston 41
Zytax
Acorn Systems
Encore Health Resources 11 11
FuelQuest America First Brown-technical-media
Intelligent Vision Systems CDB Software EQD
Software 8
ION Geophysical CultureMap Ingenious
Lighthouse document solutions
6
Deposition solutions Kiersted
Paradigm EarthIntegrate
8 Medic-CE
Performix Strongroom Meshify
eCardio Diagnostics PLXPharma
Advanced Reliability Technologies
Healthcare 2 Visualase 2 sympler
Presensoft
iDera 1 Cyberonics 1 Soteica
Other 3 R1Soft AnotherRound Apps 1 Instratek
2 Video Insight
SalesMetrix 1 EVGo
2014 2015 2016
The first Houston biotech to make Raising 33 percent more money

IPOs it to the Nasdaq in nearly 15 years than originally anticipated
$124.95mm $9.24mm
Copyright 2017 Accenture All rights reserved. Source: CB Insights, Built in Chicago/Austin, Accenture Analysis 12
TALENT: STRONG TALENT POOL,
CONDITIONED TO CORPORATE WORK T C R I
STRENGTHS OPPORTUNITIES
LARGE SUPPLY OF YOUNG, TECH TALENT HIGHLY SKILLED HOUSTONIANS PRECLUDED RISK-AVERSION TOWARDS TECH
& STRONG UNIVERSITY SYSTEMS FROM PARTICIPATING IN STARTUPS STARTUPS PERMEATES LOCAL CULTURE
300,000 240,000 ~100k

High opportunity cost & lack of historical
inspiration deters tech risk taking
skilled 1983 1988 2001 2017

educated STEM immigrants on
Millennials workers work visas who
cant work at
(#9 in US) (#3 in US) startups IPO IPO Bankruptcy filing
5 ranked national universities H-1B visas are costly in

time and effort, require
Houston 18+ Population by
Immigration Status, 2015 Tech startups offer stark contrast to
status quo for many skilled Houstonians
Ways of working: F500 vs. Startups
employer sponsorship,
& graduate schools and issuance is tightly 16%
2%
F500 STARTUP
controlled
11% FTE span of control Single app Full stack
Foreign workers are thus 71% Work hours 95 A lot
obligated to stay with (a Dev. methodology Waterfall Lean / Agile
#194 #74 #15
typically large, corporate) Crown jewels BU / Sales Developers
Top local rank sponsoring employers or
face deportation Native Foreign: Risk appetite Minimal to none High
22,000 annual graduates 12,000 FT grad students Not Citizen
Hierarchy Rigid Minimal
Foreign: Foreign:
Naturalized Not Citizen, H-1B
Source: US Census Bureau, Bureau of Labor Statistics,

Copyright 2017 Accenture All rights reserved. US News & World Report, Accenture interviews & analysis 13
COLLISIONS: MOMENTUM IN POCKETS
THAT NEED TO BE STITCHED TOGETHER T C R I
THE LAUNCH OF STATION HOUSTON AND LOW DENSITY AND HAPHAZARD INDUSTRY NOT HELPING CREATE
TMCX CREATING MOMENTUM & BUILDING NETWORK CURATION LIMITS POTENTIAL OPPORTUNITIES FOR COLLISIONS
DENSITY
CITY WEBSITE NEWS JOBS CALENDAR
HOU
We dont share problem sets. Its just
NYC
not something people do in this industry.
CHI - Houston O&G exec
LA
Occupancy doubled 50% increase in number CINCY
in 2 months of companies hosted in 2Y
There is no existential crisis gripping
25 34 year olds with college degree per sq. mi boardrooms, forcing us to embrace
Plenty of recent seminars and social events
creating opportunity to spark innovation
Raleigh 219 change and look elsewhere for
SF 208
Startup event count, last 3 months Baltimore 161 innovation.
Boston 159 - Houston O&G exec
Full & Multi-Day Austin 101
Non-full Day Events Cincinnati 86
Events Detroit 84
147 Pittsburgh 84
133 15 LA 72
117 120 Seattle
Nashville 62
71
#5
total 25-34yos Our companies are so spread out and
Opportunity Chicago 59
total 25-34yos with a tight-hole informationThere are a ton of
8 NYC
Portland
56
56
#9 degree independent and mid-tier firms in town
6 Denver 51
4 Atlanta 43 density of 25-34yos that arent active in the community at
SLC
Houston
41
38
#24 with a degree all. - I&A Director
Dallas 35
HOU NYC Austin SV HOU NYC Austin SV Phoenix 19
Copyright 2017 Accenture All rights reserved. Source: US Census Bureau, Startup Digest, Accenture interviews & analysis 14
RESOURCES: LOCAL INDUSTRY DOMINATES
LOCAL CAPITAL, CHALLENGES STARTUPS T C R I
INVESTED CAPITAL GOES 40 - 50% FUNDAMENTAL INDUSTRY LOCAL CAPITAL NOT VENTURE-
FURTHER IN HOUSTON VS. SAN FRANCISCO CHARACTERISTICS PRESENT BARRIERS EXPERIENCED AND GRAVITATES
TO LOCAL B2B STARTUPS TO PE OPPORTUNITIES
$500 A $500k investment will cover a 5 TRL2 Energy Life Science
FTE team in Houston for ~13 tech: tech: AUM of Largest Houston-Area
Funds Remaining ($k
commercialization
10-20Y 5-10Y
$400
months vs. ~9 in SF driven by period: investment Firms3
$300 labor & office space cost VC

Money follows local
USD)
disparity
industry:
$200 Est. spend on O&G Firm: 230
~75%
$100
San Francisco Houston
internal R&D vs.
startup innovation
10:1 (1%)
Chicago
$0
0 1 2 3 4 5 6 7 8
Month
9 10 11 12 13 14
Houston industries are capital intensive,
29,302
specializing in
setting high barriers for startup offspring:
(99%) energy
Houston is rich in academic Representative development costs ($mm)
R&D IP, especially in Healthcare
PE
investments
Top US cities by academic research funding ($B) 2015 1 $1,000 Energy, Healthcare,
& Aerospace
Baltimore, MD $2.8
$300 SaaS
All the risk takers in Houston
New York, NY $2.7 work for PE backed firms. Do a
Houston, TX $2.1 $100 midstream play, get your carry,
Cambridge, MA $1.9
Los Angeles, CA $1.7 $8 $2 and cash out.
- Houston investor
New drug SpaceX 1Y Onshore Airbnb MVP* Alert Logic
85% of the academic research funding goes to TMC Falcon 9 Rig Capital MVP*
Rocket Program
Source: Crunchbase, Company websites, Houston Business Journal, Accenture

Copyright 2017 Accenture All rights reserved. interviews & analysis. 1 NSF 2 TRL: Technology Readiness Lifecycle; 3 HBJ 15
List of Firms with >$100mm assets under management (AUM) * Using pre-B
round funding as proxy for SaaS MVP development cost
RESOURCES DEEP DIVE: CAPITAL FLOWS IN
HOUSTON, A DUTCH DISEASE CASE STUDY T C R I
The pull on local capital towards Energy PE companies is so strong, startups struggle to attract attention
and funds. Diverting market-seeking capital to the venture ecosystem is critical to community health.
1
LOCAL CAPITAL
GRAVITATES TO PE AT
THE EXPENSE OF THE
99% "Capital in Houston is structured
to go after a completely different
local AUM*
VENTURE ECOSYSTEM
asset profile - lower risk, lower
return."
2
- Houston founder
ECOSYSTEM CAPITAL DILUTED
WITH NO/LOW-RETURN SEEKING
INVESTMENTS
Compromises ecosystem competitiveness

Non- Crowds out VCs
institutional Diverts capital away from startups
Not actively managed; doesnt hold portfolio investments accountable
Return-seeking
spectrum
1% Corporate and other quasi-venture groups blend return-seeking
Corporate
Ventures with other objectives
local AUM*
Source: CB Insights, Houston Business Journal, Baker

Institute, Accenture Interviews & analysis Champions high-growth, high-impact companies
* of private capital invested with Houston area firms with Drives quality into the ecosystem
>$100mm assets under management (AUM)
Venture Actively managed; holds investments accountable
Capital Comes with mentoring/access needed to make startups successful
IMPACT: GROWTH AND RETENTION
OF STARTUPS & F500 AT RISK T C R I
YOULL FIND EXISTING, REMARKABLE MANY STARTUPS WITH MOMENTUM STAGNANT STARTUP ACTIVITY STARTING
HOUSTON SUCCESS STORIES IF YOU LEAVING FOR TALENT AND TO BE TO IMPACT HOUSTONS ECONOMIC CORE
LOOK IN THE RIGHT PLACES CLOSER TO INVESTORS
TBD17: MedDevice startup relocating to Silicon Schlumberger opens Software
Valley for C-level talent
Technology Innovation Center in
$317M 670 Employees Oct16: CarForce to move operations to San Silicon Valley
Francisco to join Launch Incubator program
Equity
funding >$100M 2014: Autonomous Marine Systems moves to
Boston for talent and labs space not available in GE moves its corporate headquarters
raised Houston to Boston, citing ambition to gain
Annual revenue
innovation and technology edge
Sept13: RunTitle moves HQ from Houston to
Austin for talent and institutional investor
Houston is home to second-most F500 companies
Etc. in the US, but hosts no hi-tech F500 firms
Developing vaccines and Hi-tech F500 firm HQ count by city
immunotherapeutic 15
approaches to treat cancer $140M Ive had 3 conversations with
Equity Houston companies in the past
IPO funding
month thinking about moving to
2 2 2
November, 2014 Austin. - Houston entrepreneur / mentor 0
SV LA Chicago Boston Houston
Source: Surge / Kirk Coburn, Fortune, Crunchbase, LinkedIn, Company

Copyright 2017 Accenture All rights reserved. websites, Accenture interviews & analysis 17
PATHWAYS TO SUCCESS:
A REVIEW OF GLOBAL INNOVATION HUBS
PATHS FACTORS
SUCCESS
STRUCTURAL STRENGTH PROACTIVE EFFORTS
ANCHORS COOL PLACES METROPOLITAN PIVOTING INDUSTRIAL CITIES

MATURITY
Advantageo Natural Acceleration Less Slowly Booms Citys Policies Accelerates Decent Corporate Momentum
us starting growth thanks to inherent attracting thanks to inherent kick off as starting point, and civic thanks to
point due to first mover academic & people lower cost of strength rapid ecosystem slow decline involvement coordinated
high levels of advantage industrial starting leads to high growth grows and looming reverse effort; more
R&D strength than company, starting crisis trend corporate
anchors particularly point, buy-in after
in tech although not seeing
Fund-of-funds
yet a focus Setup Strategy Office
returns
Anchor coworking space
Startup tax incentives

Setup Strategy Office
Govt direct investment
Time
CHARACTERISTICS
Anchored with major academic, Predominantly attract talent International hubs Strong base in a few key
research institutions, or major through art, music, natural Capital rich industries
tech companies beauty and lifestyle Existential threat and need to
Diverse economic base
Early advantages Risk-tolerant culture diversify
Eccentric and inclusive
EXAMPLES
Bay Area, Boston, Bangalore Berlin, Portland, Denver NYC, Chicago, London Detroit, Cincinnati
BEST LEARNING OPPORTUNITIES FOR HOUSTON

WHAT WELL
COVER:
19
40 POTENTIAL ACTIONS ADDRESSING OUR
STRENGTHS AND WEAKNESSES WERE EVALUATED
FOR IMPACT AND EFFORT/FEASIBILITY
Impact
POTENTIAL ACTION 30 14 Talent

# PROPOSED ACTION # PROPOSED ACTION
13
EVALUATION Collision 1 BHAG/Thematic Focus 21 Startup investor & F500 speed dating
Resources
2 Recruit star professors 22 Open strategy office
22 32 2 Impact
HIGH
28 3 Innovation output in tenure review 23 Ecosystem website

4 Be open testing ground for new tech 24 Ecosystem news
5 Startup externships 25 Ecosystem job board
4 6 Founder visa program 26 Host Innovation conference

1 39
16 7 Corporate EIR program 27 Channel partners pitch program
23 6
37
19
MEDIUM
8 Int'l startup exchange program 28 UHNW Champion

27 31
9 Corporate talent matchmaking 29 Angel education
12 17
15 10 Nights and weekends co-working program 30 Minimize non-market capital
29
11 Startup space @ NASA / Starburst chapter 31 Freemium co-working space model
9 33 11
21 12 Tech education for the underprivileged 32 Fund-of-funds
40 38
13 Recruit Hi-tech anchor firm (e.g. Amazon) 33 Local evaluation clause to state VC invest.
8 14 Recruit Life science anchor company 34 Marketing blitz

15 Recruit /expand Fed research institutions 35 SEO campaign
36 16 NASA ecosystem participation

10
LOW
36 Houston startups on TV shows

26 17 Innovation district(s)
25 37 Diversity Campaign
5 35 20 18 Make innovation district green 38 Easy-access city procurement
24 18
19 Metro to innovation district 39 Matching govt investments
3
7 20 Lifestyle conferences (culinary, gaming) 40 City-wide civic hackathon
Timeframe
SHORT MEDIUM LONG
PRIORITIZED ACTIONS ROLLED INTO 10 KEY
INITIATIVES ADDRESSING TOP PAIN POINTS AND
DELIVERING SHORT, MEDIUM AND LONG-TERM VALUE
TIME TO LEAD
TOP PAIN POINTS RECOMMENDED INITIATIVE IMPACT
EXECUTE ACTORS
Houston needs focus critical mass in specific areas

1 and a rallying cry for entrepreneurs
Develop Thematic Focus areas for local ventures S Academia
2 Low density of operationalized tech talent Recruit Anchor Hi-tech firm and/or federal research institutions M City Govt
3 Large number of highly skilled Houstonians on

Create Founder Visa program M Academia
work visas precluded for startup community
4 Houston not perceived as embracing startup culture Send values signal thru policy embracing new tech and becoming the
M City Govt
and values Testing Ground for cutting edge innovation
5 Haphazard community network inhibits collision

Open Strategy Office with personnel dedicated to community building S GHP
opportunities
6 Talent & startup density is low Create Innovation Districts around Tech & Life Sciences L I&A
7 Local capital isnt venture-experienced Create Fund-of-funds (absorbing non-market capital) M GHP
8 Local capital isnt venture-interested

Activate UHNW Champion to educate, social proof startup investing,
M Investors
and help with fundraising
Houstons image to the global startup community Multi-channel Marketing Campaign featuring the most diverse city in
9 is antiquated the US (inc. conferences)
S GHP
City govt should embrace startups through opening procurement,

10 City govt could do more to embrace startups
hosting civic hackathons, and more
M City Govt
TCRI Copyright 2017 Accenture All rights reserved.

UHNW = Ultra-high net worth; I&A = Incubators & Accelerators (inc. co-working infrastructure)
Time to execute: S = short-term, M = medium-tern, L = long-term 21
WHAT WILL HOUSTON BE FAMOUS FOR? 1 DEEP DIVE
ECOSYSTEM DEVELOPMENT EFFORTS
SHOULD FOCUS ON BUILDING CRITICAL
MASS IN A FEW KEY AREAS
INDUSTRIAL IOT ROBOTICS CYBERSECURITY
8% Annual market IIOT Startup Global industrial Robotics Startup Cybersecurity market2 Cybersecurity
170
growth2 robotics market3,4 Funding ($B)1 Startup Funding
APPLICATIONS Funding ($B)1
$40B in 2020
B in ($B)1
ACROSS Total industrial IOT +32% $2.1 +45% $1.2 $ 2020 +24% $3.6
LOCAL
$150B
market in $1.5
@10%
$0.7 $0.3 annual
INDUSTRIES: 20202
2012 2016
Units installed
increase per year 13% 2012 2016
growth
2012 2016
ENERGY Digital oilfield & Smart grids Deepwater & remote operations Plant asset security systems
LIFE SCIENCE Telemedicine & wearables Assisted surgery Patient health information security
AEROSPACE Asset tracking & intelligent cabins Robotic manufacturing Blockchain maintenance
TRANSPORTATION Connected car Autonomous vehicles & drones Fleet control assurance
EXISTING APPLICATION ACROSS HIGH

SOURCE:
ADVANTAGE IN
TALENT BASE
LOCAL INDUSTRY GROWTH PHYSICAL PROXIMITY
1) CB Insights;
2) Markets and Markets;
3) Radiant Insights;
4) International Federation
of Robotics
THEMATIC FOCUS AREA DEEP DIVE: 1 DEEP DIVE
INDUSTRIAL INTERNET OF THINGS (IIOT)
Driving down cost through internet-enabled assets in industrial operations, and generating new
revenue streams through connected customer data; relevant Houston industry examples include:
CASE STUDY
MANUFACTURING Smart Grid example
Detect the movement of containers when they ship; deploy
& SUPPLY CHAIN manufacturing and warehousing robots (also see Robotics) Collect massive amounts
of data about
91%
Create sensor networks for monitoring oil and gas extraction consumption, voltage, the
ENERGY, OIL & GAS health of infrastructure,
and spills
etc.
of companies
TRANSPORTATION Use telematics data from large trucks for fleet-tracking; use actively using Enables big data analysis
& FLEET connected hardware to prorate insurance by mileage or expecting to on supply, demand, real-
deploy IoT time monitoring and
technology predictive maintenance
Monitor engineering assets; optimize flight and the customer
AEROSPACE within the next
experience through data capture and analysis
two years
CLOUD PLATFORM Platform-as-a-service (PaaS) companies allow other IoT and

SERVICES IIoT companies to manage and maintain their device networks
WHY HOUSTON? TOP ECOSYSTEMS

Industry demand: top 4 industries in IoT investment in 2016 perfectly match dominant industries in Boston: anchored by Harvard, MIT; strong presence in predictive analysis
Houston: manufacturing, transportation & distribution, energy & mining, and healthcare
Seattle: anchored by Microsoft and Amazon
Physical proximity: to customer assets is crucial for sales opportunities, piloting, and strategic
partnerships Chicago: leveraging legacy industrial strength, hosts Industrial IoT Annual
Conference; home to a number of connected health and smart grid companies
Venture interest: more than 5x venture investment growth in IIOT from 2011 to 2016
Local talent: high density of engineering talent already familiar with the industrial environment
Existing startup success: Meshify, Ambyint, Arrundo, Maana
Copyright 2017 Accenture All rights reserved. Sources: IOT Analytics, TechRepublic, CB Insights 23
ROBOTICS
Lower cost of components and sensors, better robotic manipulation and advancement in deep learning
created a fundamental paradigm shift that is prolific in its impact on industrial robotics opportunities
CASE STUDY
Liquid Robotics (Sunnyvale,
BETTER PERCEIVING AI drives improvement in machine vision, force
18%
CA)
sensing, and speech recognition to assist
AND LEARNING Maker of unmanned surface
manufacturing, warehousing, inventory management,
CAPABILITIES and surveillance robot for real-time ocean
annual increase data collection and
BETTER Kiva robots spread across Amazon warehouses, in VC deal flow, communications over long
COMMUNICATION & communicate among themselves, warehouses & 2016 durations
COLLABORATION humans Formed a four-year joint
BETWEEN Surgeons translate their movements into smaller, HEAVY venture to develop services
HUMANS & MACHINES precise movements using surgical robots. INDUSTRY & for the oil and gas industry
COMMERCIALIZATION manufacturing with leading Oilfield Services
OF HARDWARE Emergence of high quality, low cost sensors, is the largest Corporation
electronics, and communications enables sector for VC
MATERIAL & Recently acquired by Boeing
entrepreneurs to explore new applications investment
COMPUTATIONAL Lower cost of computational power & cloud computing
POWER

Proximity to research institutions: NASA and TMC offer fantastic research and testing space for robotic Silicon Valley: existing density of robotics startups and community
innovation
Boston: robotics ecosystem sprung up around MIT; success stories such as
Proximity to demand: UAV for pipeline surveillance, ocean & subsea robots, demand for local industries Boston Dynamics and Rethink Robotics; newly opened robotics themed
to continue to cope with new technological trends coworking space MassRobotics in Seaport Innovation District
Presence of established companies: TechnipFMC, for example Pittsburgh: #1 academic robotics program in the world at CMU; home of
Local talent: high density of engineering talent already familiar with industrial environment Uber Advanced Technologies Group; many high profile robotics startups
receiving funding
Competition Host: Houston to host the largest student robotics competition, FIRST Championship, from
2017 to 2019
Sources: Gartner, svrobo, VentureBeat, LiquidRobotics, OilGasMonitor,
Copyright 2017 Accenture All rights reserved. robotics.org, Techcrunch, CB Insights 24
CYBERSECURITY
Market grew from $3.5bn in 2004 to $75bn in 2015; estimated to reach $170bn in 2020 with significant
growth coming from the IT OT convergence:
CASE STUDY
Less secure, but Houstons
Infrastructure is increasingly fusing Bowman Avenue Dam Hack
increasingly integrated opportunity
IT OT
Operational Technology (OT) with Through the cable modem,
enterprise IT; OT networks (PLC/DCS,
CONVERGENCE SCADA) does not have the maturity of
OT the hacker was able to gain
control of the systems
integrated security controls Sensors
operations
Controllers
Could have led to a flood
Increase in connecting these OT
Machinery
IT/OT that would have impacted
IIOT DEVELOPMENT environments to the external Internet, which nearly 200 residents homes
Convergence
is often less secure IT Same attack technique can
ERP be applied to power plants
Logistics and refineries
CENTRALIZED Data centralization for expanding BI and Data
DATA COLLECTION data science analysis creates a real threat
FOR BI of network penetration and data theft Traditional cybersecurity focus, higher
maturity, although still often under threat

Physical proximity: to demand from local O&G, utilities companies; proximity is #1 key factor for CIO Silicon Valley: tech giants as well as startups
and CISO to consider in selecting a vendor
Tel Aviv: cyber-security synergy has formed between startups, multinational
Growing demand: ongoing shortage of security talent and expertise made it difficult for small and tech giants, academia, the military and government
medium sized independent E&P companies to develop internal capability
New York City: demand from the finance industry
Low entry barrier and capital requirement
London: demand from the finance industry, leading Cybersecurity
Local talent: UH was recently ranked as Top 10 Program in Cybersecurity accelerator, with government support
Existing startup success: Alert Logic, Graylog
Sources: Markets & Markets, Rigzone, National Cybersecurity Institute, Bipartisan Policy,
Copyright 2017 Accenture All rights reserved. CyberSecurity VenturesStudy.com; 1Supervisory Control and Data Acquisition system 25
THEMATIC FOCUS AREAS 1 TALENT
Develop reputation for and critical mass in Robotics, Industrial Internet of Things (IIoT), and The Brandery (Cincinnati)
Cybersecurity in a few different ways: #12 nationally ranked
accelerator
PUBLICITY Publicize Houston success stories in thematic focus areas, such as KEY Specializing in consumer
Meshify (IIoT) and Alert Logic (Cybersecurity) OUTCOMES: branding, marketing, &
design
PANEL & Host regular thematic discussion panels featuring corporate
Ecosystem 50+ graduates
MENTOR practitioners as well as local startups; Cultivate mentorship network
coordination
NETWORK consisting of SMEs in and outside of Houston $120mm capital raised
Providing access to industry
CONFERENCE Host major tech conference focused on Robotics, IIoT, and/or Houston as a
cybersecurity (also included in Initiative No. 9, Refresh Houstons (P&G, Kroger, dunnhumby, &
destination more)
Startup Image)
for top talent
RESEARCH Create buy-in at local universities to develop top tier program in in focus
thematic focus areas by recruiting star professors in the fields and
areas
entrepreneurs in residence (EIR) and finding research sponsors;
NASA continue engaging closely with startup community WHERE ITS WORKED:
TALENT Foster talent pool, especially of data science and machine learning
ATTRACTION practitioners; cutting edge data science is crucial for all three
NYC PITTSBURGH CINCINNATI
thematic focus areas and beyond
TIMELINE Celebrate successes in thematic Host major tech conference focused on Robotics, IIoT, and/or
Develop top tier programs at local universities through
areas such as Alert Logic and professor recruitment blitz
cybersecurity
LED BY: Meshify Fundraising for new academic programs
Cultivate thematic mentorship network
Host regular thematic discussion Establish EIR programs at local universities
Publicize NASAs work and collaboration with startups in robotics
panels featuring corporate Encourage formation of accelerators and incubators in thematic
practitioners as well as local startups Identify college programs to bolster & professors to recruit
focus areas
ACADEMIA
2017 2018 2019 - 2021 2022 - 2024

ANCHOR HI-TECH FIRM 2 TALENT
Recruit large hi-tech firm or federal research institution to relocate or open an office in Houston proper Boulder Laboratories
to create density and a quality tech talent source for the ecosystem 2,000 employees, mostly
researchers
ATTRACTION Institutions that attract top talent and operationalize them KEY OUTCOMES: Home to: NIST, NOAA, &
through full stack training or exposure and a startup-friendly
NTIA
culture (e.g. Google, Amazon, Facebook)
Density of local Research covering:
INCENTIVES Use 312/313 tax abatement policies, partnership with talent electromagnetics, physics,
academic programs, or other incentives to encourage material science, & more
relocation or new office opening Houstons image
Home of F1 atomic clock
as an innovative responsible for the official US
Align with efforts to develop thematic focus areas recruiting city
FOCUSED time
firms with competencies or interest in IIoT, Robotics, and/or
cybersecurity
DISTRICT Specifically, encourage location in one of the innovation

districts to bolster efforts to create density and collisions and WHERE ITS WORKED:
improve quality of life for firm employees; this could include
opening a NASA or HPE office in one of the proposed districts
BOULDER SEATTLE
TIMELINE
Identify short-list of target firms aligned with thematic focus areas;
understand their needs Road trip to recruit target firms
LED BY: Appeal directly to Federal Govt for
Put together incentive package and proposal Dedicate Startup Strategy Office personnel to support (re)location of federal labs
Set aside space for potential anchor firm in District planning (see responses to RFP/RFIs from tech firms received by GHP
Innovation District timeline)
GOVT
2017 2018 2019 - 2021 2022 - 2024

FOUNDER VISA PROGRAM 3 TALENT
Improve access to Houstons startup ecosystem for the citys ~100k skilled non-citizens on H1B with Global Entrepreneur in
services that help new entrepreneurs overcome the current visa obstacles Residence Program (Mass.)
3 affiliated universities
LEGAL Easy access to affordable immigration legal services that KEY OUTCOMES: 20 entrepreneurs sponsored
SERVICES help aspiring local entrepreneurs navigate the dynamic
in 2 years
visa regulations, including potential new federal Startup
Ecosystem 100% application success
Parole program
accessibility rate
SPONSORSHIP Partnering founders with participating universities - exempt
Houstons image
261 jobs created
from H1B lotteries and able to offer rolling admission - for
as an innovative $119mm private investment
visa sponsorship; in return, visa recipients can work part-
time at the school, offer student mentorship/internship raised by companies of
and inclusive city
opportunities, or contribute to research sponsored entrepreneurs
MATCHMAKING The Strategy Office plays the role of matchmaker - vetting

applicants and matching them with local universities
WHERE ITS WORKED:
DIRECT Once a startup has matured, assistance in applying to
directly sponsor the entrepreneurs H1B MASSACHUSETTS NEW YORK
TIMELINE
Stay tuned to the ongoing immigration reform; understand Depending on the status of the immigration reform, set up
LED BY: implications of any new legislations with legal help the University-affiliated program Continue evaluating models to
sponsor founder visas under the
Evaluate university-affiliated H1B sponsorship program and the and / or a Startup Parole info desk with standard legal dynamic policy environment
processes to apply for Startup Parole documents to help startups navigate the program
ACADEMIA
2017 2018 2019 - 2021 2022 - 2024

TESTING GROUND FOR INNOVATION 4 TALENT
Extend Houstons pro-business regulatory environment to cover emerging technologies, encouraging Source: MDOT
startups to use the city as testing grounds and building a reputation for innovation
LICENSING Ease and expedite access to experimental licenses, if needed KEY OUTCOMES:
for piloting new technologies in public or controlled
environments (e.g. autonomous vehicle licenses)
Houstons image
ASSETS Provide access to underutilized public (or privately donated) as an innovative
facilities for testing space city
USER ACCESS Pre-register volunteers as test users for startups to expedite Innovative pilots
planning for end-consumer pilots in Houston
LEGISLATION Proactive review and clarification of existing legislation potentially Barriers to

impacted by new technologies to determine changes needed innovation
while maintaining community safety as priority
Time to pilot WHERE ITS WORKED:
LOBBYING Set up Strategy Office or non-profit arm of Station as a 501(c)(4)
non-profit to be able to engage in lobbying for better regulatory
environment for emerging technologies NEW ZEALAND MICHIGAN
TIMELINE
Announce Citys overall willingness to Develop a clear process of reviewing policy changes that have Create fast-response help desk to clarify regulatory implications
LED BY: support emerging technologies implications on emerging technologies for new technologies within a published time limit
through policy Engage national media to broadcast Houstons image as friendly Open underutilized, public assets and organize volunteer
testing ground for innovation groups for testing
GOVT
2017 2018 2019 - 2021 2022 - 2024

STARTUP ECOSYSTEM STRATEGY OFFICE 5 COLLISIONS
Standup an organization with dedicated resourcing to serve, organize, champion, and grow the local Accelerate St. Louis
startup ecosystem with multiple functions, including: Our mission is to accelerate
the growth of St. Louis
FUNDRAISING Raising capital for Fund-of-funds and startup screening for KEY OUTCOMES: dynamic startup community
introduction to funded VCs by strengthening connectivity,
Barriers to entry securing new capital, and
Improving ecosystem accessibility and reducing hurdles to
PORTAL raising awareness of the
starting a company with online portal and getting started
resources Ecosystem innovation that is happening
organization in the region.
INTEGRATOR Becoming the overarching entity that connects innovation
assets within ecosystem and enhances collaboration Collision
opportunities
MEDIA Bridging the gap between innovation/startup activity in
Houston and media outlets
WHERE ITS WORKED:
CONTENT Curating and organizing content for the local ecosystem,
including: website, calendar, news, and job board
ST. LOUIS PITTSBURGH CINCINNATI
TIMELINE Define mission, functions, and resourcing needs in conjunction Open Office with media coverage
with Mayors taskforce Launch products: startup portal, job board,
LED BY: (See Fund-of-funds timeline - long-term
Recruit, hire, & onboard Strategy Office team calendar, news, matchmaking program
efforts focused on raising capital)
Develop website and office branding Develop relationships to broker innovation stories
GHP Compile startup portal resources to media
GHP
2017 2018 2019 - 2021 2022 - 2024

TECH & LIFE SCIENCES 6 COLLISIONS
INNOVATION DISTRICTS
Creating two districts one around tech and another around life sciences of dense, mixed use space San Antonio Tech District
for talent, startups, and service providers to co-locate 180 tech companies
1,500 IT workers
ALL-IN-ONE Live, work, & play space all densely clustered, including: the KEY OUTCOMES:
strategy office, coworking space, I&A programs, coding 6 x 4 block area in
bootcamps, and hi-tech & life science anchor firms downtown
Density of local
talent Home to: startups, Google,
GREEN Appeal to enviro-awareness of the creative class and make coding academy,
the innovation district green: e.g. bike share, recycling, coworking space,
green space Density of local
accelerator, strategy
startups office, & more
ACCESSIBLE Extend the Metro light rail connecting downtown, Life
Science, and the Tech district
Quality of life
INCLUSIVE Use existing infrastructure to minimize impact to existing

Houstons image
residents, keep costs down, and ensure access for all
as an innovative
city WHERE ITS WORKED:
INCENTIVIZED Use 312/313 property tax abatement policies to minimize
tax burden for innovation ecosystem constituents and
encourage relocation DETROIT AUSTIN ST. LOUIS PHILADELPHIA
TIMELINE Rail construction to connect

Identify target district areas Green space enhancements within districts Innovation Districts to Metro
Purchase available, desired real estate in districts
LED BY: with existing or developing Move anchor tech firm into district Line
Station, HTC, and others to relocate to tech district
cultural scene and quality Offer discounted office space to expanding Further relocation of startups
of life Mobilize 312/313 tax abatements for districts and supporting businesses
startups to encourage location in districts
to Districts
I&A
2017 2018 2019 - 2021 2022 - 2024

CREATE FUND-OF-FUNDS (FOF) 7 RESOURCES
Raise investment fund from corporations and foundations to invest in out-of-town VC funds that US City Syndicate
promise to visit, mentor, and invest in quality, local startups on a best effort basis Fund-of-funds FUND-OF-FUNDS INVESTMENT
2-3 full time employees MODEL ILLUSTRATED
SIZABLE FUND- Houston should aim at raising an initial $100mm+ KEY OUTCOMES: $1-25 mm investment per INVESTOR FUND INDIVIDUAL
OF-FUND fund and subsequent larger funds if successful; both
investor MANAGER VC FUNDS
Detroit and Cincinnati have succeeded in raising
Availability of startup 18-24 mo. from idea to
subsequent funds
STARTUPS
VC funding for good launch
SEED SIDE- Establish a side-car fund, in addition to the FOF, to startups
Separate entity from I&A
CAR FUND coinvest in pre-Series A companies, addressing seed
programs
stage funding shortage, bridging gap to potential FOF
Converting local non-
VC investments
market money into
MARKET Fund-of-fund will be professionally managed by VC professionally managed
DRIVEN practitioners; portfolio funds have the necessary skills fund
and experience in evaluating, vetting and providing
the right connections to help local companies
Collision between
succeed WHERE ITS WORKED:
national VCs and local
LEAN Simpler to establish and less administrative burden startup community
than running a startup competition or government CINCINNATI DETROIT
fund
ROI
TIMELINE Put together fundraising and investment management team First fund-of-funds starts operation, places investment in selected
Engage GHP Board for support of well orchestrated fundraising out-of-town VCs
LED BY:
campaign Establish a side-car fund to coinvest in pre-Series A companies Raise subsequent funds
Fundraise - soliciting corporate and philanthropic support Strategy office start curating local companies to pitch to portfolio
GHP Screen out-of-town VCs for investment funds
GHP
2017 2018 2019 - 2021 2022 - 2024

INITIATIVES ILLUSTRATED: 5 + 7
STRATEGY OFFICE & FUND-OF-FUNDS
Venture capital Fund-of-funds: a widely used investment strategy that invests in a portfolio of different
venture capital funds (rather than direct investment in startup companies)
Investments & Fund-of-funds capital flows (with estimated amounts):

1:10 1:20
$100 - 200 $100 200* investment :
One-time investment FOF VCs capital coming into
$1,000 4,000
Investors $110 - 220
Avg. investment: ecosystem**
$1 25mm
Fund life: 7-10Y & Donors $5 10 Strategy Office $10 - 20 $10 20* Local Startups
annual
Sidecar
Improved access/exposure
DESCRIP- Team dedicated to fundraising
Investment vehicle that places Local fund that co-invests in Out-of-town, mid-size VC
to market-seeking investors capital with VC funds in other early stage startups with funds with proven track record -
TION Mentorship
and ecosystem building
markets angels (pre-FOF) receiving FOF investment
Corporate sponsors
UHNW Individuals Venture investment Venture investment Out-of-town venture capital Houston-based high-growth, high-impact
ENTITIES Philanthropic Foundations
GHP
manager manager firms firms
State/Local Govt
RESOURCE ~10 FTE 2-4 FTE 1-2 FTE - -
Fundraising: for FOF and Invest funds received thru

Manage Fund-of-funds
Strategy Office operations FOF to maximize returns
Invest in FOF & sidecar Place investments in VC Manage sidecar fund
Community Building: Commit to visiting,
FUNCTIONS Support Strategy Office and marketing, business
funds Co-invest in early, local
mentoring, and investing in
-
local I&A on ongoing basis Screen local startups for startups with angel investors
development, help desk, quality, local startups on a
review by invested funds
startup resource creation best effort basis
Investment return
Philanthropic opportunity
Healthy local ecosystem Access to curated collection
Investment diversification
BENEFITS Engaged / invested - - of Houston startups
Healthy local ecosystem corporate community Investment
(e.g. access to talent)
Access to portfolio tech
Estimated investment amounts (in $mm USD): One-time fund investments; Annual donations
Copyright 2017 Accenture All rights reserved. * excl. mgmt. fees; ** based on FOF performance in other ecosystems studied 33
ACTIVATE UHNW CHAMPIONS 8 RESOURCES
To help with fundraising and providing social proof for startup investing J. B. Pritzker and 1871
Grew up in Silicon Valley, FUND-OF-FUNDS INVESTMENT
personally familiar with Tech MODEL ILLUSTRATED
EXISTING Visible UHNW individuals with track record of KEY OUTCOMES: startups INVESTOR FUND INDIVIDUAL
CHAMPIONS supporting entrepreneurship
Gave $1mm to get 1871 off MANAGER VC FUNDS
Availability of the ground in 2012; created
STARTUPS
seed/angel funding own VC fund; willing to make
TRENDSETTERS Individuals active and influential in philanthropic connections and attract
community with reputations for being audacious Support for startup constant media attention for
adventurer and fast learner the ecosystem
community building
organizations
FUNDRAISING Knock on doors, make connections and facilitate the
raising of fund-of-funds Ability to influence
policy choices and
EDUCATING Individuals with personal interest in Angel investing encourage broader
WHERE ITS WORKED:
and are willing to lead by example, spread the word awareness of startup
about Angel investment, and endorse angel ecosystem
education sessions CHICAGO DETROIT
TIMELINE
Host social gala introducing HNW community to local startups
Identify and approach UHNW champions
LED BY: Champions media campaign shining spotlight on local startups and events
Speak at GHPs social events to introduce HNW community to angel investing
endorsing local angel investing
Aid Fund-of-funds fundraising
Dedicate Strategy Office resources to manage Houston group on Angelist and
Sponsor Angel 101 seminars at local I&A coordinate with AngelMD
INVESTORS
2017 2018 2019 - 2021 2022 - 2024

REFRESH HOUSTONS STARTUP IMAGE 9 IMPACT
Branding of Houston as the most diverse city in the US, appealing to the startup community and
creative class
DIVERSITY Shake the energy capital of the world epithet with a KEY OUTCOMES:
focused, singular marketing image around being the most
diverse city in the US
Houstons image GREAT
as an innovative
SEARCH ENGINE Put Houstons best face forward online; Fine-tune
Houstons search results via search engine optimization; city
OPTIMIZATION
Talent looking to relocate now heavily relies on Search for
decision making input Social-proofing
local talent and
TV SHOWS Orchestrate getting Houston startups featured on TV to
more closely associate Houston with Tech in viewers capital towards
minds (e.g. Billion Dollar Buyer, Shark Tank, PBS) participating in #1 Search result: Why does
NOT
startups Houston have such a bad
CONFERENCES Host innovation conference (SXSW-styled) focused on
reputation?
thematic areas Houston is building startup brand around;
Host general creative / lifestyle conferences with
opportunity to appeal to wide audience and influence wider
GREAT
cultural perception of Houston (e.g. art, culinary, gaming,
and art car parade)
TIMELINE Continue Houston: City with no Limits Host innovation conference (SXSW-styled) focused on thematic areas Houston Feature Houston startups on TV to
campaign, with more focus on broadcasting is building startup brand around more closely associate Houston
LED BY: the diversity message Start planning for a general creative / lifestyle conference with appeal to wide with Tech (e.g. Billion Dollar Buyer,
audience to influence cultural perception of Houston (e.g. art, culinary, gaming, Shark Tank, PBS)
Start media campaign: create positive
Host creative / lifestyle conference
GHP
content to feature on target channels, such and art car)
as TechCrunch Publish positive content and start proactively managing search engine results
GHP
2017 2018 2019 - 2021 2022 - 2024

CITY GOVT SHOULD 10 IMPACT
EMBRACE INNOVATION
The government can learn to be better adopters of digital innovation, act like a startup itself, and Philadelphia fastFWD project
lead by example Collaboration between FUND-OF-FUNDS INVESTMENT
Mayors Office, accelerator, MODEL ILLUSTRATED
SHARE Identify pain points in Citys operations; Create page KEY OUTCOMES: UPenn, philanthropic INVESTOR FUND INDIVIDUAL
PROBLEM SETS on City Government website to publish data, problem Foundations, the Impact Hub MANAGER VC FUNDS
sets, and desired projects
Innovative solutions to network and Code for
STARTUPS
Citys problems America
SUPPORT CIVIC Continue supporting City of Houston Hackathon:
HACKATHON provide relevant resources such as venue, publicity 9 pilot projects and 3
Houstons image as an contracts with the City
Streamline and digitize Citys procurement innovative city generated in first cohort;
OPEN
sparked procurement reform
PROCUREMENT applications and certifications; make sure startups
can participate Collision among tech- at the city level
savvy, civic-minded
OPEN TESTING Create program for startups to test their products at
talent
City facilities for free
Startup market access WHERE ITS WORKED:

DIGITIZE Digitize pencil-and-paper processes; improve online
SERVICES portal for digital admin support; open data as raw
material of innovation BOSTON PITTSBURGH PHILADELPHIA
TIMELINE
Continue supporting City of Houston Accelerate digitizing pencil-and-paper processes; improve online portal for Sustain and expand existing programs
digital admin support Organize coding bootcamps and other
LED BY: Hackathon
Create page on City Government website to Streamline and digitize Citys procurement applications; simplify digital literacy training programs
publish data, problem sets, and desired requirements and make sure startups can participate accessible to all
projects Create program for startups to test their products at City facilities for free
GOVT
2017 2018 2019 - 2021 2022 - 2024

INITIATIVE OWNERS: A ROLE FOR EVERYONE
OPEN STRATEGY OFFICE Economic Utilization
GHP
Dev.
RAISE FUND-OF-FUNDS LEAD INNOVATION DISTRICT
EFFORTS
CHOREOGRAPH CITY BRANDING & Houstons
GHP MARKETING CAMPAIGN
image I&A Influence
RECRUIT ANCHOR HI-TECH FIRM

Jobs Talent
SPONSOR & CONTRIBUTE TO:
CREATE TECH-FRIENDLY
INNOVATION DISTRICT, STRATEGY
REGULATORY ENVIRONMENT
Local OFFICE, FUND-OF-FUNDS Tech
CORPORATIONS
GOVT EMBRACE STARTUPS IN CITY HALL Wealth Access
ACTIVATE UHNW AND CORPORATE

Prestige
DEVELOP THEMATIC FOCUS AREAS CHAMPION
ROI
MATURE FOUNDER VISA PROGRAM Tech MANAGE FUND-OF-FUNDS &
ACADEMIA Transfer INVESTORS SIDECAR
Upside for each actor Copyright 2017 Accenture All rights reserved. Initiative ownership; Critical support role of one of the ten initiatives 37
HOUSTON ECOSYSTEM HIGH-LEVEL ROADMAP
FUELING THE ROCKETS STARTING THE ENGINES HOUSTON, WE HAVE A LIFTOFF
2017 2018 2019 ONWARDS
Planning & fundraising: Fund-of- GHP Open Strategy Office Innovation District enhancements:
funds, Strategy office Recruit anchor hi-tech firm green space, Metro Line
connection
Activate high-net-worth champions Setup Founders Visa Program
Launch digital literacy education
Establish ecosystem thematic focus Inaugural Fund-of-fund starts
program
operations
Create top focus area academic
GHP programs through professor & EIR
recruitment
23 startups
receiving VC
funding p.a.
23 startups 30 startups 50 startups

receiving receiving VC receiving funding
VC funding funding p.a. in 2020
p.a. Host innovation
conference
GHP Focus city diversity branding PRIMARY ACTORS AT EACH STAGE:
Launch sidecar fund
City open data & innovation
Relocation of I&A, Corporations Govt
initiative
startups to district
Innovation district planning Academia I&A
Digitize city services,
open procurement
GHP GHP Investors
Signpost (progress indicator)
Copyright 2017 Accenture All rights reserved.
38
INITIATIVE & ACTIVITY SUMMARY: GHP
INVOLVED IN:
2017 2018 2019+
Define mission, functions, and resourcing needs Open Strategy Office

in conjunction with Mayors taskforce Launch products: startup portal, job board,
STRATEGY Recruit, hire, & onboard team
5 calendar, news, matchmaking program Continued Strategy Office operations
OFFICE
Develop website and office branding Develop relationships with media to broker
Compile startup portal resources innovation stories
Put together fundraising and investment Allocate fund-of-funds and sidecar to target fund
FUND-OF-
7 management team managers Raise subsequent funds
FUNDS
Fundraise Curate local companies to pitch to portfolio funds
Host innovation conference focused on Houston

Focus Houston: City with no Limits campaign startup thematic areas Use influence to feature Houston startups
MARKETING branding on diversity
9 Plan for a general creative / lifestyle conference on wide-audience television programs
CAMPAIGN
Participating Leading
Start media campaign: create positive content to

Publish positive content and start proactively Host creative / lifestyle conference
feature on target channels
managing search engine results
Support recruitment road trip to target firms

ANCHOR HI-
2 Support responses to RFP/RFIs from tech firms
TECH FIRM
received by GHP
Provide resourcing to support help desk for

FOUNDER VISA aspiring entrepreneurs
3
PROGRAM
Matchmaking between founders and universities

INITIATIVE & ACTIVITY SUMMARY:
INNOVATION TASKFORCE (GOVT)
INVOLVED IN:
2017 2018 2019+
Identify target firms aligned with thematic focus

areas; understand their needs
ANCHOR HI- Compile incentive package (inc. policy changes)
Recruitment road trip to target firms in Appeal directly to Federal Govt for
2
TECH FIRM and proposal
collaboration with the GHP (re)location of federal labs
Allocate Innovation District space for anchor firm
Develop clear process of reviewing policy

changes that have implications on emerging Create fast-response help desk to clarify
NEW TECH Announce Citys overall willingness to support technologies regulatory implications for new technologies
4
REGULATION emerging technologies through policy Engage national media to broadcast Open public assets and organize volunteer
Houstons image as friendly testing ground for groups for testing
innovation
Accelerate digitizing pencil-and-paper

processes; improve online portal for digital
Continue supporting City of Houston Hackathon admin support Sustain and expand existing programs
EMBRACE
10 Create page on City Government website to Streamline and digitize Citys procurement Organize coding bootcamps and other digital
STARTUPS
Leading
publish data, problem sets, and desired projects applications literacy training programs accessible to all
Create program for startups to test their
products & services at City facilities for free
Participating
Green space enhancements within districts

INNOVATION Help I&A Identify target district areas 312/313 tax abatements for district residents Rail construction to connect Montrose District
6
DISTRICT to Metro Line

RECOMMENDED IMMEDIATE NEXT STEPS FOR
THE INNOVATION ROUNDTABLE
OBTAIN BUY-IN ASSIGN OWNERSHIP MONITOR PROGRESS
Socialize with GHP board and broader Drive accountability by identifying Create cadence of regular
corporate ecosystem for endorsement individual owners & project managers checkpoints with the Council and
for each initiative project managers
Synchronize with Mayors Innovation
Taskforce Mobilize project teams of stakeholders Prioritize efforts and adapt resourcing
from each impacted party for each as needed
Media campaign to highlight the initiative
opportunity and garner support from Assign KPIs for each initiative to track
broader community Standup Strategy Office with progress
dedicated resources to augment
initiative efforts
MARCH APRIL MAY JUNE

Roundtable agrees on initiatives to Kickoff initiative action teams Kickoff Strategy Office & Fund-of- Open Strategy Office
move forward & assigns owners Engage media to highlight funds fundraising efforts Second initiative team
Efforts synced with Mayors Houstons opportunity and vision First initiative team checkpoint checkpoint
Taskforce

APPENDIX
42
APPENDIX
1. GENERAL SUPPORTING CONTENT
2. STARTUP GENOME BENCHMARKING
3. STARTUP GENOME HOUSTON
SURVEY ANALYSIS
43
POTENTIAL INITIATIVES EXPLAINED (1/2)
# PROPOSED INITIATIVE DESCRIPTION
Create a North Star to focus Houstons innovation efforts and create traction/momentum around a targeted vision (e.g. new energy capital) thats supported by/connected to bets on
1 BHAG/Thematic Focus
specific tech (e.g. IIOT) that encourage specialization and recruitment in the ecosystem
2 Recruit star professors Poach top professors to bring R&D dollars to Houston universities and quickly create a top global program in an in-demand field (e.g. computer science)
3 Innovation output in tenure review Incorporate startups-created or patents-issued to tenure review process for professors at Houston schools to incentivize innovation/startup output activities
Create policy framework to quickly embrace and encourage testing of new tech (e.g. autonomous cars) to attract hi-tech firms to use Houston as testing grounds; also signals cultural
4 Be open testing ground for new tech
values
5 Startup externships Place local university students at startups for work opportunities learn about new career paths, develop in-demand startup skills, and bring startup culture back to universities
6 Founder visa program Match aspiring founder Houstonians on H1B with local universities for visa sponsorship to de-risk taking the leap on a new venture (similar to NY program)
7 Corporate EIR program Recruit SV/Boston startup vets to Houston with exclusive access to F500 problem sets as internal corporate EIRs with goal of creating new business out of the solution
Collaborate with global sister cities (e.g. in South/Central America) allowing foreign startups to setup US office in Houston (if hire local tech talent) and attract US firms to Houston with
8 Int'l startup exchange program
opportunity for easy/cheap access to intl markets through the program (see Capital Factorys Touchdown Austin program)
Program that connects local corporate talent with aspiring entrepreneurs. Aspiring entrepreneurs can do legwork to validate corp. talents ideas to de-risk leaving job, or corp. talent can be
9 Corporate talent matchmaking
poached as management for new companies
10 Nights and weekends co-working program Cater to F500 talent aspiring to startup company with easy-access/cheap program to spend nights and weekends at co-working space working on their ideas
Startup space @ NASA / Starburst

11 NASA allows dedicated space at JSC for startups working on the Startup NASA (tech commercialization) program, or invite Aerospace themed accelerator program to open chapter there
chapter
12 Tech education for the underprivileged Tech & entrepreneur education program in underprivileged communities (e.g. bootcamps)
Incentivize a major hi-tech firm to relocate or open a Houston office (via tax breaks, etc.) creating a local anchor and source of operationalized, full-stack tech talent (should move into
13 Recruit Hi-tech anchor firm (e.g. Amazon)
district)
14 Recruit Life science anchor company Same as #13, but specifically into TMC, serving as anchor for Med startup community
15 Recruit Fed research institutions Trump wants to move pieces of the Federal government to the low-cost Midwest; Houston could actively recruit a R&D-oriented brand (e.g. DOE) to serve as talent/funding source
16 NASA ecosystem participation Even if they dont open an accelerator at JSC, NASAs participation as the Aerospace anchor in Houston is critical; Need to provide mentorship, access, etc. to local startups
17 Innovation district(s) Create density around TMC and Montrose @ Westheimer with dedicated districts with working, living, fun space
18 Make innovation district green Appeal to enviro-awareness of startup community and make the innovation district green (e.g. bike share, recycling, green space); e.g. Abu Dhabi is building green innovation district
19 Metro to innovation district Connect Montrose area to Metro light rail, connecting downtown, Montrose @ Westheimer district, & TMCx district
20 Lifestyle conferences (culinary, gaming) Host general creative / lifestyle conferences with opportunity to appeal to wide audience and influence wider cultural perception of Houston (e.g. art, culinary, gaming, & art car parade)

POTENTIAL INITIATIVES EXPLAINED (2/2)
# PROPOSED INITIATIVE DESCRIPTION
21 Startup investor & F500 speed dating Host speed dating events that connect startups with potential customers (F500) and investors (local and coming into town)
22 Open strategy office Open Ecosystem Strategy office with dedicated FTEs to community building, fundraising, etc.; can be responsible for many initiatives; similar to many other ecosystems
23 Ecosystem website Create informational/onboarding website for those trying to get access to the community single source for information
24 Ecosystem news Curate local startup news for distribution within community and more broadly; act as bridge between innovation and media bringing stories to their attention
25 Ecosystem job board Dedicated job board for local startup positions making it easy to find/apply for/and recruit within ecosystem (very similar to other ecosystems, typically managed by strategy office)
26 Host Innovation conference Host major innovation conference (~SXSW) focused on thematic areas Houston is building startup brand around; playing to Houstons marketing strengths
27 Channel partners pitch program Consulting/services firms commit to hearing startup pitches for why they should take their product/service to market to F500 clientele; connecting startups with corporations
Recruit influencer who is part of the local elite establishment to 1) lead fundraising for Fund-of-funds and 2) lead cultural shift among local elite making startup investing cool (e.g. JB
28 UHNW Champion
Pritzker)
Educational program for HNW people to get smarter on investing in the startup asset class (e.g. speaker series at the Coronado Club), and organizing Angel group laser-focused on high-
29 Angel education
growth, high-impact opportunities
30 Minimize non-market capital Re-focus ecosystem handouts and duplicative infrastructure (I&A) money to actively seek market returns
Offer aspiring entrepreneurs free office space at co-working venue for set period of time while they seek angel funding with commitment of staying there for X years (3 in NYC) if they
31 Freemium co-working space model
successfully get funding (keeps startups in town)
Raise Fund-of-fund from local corporations/universities to invest in VC firms committing to spending time in Houston with local startups (proven model to bringing capital into ecosystem);
32 Fund-of-fund
asking for access to under-utilized F500 assets (e.g. R&D labs, capital equipment) for startup R&D at the same time
33 Local evaluation clause to state VC invest. Add language to state legislation that requires VCs receiving state investment to spend some time in the state / consider TX-based companies
34 Marketing blitz Raise funds for orchestrated, cross-channel marketing campaign to associate Houston with Innovation across the country
35 SEO campaign Fine-tune Houstons search results via search engine optimization; Talent looking to relocate relies on Google for information on potential cities putting Houstons best face forward online
36 Houston startups on TV shows Orchestrate getting Houston startups featured on TV to more closely associate Houston with Tech in viewers minds (e.g. Billion Dollar Buyer, Shark Tank, PBS)
37 Diversity Campaign Shake the energy capital of the world epithet with a focused marketing image around being the most diverse city in the US which also appeals to the startup/creative class
38 Easy-access city procurement Simplify and open the city procurement process to all potential vendors (e.g. no legacy/years-of-operation requirements) to champion the cause of supporting local startups
39 Matching govt investments De-risk VCs investing in Houston companies by following/matching VC investments in local companies with government funds
40 City-wide civic hackathon City government to host annual hackathons targeting civic challenges and sharing problem sets (e.g. new Sheriffs program)

TOP 10 STARTUP COMPANIES
(BY TOTAL FUNDING) PROFILES
FUNDING
# COMPANY SECTOR INDUSTRY DESCRIPTION
($MM)
1 Giant Grey 104 Software BI, Analytics Giant Gray is an industry leader in machine learning and the creator of Graydient, the first Cognitive Neurolinguistics AI System.
Software
2 LaserGen 85 Healthcare Biotechnology Lasergen is a research and development company dedicated to the advancement and commercialization of unique nucleotide
chemistries with particular focus on sequencing.
3 Glori Energy 72 Energy & Oil & Gas E&P Glori Energy, formerly Glori Oil, works with oil producers to install the AERO System (Activated Environment for the Recovery of Oil) into
Utilities existing production infrastructure to increase oil recovery. Glori's AERO System enhances production from waterflooded fields by
stimulating a reservoir's naturally occurring microbes to improve water sweep and oil mobility.
4 Ingrain 63 Electronics Electronic test, Ingrain provides efficient flow of detailed and accurate information about the porosity, permeability, resistivity, and elastic properties of
measurement & rock samples. Ingrain operations are integrated into a single procedure, increasing both the quality and the quantity of reservoir rock
monitoring information which underlies field development in the oil and gas industries.
5 NEOS 60 Energy & Oil & Gas E&P NEOS helps governments, energy ministries and exploration teams in the natural resources industries make faster, more informed
GeoSolutions Utilities decisions about where to explore, lease and drill. In partnership with its clients, NEOS acquires and simultaneously interprets multiple
geological, seismic, non-seismic and geochemical datasets to identify valuable resources in the subsurface, including hydrocarbons,
minerals and groundwater.
6 Empyrean 53 Internet Internet Software & Empyrean is an HR advanced HR technology and service company dedicated to the administration of healthcare and benefits for
Services employers, brokers and the emerging exchange market.
7 Zeno 52 Healthcare Medical Devices & Zeno Corporation is a Houston-based medical technology company engaged in the development of products using its patented ClearPoint
Equipment technology as well as other products related to skin care.
8 Alert logic 48 Computer IT Services Alert Logic managed Security-as-a-Service solutions provide network, system, and web application security, wherever your infrastructure
Hardware & resides.
Services
9 Prometheus 48 Energy & Renewables Prometheus Energy provides turnkey small-scale liquefied natural gas (LNG) solutions for energy consumers and energy producers.
Energy Utilities Prometheus helps energy consumers reduce fuel costs and environmental footprint by moving from high cost crude oil-based fuels to low
cost, secure, domestic LNG.
10 TAS Energy 45 Energy & Renewables TAS Energy is a global technology company providing clean, economic, modular energy solutions for the power generation industry;
Utilities district, commercial and industrial process cooling; data center/mission critical markets; and the renewable energy sector.
Copyright 2017 Accenture All rights reserved. Source: CB Insights, Accenture Analysis 46
DEVELOPING AN INNOVATIVE ECOSYSTEM AMPLIFIES
THE IMPACT OF TECHNICAL TRAINING PROGRAMS
TRADITIONALLY OFFERED BY SKILLS TO SUCCEED (S2S)
S2S OBJECTIVES OPPORTUNITIES ENGAGED PARTIES POTENTIAL
IMPACT
Build Increase density of tech talent Universities

Individual Expose tech talent to diverse work-styles; Government
skills propagate startup culture Corporations
Attract VC investment in local startups Chamber of Commerce

Create
Employment Attract large tech companies to Houston Corporations
opportunities Create diverse and inclusive environment in tech Philanthropists
space
Kindle Make it easier to start a company Chamber of Commerce

entrepreneurship Build up Houstons reputation as a startup city; Government
establish thematic focus and rallying cry for Universities
Houston entrepreneurs
Corporations
Develop close-knit startup community Media

IN ADDITION TO TOP 10 INITIATIVES, ADJUSTMENTS
AT LOCAL CORNERSTONE INSTITUTIONS COULD
FURTHER INFUSE INNOVATION INTO CITYS DNA
UNIVERSITIES AND RESEARCH
STRATEGY OFFICE GOVERNMENT
INSTITUTIONS
GHP
Incorporate innovation impact into tenure Set up international startup exchange State to require VCs receiving state investment
review process program to broaden market reach of local to visit and consider TX-based companies on a
startups and attract foreign startups to best effort basis
Recruit Entrepreneurs in Residence (EIR) to setup office
improve technology commercialization State to set up program to match VC
Host speed dating events to connect investments in local companies
Set up externship programs with local startups with potential customers and
startups investors City to provide tech & entrepreneur education
program in underprivileged communities
NASA could offer coworking space for Offer qualifying entrepreneurs free office
aerospace startups or bring Starburst space at co-working venues in exchange
accelerator program to Houston for a commitment to stay in the city after
receiving VC funding
Copyright 2017 Accenture All rights reserved. Source: Accenture interviews 48

WERE THE 4TH LARGEST US CITY BUT ~20TH
LARGEST STARTUP ECOSYSTEM
2015 US CITY POPULATION (000)1 2011-15 AVG. VC INVESTMENT ($MM)2 EST. ACTIVE STARTUPS3,4 2011-15 TOTAL EXITS3,
NYC 8,550 SF $12,500 SF 6,000 SF 1564

LA 3,972 SJ $5,182 NYC 2,928 NYC 884
Chicago 2,721 NYC $3,937 Boston 1,869 Boston 459
Houston 2,296 4th Boston $3,877 LA 1,550 LA 452
Philly 1,567 LA $2,509 Seattle 852 Chicago 277
Phoenix 1,563 S. Diego $967 DC 726 DC 224
S. Antonio 1,470 Seattle $929 S. Diego 612 Seattle 218
San Diego 1,395 DC $899 Chicago 609 Denver 216
Dallas 1,300 Chicago $797 Austin 540 Dallas 188
San Jose 1,027 Austin $636 Philly 435 S. Diego 179
Austin 932 Atlanta $480 ATL 420 Philly 176
Jville 868 Philly $405 Dallas 380 ATL 167
SF 865 Denver $402 Denver 361 Austin 156
Indy 853 Dallas $377 Miami 338 Houston 128 14th
Columbus 850 Minn. $308 Minn 312 Minn 118
Ft. Worth 833 Miami $292 Raleigh 291 Balt. 112
Charlotte 827 Provo $255 SLC 290 Miami 99
Seattle 684 Boulder $250 Portland 260 Portland 91
Denver 683 Houston $238 19th Phoenix 218 Raleigh 84
El Paso 681 Balt. $215 Pitt 198 Phoenix 83
Detroit 677 Durham $210 Nashville 175 SLC 82
DC 672 S. Barbara $207 Balt. 169 Nashville 51
Boston 667 Pitt $199 Houston 150 23rd KC 50
Memphis 656 SLC $173 KC 78 Pitt 44
Nashville 655 Phoenix $173 NOLA 28 NOLA 7
Sources: 1) US Census Bureau, 2) PWC/NVCA MoneyTree, 3) Mattermark, 4) Accenture analysis

Copyright 2017 Accenture All rights reserved. Includes all known private company exit activity 49
OVERALL LOW WALKABILITY, WITH POCKETS OF
WALKABLE NEIGHBORHOODS NEAR MIDTOWN,
DOWNTOWN, MONTROSE AND WEST UNIVERSITY AREAS
City* Walk Score Transit Score Bike Score
New York 88.9 84.1 65.1
San Francisco 85.7 80.4 75.1
Philadelphia 78.3 66.8 67.5
Chicago 77.5 64.7 70.2
Los Angeles 66.3 51.3 56
Average 53.4 47 53.6
San Diego 49.9 36.7 45.5
San Jose 49.8 41 56.9
Houston 47.8 36.8 49.3
Dallas 45.4 39.5 43.7
Columbus 40.4 31 46.5
Phoenix 40.3 32.2 54.3
Austin 39.2 33.5 51.7
San Antonio 36.5 36.3 42
Indianapolis 29.2 23.7 41.1
Jacksonville 26.3 39.5
Copyright 2017 Accenture All rights reserved. * US Cities with population of more than 750,000 within city limit 50
HOUSTON LACKS THE OUTWARD APPEARANCE OF
A WELL CONNECTED STARTUP COMMUNITY
Startup community network components * Startup digest
ORGANIZING ECOSYSTE EVENTS

CITY NEWS JOBS PROVIDER PROFILE PROVIDER STRATEGY
ENTITY M WEBSITE CALENDAR
HOU * No organized provider
NYC Private multi-city chain Large cities with sizeable

ecosystems
CHI Private multi-city chain
BOS Private multi-city chain Presents enough benefit for

private media company to apply
LA Private, local org website template
DC Private multi-city chain, local org
ATX Private multi-city chain
Denver Private multi-city chain
Philly Government, local org Mid-size ecosystems
St. Louis Chamber of Commerce, local businesses Government or Chamber curates

Detroit Local org ecosystem content
Atlanta Chamber of Commerce, local org Local startups self-organizing
KS. City Government, local org
Omaha Chamber of Commerce, local org
Pittsburgh Government
Cincinnati Chamber of Commerce

CITY INNOVATIVE ECOSYSTEM SITES
Organizing entity Ecosystem website News Jobs Events calendar

HOU
NYC Builtin Builtin Builtin Builtin
CHI Builtin and Inno Builtin and Inno Builtin and Inno Builtin and Inno
BOS Builtin and Inno Builtin and Inno Builtin and Inno Builtin and Inno
LA Builtin Builtin Builtin Builtin
DC Inno, Fosterly, DMV Startups Inno, Fosterly Inno, Fosterly Inno, Fosterly, DMV Startups
ATX Builtin and Inno Builtin and Inno Builtin and Inno Builtin and Inno
Philly PhillyStartupLeaders, Technical.ly Technical.ly PhillyStartupLeaders, Technical.ly PhillyStartupLeaders, Technical.ly PhillyStartupLeaders, Technical.ly
Denver Builtin Builtin Builtin Builtin
St. Louis Accelerate St. Louis Accelerate St. Louis Accelerate St. Louis, EQ Accelerate St. Louis, EQ Accelerate St. Louis
Detroit Grow Detroit Grow Detroit Grow Detroit

Atlanta StartupAtlanta Hypepotamus Hypepotamus Hypepotamus Hypepotamus
KCStartupFoundation, Kansas City

KS. City fwdKC, Kansas City Startup Village fwdKC fwdKC fwdKC, Kansas City Startup Village
StartupVillage
Omaha OmahaStartups OmahaStartups, Silicon Prairies Silicon Prairies Silicon Prairies Silicon Prairies
Pittsburgh LaunchPGH LaunchPGH LaunchPGH LaunchPGH

Cincinnati StartupCincy Cintrifuse StartupCincy

EVOLUTION OF CHICAGOS ENTREPRENEURIAL
ECOSYSTEM: A TIMELINE
1996 2003 2004 2007 2009 2010 2011 2012 2013 2014 2015 2016
Future successes formed String of high-profile exits

(e.g. Groupon 2008) (e.g. Groupon 2011)
TAKEAWAYS KEY TAILWINDS: KEY HEADWINDS:

FOR HOUSTON Lower barriers to scaling startups in 2017 Level of competition among ecosystems
IN 2017: present opportunities to accelerate timelines has increased significantly
Source: HBS Case Study: Rising from the Ashes: The

Copyright 2017 Accenture All rights reserved. Emergence of Chicagos Entrepreneurial Ecosystem 53
APPENDIX
SURVEY ANALYSIS
54
STARTUP GENOME RANKINGS:
PERFORMANCE AND VC ACCESS
METRIC DEFINITION UNITS
% Los Angeles
GROWTH- Indicates the rate of startups that New York City
Houston Denver-Boulder
STAGE raise Series A and later succeed Austin Silicon Valley
St. Louis Atlanta Seattle Boston
SUCCESS to raise Series C
Chicago
5 10 15 20 25 30
% Silicon Valley
Indicates the rate of startups that Denver-Boulder
EARLY-STAGE Houston
Austin
SUCCESS
raise Series A and later succeed Atlanta Los Angeles Boston St. Louis New York City
to raise Series B Chicago
Seattle
30 35 40 45 50
All VC investments in $Bn

Chicago
VC FUNDING, Houston
Crunchbase, Dealroom, local lists
ALL St. Louis Denver-Boulder Atlanta Austin Seattle Los Angeles Boston New York City Silicon Valley
INDUSTRIES provided by partners and our
survey 2 4 10 20 66
All VC investments in tech $Bn

VC FUNDING, companies in Crunchbase, Houston Denver-Boulder
TECH Dealroom, local lists provided by St. Louis Atlanta Chicago Austin Seattle Boston Los Angeles New York City Silicon Valley
partners and our survey 2.5 5.0 7.5 52.5
SEED & All seed and Series A investments $Bn

Denver-Boulder
SERIES-A VC in tech companies in Crunchbase, St. Louis
FUNDING IN Dealroom, local lists provided by Houston Atlanta Chicago Austin Seattle Los Angeles Boston New York City Silicon Valley
TECH partners and our survey 0.5 1.0 1.5 2.0 5.0 14.5
Source: Startup Genome

STARTUP GENOME RANKINGS: FOUNDER
PROFILES
FOUNDER % Los Angeles

Percentage of startups that have
HYPER- New York City Seattle Houston
GROWTH
founders with prior hyper-growth
Chicago St. Louis Boston Atlanta Denver-Boulder Austin Silicon Valley
EXPERIENCE or unicorn experience
5 10 15 20 25 30 35 40 45
FOUNDER Percentage of startup founders % Silicon Valley Los Angeles

Denver-Boulder
WITH 2YR+ with 2 or more years experience in Austin
Houston
STARTUP a startup as an employee prior to
Boston Atlanta Chicago St. Louis
New York City Seattle
EXPERIENCE founding their current startup 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
%
IMMIGRANT Percentage of founders who are Los Angeles
FOUNDER immigrant Austin St. Louis Chicago Denver-Boulder Atlanta Seattle New York City Houston Boston Silicon Valle
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 46
% Denver-Boulder
Percent of startups that are Los Angeles Seattle New York City
MOVING IN founded elsewhere and moved Atlanta Houston Austin Silicon Valley
Boston Chicago St. Louis
into the ecosystem
5 10 15 20 25
%
Percentage of startups that Denver-Boulder
New York City Houston
MOVING OUT expressed the intent to move out St. Louis Atlanta Boston
Austin Seattle Los Angeles Chicago Silicon Valley
of the ecosystem
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

STARTUP GENOME RANKINGS: STARTUP
FOCUS AND AMBITION
%
Percentage of startups focused on Denver-Boulder
B2B customers (vs B2C or mix
B2B FOCUS Los Angeles Seattle Chicago Silicon Valley Austin New York City Boston Houston St. Louis Atlanta
which captures two-sided market
or marketplace 25 30 35 40 45 50 55
%
Percentage of startups that rated Silicon Valley
Denver-Boulder
CORPORATE corporate interest as being high: Houston
Seattle Austin
INTEREST "Many show interest and most or Los Angeles Chicago New York City Boston Atlanta St. Louis
a few want to know more" 50 55 60 65
Percentage of startups that %

Silicon Valley
FIRST OF ITS responded their product is the first Houston Denver-Boulder
KIND of its kind in the world or in a new New York City Austin St. Louis Chicago Atlanta Seattle Los Angeles
Boston
category
30 35 40 45 50 55
% New York City

Percentage of startups that
GLOBAL Denver-Boulder Silicon Valley Houston
AMBITION
indicated an ambition to attack Boston St. Louis Austin Chicago Los Angeles Atlanta Seattle
global markets.
50 55 60 65 70 75 80

STARTUP GENOME RANKINGS: ECOSYSTEM
ATTRACTION
TOP 3 MOST POPULAR REASON SILICON VALLEY NEW YORK CITY
FOR AN ENTREPRENEUR OR A 1. 1.
Better partnership opportunities Better sales & marketing opportunities
STARTUP TO MOVE INTO THE 2. Easier to get funding 2. Better place to scale a startup to a unicorn
ECOSYSTEM 3. Better place to scale a startup to a unicorn 3. Easier to find experienced co-founders
LOS ANGELES
Silicon Valley BOSTON CHICAGO
1. Personal
Better partnership
reasons opportunities 1. Personal reasons 1. Lower cost of living
2.
2. Easier place
Better to gettofunding
scale a startup to a unicorn 2. Easier to find good technical employees 2. Personal reasons
3.
3. Better place
Easier to findtoexperienced
scale a startup
co-founders
to a unicorn 3. Better place to scale a startup to a unicorn 3. Better partnership opportunities
SEATTLE
Silicon Valley AUSTIN DENVER - BOULDER
1. Better place
partnership
to scaleopportunities
a startup to a unicorn 1. Easier to get funding 1. Personal reasons
2.
2. Easier cost
Lower to getoffunding
living 2. Easier to find good technical employees 2. Easier to find good technical employees
3.
3. Better place
Easier to findtogood
scaletechnical
a startupemployees
to a unicorn 3. Lower cost of living 3. Easier to get funding
ATLANTA
Silicon Valley HOUSTON ST. LOUIS
1. Personal reasons 1. Better sales & marketing opportunities 1. Easier to get funding
2. Easier to find good technical employees 2. Personal reasons 2. Lower cost of living
3. Lower cost of living 3. Better partnership opportunities 3. Better sales & marketing opportunities

APPENDIX
SURVEY ANALYSIS
59
DEMOGRAPHICS OF THE STARTUP GENOME
SURVEY 147 PARTICIPANTS
GENDER AGE STARTUP EXPERIENCE
25 or
younger 1st time 2nd time 3rd time
55+ 18% 11%
+
55% 29% 16%
45-55 15%
77% 25-34 29%
FORMAL EDUCATION
23% Some college Bachelors Some grad school Masters PhD
+ 35-45 27%
15% 29% 18% 11% 27%
FORMAL EDUCATIONAL FIELD
NATIVE-BORN VS. IMMIGRATED
76% 24%
Copyright 2017 Accenture All rights reserved. Source: Startup Genome Houston startup survey, Accenture analysis 60
MOST STARTUPS ARE LESS THAN 5 YEARS
OLD, BUT 10+ Y.O. STARTUPS DO EXIST
NUMBER OF RESPONSES
24
22
50% of startups are

less than 2 years old
12
On the other end,
8 startups have existed
7 for more than 10 years,
4 4 often in industries that
3 3 3 have long technology
2
1 readiness lifecycle
Earlier 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
than
2006
Percentage
of total 9% 1% 3% 2% 3% 4% 4% 3% 8% 13% 24% 26%
ALMOST HALF THE STARTUPS HAVE PAYING
USERS; ONLY A QUARTER OF THEM HAVE
RECEIVED ANGEL OR VC FUNDING Paying users ~ 50%
49
PRODUCT STAGE MOST 41 No paying users ~50%
HAD AT LEAST ONE
PAYING USER
7 9
2 2
Concept stage: not yet In Development: First Product Product Ready with Revenue: at Cash Flow
started developing the product is not Ready, but no user at least one least one Positive
product usable yet yet free user paying user
Percentage
2% 37% 6% 8% 45% 2%
of total
FUNDING STAGE
25% HAD SEED /
VC FUNDING 44 Founders, Friends and Family Angel and VC ~ 25%
~75%
33 30
24
8 5 2
No Funding Friends and >$10,000 USD Seed Series Series Series

Yet Family Investment by Round A B C
Percentage
Round Founders
of total 30% 23% 21% 16% 5% 3% 1%
MOST LOCAL STARTUPS ARE B2B; MOST
DIFFERENTIATE BY INCREMENTAL
IMPROVEMENTS OR NICHE SEGMENT FOCUS
FOCUS CUSTOMER GROUPS DIFFERENTIATION
Better
25 (higher performance or more features)
Niche
25 (tailored to a segment of the market)
New
18 first of its kind globally
New
17 others are trying but nobody is doing it successfully yet
7 Cheaper
New
7 first of its kind in our country
Local version
1 (local language and/or adapted to
our countrys specific needs, laws)
MORE THAN HALF OF THE STARTUP TAGS
(COMPANY TYPE) WERE RELATED TO TECH
85 309
Note that respondents can enter 25 Consulting Services
multiple tags per entry; therefore
the total number of tags is greater 24 Content / Media
than the number of entries 23 Other free-text entries
4 9 Retail
40 9 Nanotech
Cleantech devices
TECH 20 Medical devices
47 20 Lifesciences
20 Non-IOT
19 IOT: Non-wearable
128 8 IOT: Wearable
69 Web-based Software &

SaaS
32 Software (non-web)
27 Native Mobile App
Software Hardware Healthcare Cleantech Other Total
15 RESPONDENTS WANTED TO MOVE THEIR
COMPANIES; MOSTLY FOR SCALING
OPPORTUNITIES AND MARKET ACCESS
INTENDED DESTINATION REASONS
3 Dont know / other

5 Better place to scale a startup to a unicorn
To London
1
1 2 Better market opportunities
2 Easier to find good technical employees

1 2
2 Easier to find experienced co-founders
7
1 Personal reasons
3 1 Lower cost of living
1 Better partnership opportunities
1 Easier to get funding

Only 39 respondents have
angel or VC investment

Accenture Innovation in Houston Final Report-VF3

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Accenture Innovation in Houston Final Report-VF3

Enviado por

Direitos autorais:

Formatos disponíveis

INNOVATION

CORPORATE STARTUP ACADEMIC / BASE R&D ARTS

Copyright 2017 Accenture All rights reserved. 4

ACCESS TO LATEST ECONOMIC HOUSTONS IMAGE4 INDIRECT

Source: 1) US Census Bureau, 2) Geekdom San Antonio, 3)

Copyright 2017 Accenture All rights reserved. 5

STUDIED OTHER INNOVATION HUBS COLLECTED & RESEARCHED DATA

Copyright 2017 Accenture All rights reserved. 6

Copyright 2017 Accenture All rights reserved. 10

Copyright 2017 Accenture All rights reserved. 11

2014 2015 2016

The first Houston biotech to make Raising 33 percent more money

300,000 240,000 ~100k

skilled 1983 1988 2001 2017

5 ranked national universities H-1B visas are costly in

Source: US Census Bureau, Bureau of Labor Statistics,

$300 labor & office space cost VC

Source: Crunchbase, Company websites, Houston Business Journal, Accenture

Compromises ecosystem competitiveness

Source: CB Insights, Houston Business Journal, Baker

Source: Surge / Kirk Coburn, Fortune, Crunchbase, LinkedIn, Company

STRUCTURAL STRENGTH PROACTIVE EFFORTS

ANCHORS COOL PLACES METROPOLITAN PIVOTING INDUSTRIAL CITIES

Startup tax incentives

BEST LEARNING OPPORTUNITIES FOR HOUSTON

POTENTIAL ACTION 30 14 Talent

28 3 Innovation output in tenure review 23 Ecosystem website

4 6 Founder visa program 26 Host Innovation conference

8 Int'l startup exchange program 28 UHNW Champion

8 14 Recruit Life science anchor company 34 Marketing blitz

36 16 NASA ecosystem participation

36 Houston startups on TV shows

Houston needs focus critical mass in specific areas

3 Large number of highly skilled Houstonians on

5 Haphazard community network inhibits collision

8 Local capital isnt venture-interested

City govt should embrace startups through opening procurement,

TCRI Copyright 2017 Accenture All rights reserved.

EXISTING APPLICATION ACROSS HIGH

CLOUD PLATFORM Platform-as-a-service (PaaS) companies allow other IoT and

WHY HOUSTON? TOP ECOSYSTEMS

WHY HOUSTON? TOP ECOSYSTEMS

WHY HOUSTON? TOP ECOSYSTEMS

Copyright 2017 Accenture All rights reserved. 26

DISTRICT Specifically, encourage location in one of the innovation

Copyright 2017 Accenture All rights reserved. 27

MATCHMAKING The Strategy Office plays the role of matchmaker - vetting

Copyright 2017 Accenture All rights reserved. 28

LEGISLATION Proactive review and clarification of existing legislation potentially Barriers to

Copyright 2017 Accenture All rights reserved. 29

Copyright 2017 Accenture All rights reserved. 30

INCLUSIVE Use existing infrastructure to minimize impact to existing

TIMELINE Rail construction to connect

Copyright 2017 Accenture All rights reserved. 31

Copyright 2017 Accenture All rights reserved. 32

Investments & Fund-of-funds capital flows (with estimated amounts):

RESOURCE ~10 FTE 2-4 FTE 1-2 FTE - -

Fundraising: for FOF and Invest funds received thru

Copyright 2017 Accenture All rights reserved. 34

Copyright 2017 Accenture All rights reserved. 35

Startup market access WHERE ITS WORKED:

Copyright 2017 Accenture All rights reserved. 36

OPEN STRATEGY OFFICE Economic Utilization

RECRUIT ANCHOR HI-TECH FIRM