Austinites lead the country in the rate at which they become new entrepreneurs but Austin’s startup ecosystem is also heavily influenced by the many startups that decide to move here. Today, we want to take a closer look at the “secret sauce” that helps attract these new migrants, and then helps them gain traction and grow.
To learn more, we spoke with three SmartCities startups who initially started somewhere else and then decided to transplant their company to Austin. As we delved into the special role the Austin scene played in these startup stories, we were quite also impressed to learn about the tenacity of the founders we interviewed and the innovativeness and intricacy of the solutions they’re developing.
We hope that you'll equally enjoy the journey as we take you through the stories of Bractlet, a ‘smart building’ solution; EverlyWell, an at-home health testing solution; and Plum, an IoT light pad dimmer that implements an innovative technical approach.
The company story and Austin’s role
Alec Manfre is one of three co-founders of Bractlet, a ‘smart building’ solution that ‘uses automated software solution to improve building performance and decrease energy spend.”
Alec and his two co-founders met during their first year at Georgia Tech. They saw a need for building IoT solutions to collect more granular data and to use this data to create highly-actionable recommendations for energy savings.
The three co-founders are mechanical engineers, as well as programmers: Alec was the original hardware engineer, Brian Smith (the CTO) brought software expertise and also supported hardware development, and Matthew Lynch (the Chief Product Officer) brought expertise in energy systems. More recently, the team has brought in energy systems modelers, energy engineering veterans, data scientists, and software engineers.
The founders joined Startup Chile and lived for six months in a 500 square foot apartment in downtown Santiago. At that point, they made their own hardware, including etching copper to make the requisite circuit boards. They were ready to come back to the US, and were accepted into SURGE Ventures, a Houston accelerator for energy startups. The team was able to set itself up in Houston only after maxing out two of the trio’s three credit cards.
Bractlet knew that, in order to find the additional angel investment and start-up savvy engineering talent they required, they would have to move to Austin. And that decision has borne fruit for the team: since arriving in town, they’ve organized seed-stage funding through ATX Seed Ventures, St. Louis’ iSelect Fund, Chicago’s Energy Foundry. The team has grown from three to fifteen people and found market traction as well (more on that below).
And Bractlet remains very keen on Austin: “The central location, amidst the other Texas metropolises, complements Austin’s more manageable size and talent-rich environment, extremely well.”
The solution itself is a combined hardware-software-analytics solution. The team’s custom Bractlet Gateway collects wireless meter data at the equipment-level and is designed to integrate easily with existing systems. Data is uploaded to the cloud. It’s from there that Bractlet moves beyond being an IoT dashboard and into something much more cutting-edge.
The company does this by:
- Designing and producing their own wireless metering technology
- Maintaining a data base of potential savings measures
- Building an energy simulation model—essentially a virtualized building—and creating this build at a speed that the team claims is 90% faster than the status quo
- Incorporating data about occupancy (monitored through CO2 detectors), scheduling, and equipment degradation, etc., in the model
- Delivering a claimed 98% predictive accuracy for changes in building performance based on changed environmental or usage patterns
Impressively, Bractlet offers a full guarantee on the financial returns from their systems and usage recommendations.
Bractlet’s primary market focus was, until recently, on channel partners, such as Johnson Controls and Trane Heating and Coolling. More recently, they’ve launched a direct program, through which they’ve found substantial traction, including developing contracts with three commercial portfolio owners in Austin. Customers have universities, K-12 schools, commercial offices, health care systems, manufacturing, and government buildings, with a claimed energy cost savings of 33%.
The company story and Austin’s role
Founder Julia Taylor Cheek began her dynamic career as a consultant at Deloitte and later held leadership roles at the George W. Bush Presidential Center and Moneygram, attending Harvard Business School in the process. Julia “highly valued” these initial career experiences, of course, but her “continuing interest in generating a social impact and in entrepreneurship” ultimately led to her heading out on her own.
Julia was living in Dallas at the time that she made that decision. Her specific business concept crystallized for her after the trying personal health care experience of shuttling between specialists who did not take insurance, paying high amounts for service and, in the end, receiving hard-to-decipher black and white reports. Julia developed a “personal passion that I felt could drive me for the next decade of my life.”
EverlyWell began developing its series of at-home medical tests during this time. However, after nine months of work and multiple meetings with VC’s who provided ample advice about company location and more, Julia determined that she would have to move the company to Austin if she wished to take it to the next level: “Dallas is a great city but Austin is just especially conducive to the type of network I needed. A lot of my connections, and a lot of key investors, are based on the East and West coasts. To them, Austin is a known destination for locating interesting startups.” Cheek continues: “I also found Austin to be a superb place for recruiting. Before we moved, I spent a lot of time on AngelList, Indeed, and Stack Overflow, and was repeatedly impressed with how much talent was located in Austin. To succeed, as a first-time entrepreneur, you don’t just need engineers and marketers, you need engineers and marketers with end-to-end scaling experience. Austin has that.”
The Austin health care start-up ecosystem, in particular, is becoming more attractive, as well: “The opening of the Dell Medical School and the plans for the Dell Seton Medical Center, as well as, probably most importantly, the opening of the AthenaHealth Accelerator, where we work, are all very encouraging. Highly-regulated industries, such as health care, really demand an extra degree of counsel and support, so these developments really make us feel like we have the wind at our backs in Austin.”
Julia does note on challenge the Austin startup ecosystem is facing: the decline in true early-stage funders. “The departure of Austin Ventures left an important hole and having a full pipeline for investors, and for startups, should, of course be the goal.”
EverlyWell has five core employees in addition to Julia, the CEO: two coders, a Chief Medical Officer, a Head of Product, and a Head of Operations. Four are Austin-based (As an interesting aside, the Chief Medical Officer was located at Drop Out Club, which helps doctors and scientists in traditional employment situations to segue into the startup world).
Julia believes that, in addition to the positive impact the company can create for any customer, the company contributes to a broader, positive social impact: for instance, it helps those with chronic illnesses to access regular testing through much-needed convenience, and it helps expand the scope of care in rural communities where, say, a phlebotomist may not be accessible.
The company closed its seed round of $2.5mm in April, and is planning on a Series A raise sometime in 2017. They have about 1,000 paying beta customers and are working on adding more tests and scaling operations.
The service is offered in 46 states, with a few large states leading the way, for now. As the company expected, the customers are about 75% women, who also refer the service to friends and family.
The company story and Austin’s role
Plum caught our attention for its interesting ‘connected home’ solution and its sleek marketing materials. We became even more intrigued when we learned about the imaginative technical approach of the product (more below) and the deep expertise of the founder, Utz Baldwin.
“Our decision to start Plum was quite considered, as I’ve had many years to think about the space,” Utz explained. “I began my career as an integrator of sophisticated control systems to automate estate homes. Later, I was the CEO of a global trade organization, CEDIA, that was heavily involved in home systems integration. During that time, we commissioned a number of studies about sub-systems in the home. Companies like Sonos and Nest were clearly beginning to democratize and disrupt their respective product categories, it became apparent to me that the lighting sub-system was being overlooked, and the light switch just so happens to be the most used device in the home.”
Utz launched the company in 2012, and with his own money: “I’m a Native Texan and lived in Houston at the time but knew that I would eventually have to make a move; Houston is not really the right place for starting a consumer technology product. If you want to stay in Texas and have access to the right engineering talent and startup community, Austin is the only real choice. We did seriously consider moving to the Bay Area to launch the company, but decided that we wanted to build a big Texas company, and Austin was one of the few non-major cities where we could make this happen.”
Utz acknowledges that “it may be harder to recruit pedigreed executive level talent in Austin today, but that is clearly changing. The influx of talent from around the country will definitely help propel Austin forward as a leading innovation and economic city. We have been fortunate to build a great team through our involvement with TechStars and Capital Factory. Also, of course, due to the quality of life and cost of living, Austin is attracting a lot of attention from major technology companies who help bring talent to our city.”
Utz, who describes himself as “quite opinionated,” argues that “We are in the midst of a hardware renaissance for connected devices, largely due to disruption in product development. With enabling devices such as Raspberry Pi and Arduino, 3D printing, new design and prototyping software, and, of course, new crowdfunding opportunities, development time and cost have come down considerably. The challenge, though, lies in commercializing a product. Moving from prototype to production still requires an immense amount of engineering time and capital. Austin is certainly starting to attract the type of talent and investment capital that can address this opportunity and challenge.”
“The Plum light pad is, in fact, an enabler for a new IoT approach to the home,” Utz explains. “When we first launched at DEMO in October 2012, we rolled out a mobile app and dimmer. We eventually realized, though, two things. First, there was no existing light switch that could be integrated into that control system and second, the premise that the mobile phone should be central to Smart Home solutions should be questioned--people don’t necessarily want to take out their phones every time they want to manage their home.”
What does this all boil down to? The light pad acts as a “distributed, shared, fault-tolerant computing system.” Each pad includes five microprocessors and control features can be accessed either via a mobile device or via specific tap/swipe combinations on the pad itself. “For instance,” Utz explains, “every night, before heading upstairs, I use a two-finger touch on a light pad at the bottom of my stairs to turn off all of the lights in my house at once. The sequence completes just after I get to the top of the stairs. I don’t have to reach for my phone or, of course, for multiple switches, to get this done. There are many, many potential extensions to this distributed computing principle that we believe will make the Smart Home all the more attractive and accessible.”
Baldwin is also proud of the fact that “the light pad is the first dimmer to have submetering built in.” The technology, further, can infer if it’s LED or incandescent and make suggestions for power management and/or changing the light source; is Bluetooth-enabled; and can triangulate its position.
We’ve been shipping for about seven months and about 8,000 units are out in field. We’ve received 4.5 of 5 stars on Amazon. Our average initial order is four units but, even better, the average re-order rate is eight additional light pads. We knew we needed to create fanatical early customers and that’s why every business and design decision was UX-driven. We think it’s paying off.”
Plum is currently working on closing its Series A round of funding.
As ever, the best way to get excited about an ecosystem that is supporting some of the nation’s most exciting technologies for making urban life more convenient, more efficient, and healthier, is to speak to the founders of the new businesses leading the way. We hope that you’ll help us spread the word about Austin’s leading role in nurturing these important ventures.