HTC business acceleration program closes

New approach to startups means an end of an era for Houston Technology Center

The Houston Technology Center’s business acceleration program closed its doors Wednesday, laying off five acceleration directors and other support staff as the city takes a new approach to nurturing startups.

The 19-year-old nonprofit, which reports having helped companies create more than 6,000 jobs and raise more than $3.5 billion in capital, was folded into Houston Exponential last year. Houston Exponential is a new citywide initiative to grow Houston’s tech startup community and help entrepreneurs tap into the city’s various resources.

It ultimately decided that HTC’s acceleration program was not the best path to build the city’s entrepreneurial future.

“It was just looking at HTC and assessing: Is this the right model in 2018?” said Michael Sklar, head of the Acceleration Strategy Committee at Houston Exponential. “Is this the right model going forward?”

Houston Exponential is designed as a central resource to connect Houston’s capital, academics, business accelerators, startups and corporations. Its leaders found that mentors and startup funding were spread too thin among too many organizations seeking to nurture new companies. Other startup assistance programs, such as Station Houston, offer similar services in more efficient, cost-effective manners, and eliminating HTC means one less group tapping into those assets, Sklar said.

“There’s only so much to go around,” said Dick Williams, a former HTC chair and the interim president and CEO of Houston Exponential.

Williams and Sklar explained that HTC focused on a longerterm approach to building startups into successful companies, sometimes nurturing young companies for years. That more costly approach has fallen out of favor in today’s startup ecosystem, where intensive three-month accelerator programs that provide access to mentors and venture capitalists have become more common.

“The startup ecosystem is like a startup company,” Williams said. “It’s changing. And you have to change to meet what’s going on.”

The Houston Technology Center, also known as HTC, is largely

considered the founding father of technology startup assistance in Houston. It was founded in 1999 and has since provided feedback to more than 1,000 companies while coaching more than 300 companies. It operated satellite offices throughout the region.

Roughly 65 client companies were using the HTC services before it closed on Wednesday.

The Texas Medical Center Innovation Institute, an organization that focuses on health care innovation, is offering three months of free co-working space and access to its mentors for HTC’s life sciences clients, Sklar said. Station Houston has lowered it prices for HTC clients for three months to match what they paid at HTC.

Some involved with HTC are sad to see its long-term, handson approach come to an end. Jane Lea Hicks, director of the HTC South Campus that focused on aerospace and related technologies, said the nonprofit was proud of assisting companies all the way through commercialization.

“The results speak for themselves,” said Hicks, who lost her job and plans to do consulting. “Eighty percent of our companies go on to be successful.”

The closing of HTC will leave some entrepreneurs, like Eugene Kesselman, in the lurch. Kesselman, founder and CEO of TapJets, a company that allows customers to instantly book a private jet with their smartphone, last year sought to become a client of HTC, but the accelerator program ended before the HTC could take on his company.

Kesselman said it will be difficult to find a similar program in Houston with the same structure and track record as HTC.

“HTC going away is a tragedy for the startup community in Houston,” he said.

Kiley Summers, the founder of SpenDebt, an HTC client, said that he believes entrepreneurs could benefit from Houston Exponential’s efforts to create a hub that will nurture tech-driven startups that have a potential to attract venture capital and to grow quickly. Houston Exponential’s goals are to transform Houston into one of the nation’s top innovation “ecosystems” by 2022, create 10,000 technology jobs over that period and lure $2 billion in venture capital to Houston-based startups in 2022 alone.

“I’m in favor of always getting better,” Summers said. “Everybody and everything deserves the right to get better, and I think that’s what Houston is trying to do here.”

Still, Summers described the closing of HTC as bittersweet. The nonprofit provided SpenDebt, a technology company that helps people pay off debt by making micropayments through everyday transactions, with access to mentors, capital and its network.

Summers turned to HTC with a business plan, but no funding. He also needed expertise to guide his technology to commercialization. After raising more than $28,000 from business pitch competitions and receiving $25,000 from the McNair Group as part of being a client with HTC, his product went to market early this year. His company is currently seeking its first round of seed money.

“It really challenged me to think about my business in a whole different way,” he said. “They really helped me during the time when I really needed them the most.”