Investment, collaboration, corporations and access to talent -- not to mention industry-disrupting, entrepreneurial UNT alums -- are driving innovation culture in DFW with impacts in the state and beyond.
Accelerator: In an accelerator, a seed investment is made in return for equity, usually between $15,000-$50,000. Startups end an accelerator program with a demo day in which they pitch to investors.
Angel investor: An individual who provides a small amount of capital for a stake in the company. Typically precedes a seed round and usually happens when the startup is in its infancy.
Bootstrapping: Funding a company only by reinvesting initial profits.
Disruptor: A way to describe a product or technology that will change its marketplace.
Exit: How startup founders get rich. It's the method by which an investor and/or entrepreneur intends to "exit" their investment in a company. Common options are an IPO or buyout from another company.
Friends and family: An investment in a company that often follows the founder's own investment, made by people who are investing primarily because of their relationship with the founder.
Scale: The ability of a company to maintain or increase its level of performance when tested by larger operational demands.
Seed: The first official round of financing for a startup. At this point, a company is usually raising funds for proof of concept and/or to build out a prototype.
Venture capital: Significant sums of money -- typically in the $500,000 to $3 million range -- provided by venture capital firms to small, high-risk startup companies with major growth potential.
s the clock crawls closer to 9, the folding chairs that line floor 14 of Ross Tower fill with established and would-be entrepreneurs. The gathering crowd is part of the hundreds who have trekked to downtown Dallas for Techstars Startup Week, a conference designed to bolster business innovation by offering workshops on everything from digital retail and health care to augmented reality and artificial intelligence.
Although it's an unexpectedly dreary April morning, the atmosphere inside is cheery, especially as the week's opening session kicks off. Titled "Insight from Repeat Offenders," it's a panel of serial entrepreneurs that features Dave Copps ('91), the founder and former CEO of three companies including Addison-based investigative analytics firm Brainspace, acquired by Cyxtera in 2017 as part of a $2.8 billion deal. (Watch for a profile of Copps in the fall issue.)
He is exactly the kind of startup success story many here hope to become, and the entire point of the panel is to explain how he got here. So he begins where all companies do: with ideas.
"That initial idea is all about commitment," says Copps, who earned his B.A. in anthropology at UNT, where he exercised his executive acumen as the first president of the campus Entrepreneurs Club. "Most companies die between your ears because they never get out."
Of course, ideas also tend to perish without the resources to support them. But over the past decade, the North Texas region has transformed into a place where tech startups spring to life. Granted, DFW isn't Silicon Valley -- yet. But every year, its rankings rise in key areas that drive innovation.
There's the influx of capital from angel investors, seed accelerators and venture capital firms -- and the need for more.
"We wouldn't have started a VC firm in Dallas if we didn't believe there was opportunity," says Kevin Stevens ('11), who co-founded Intelis Capital in 2017. "We're entrepreneurs, too."
There's collaboration in the form of makerspaces, incubators and co-working spaces, including TechMill Denton, formerly led by Kyle Taylor ('12), which partners with Denton-based Stoke Coworking to host events and workshops for aspiring entrepreneurs. UNT recently revamped the Murphy Center for Entrepreneurship and Innovation, which is set to become "a leading resource for the North Texas region -- partnering with a range of ventures, from innovative ideas to early stage growth companies, while also building bridges with the investor community at large," says Jon McCarry ('01), its senior director.
There's access to talent provided by area universities, including the 9,000 students who graduate from UNT each year. The university is ensuring graduates are ready to tackle careers in the ecosystem by adding new degree programs like data science and advanced data analytics, increasing its collaborative partnerships with companies such as NetDragon and Toyota, and expanding its reach with locations across the region. Those locations include UNT's New College at Frisco -- a thriving mecca for Fortune 1000 companies -- and a new branch campus, announced in May as part of UNT's "public-public" partnership with the city of Frisco and its Frisco Economic and Community Development corporations that is expected to serve at least 5,000 students.
Recent DFW Rankings
- #2: CB Richard Ellis' report on the U.S.' biggest data centers (2017)
- #6: CB Richard Ellis' Annual Tech Talent Scorecard (2016)
- #7: Forbes' Best Places to Launch a Business (2018)
- #10: Forbes' Best Places for Business and Careers (2017)
- #11: Kaufmann Index of Startup Activity (2017)
Sources: CB Richard Ellis; Dallas Chamber of Commerce
Then there are the big-name corporations, including 22 Fortune 500 companies, that call DFW home. The university is working to help students and faculty garner attention from industry executives with initiatives like the Innovator Awards, sponsored by the Office of Research and Innovation, which encourage the campus community to show off their cutting-edge ideas. Ryan Girardot ('17), a 2017 winner for his EPLAY sports app, learned the ins and outs of pitching his product from Mike Rondelli, associate vice president for innovation and commercialization.
"The university is committed to supporting the entrepreneurial spirit of our students, faculty and alumni," says Rondelli, who also will serve as a judge at this year's CodeLaunch, a seed accelerator competition for those with software tech startup ideas that is co-sponsored by UNT. "As the demand for tech-savvy, forward-thinking innovators increases, the UNT community will continue to make significant contributions to the region's expanding startup ecosystem."
Finally, there are the UNT alums who leveraged DFW's many resources, some as students, to launch their industry-disrupting ideas. With innovations ranging from privacy apps to eLearning platforms to product visualization software, these entrepreneurs pumped up the North Texas region's reputation in the process. They are the embodiment of Copps' final piece of advice, which itself echoes the wisdom of another successful business: "Just do it."
On Rosemary Roden's first day of kindergarten, her mom sent her off to school with a few half-joking words of encouragement.
"No pressure," Emily Roden ('01) told her, "but you better be ready, girl."
After all, Rosemary is the namesake of ReadyRosie, a digital platform Roden launched in 2012 to help families support learning outcomes outside of the classroom. A comprehensive family-engagement solution for schools, Denton-based ReadyRosie offers 1,200-plus video tips for parents that encourage meaningful interactions with their child.
The idea was born from Roden's experience as a working mom who, despite earning a degree in music education from UNT, worried she wasn't always engaging in intentional, planned activities with her daughter.
"I'd go to bed thinking, 'Did I really connect with her or teach her anything today?'" Roden says. "Here I was as a teacher, feeling inept, and I thought how much more so for a parent who doesn't have the background to understand our educational system?"
So in 2011, she left her job at Pearson Education and filmed three videos with assistance from UNT's media arts department. She showed the finished clips to Denton, Richardson and Arlington ISDs for feedback.
"I asked, 'Do you think this will help get kids ready for school?'" Roden recalls. "All three districts said, 'Yes -- if you build this, we will buy it.' That gave us the green light."
A bootstrap company, ReadyRosie started out with the three school districts, three employees, and an initial investment of $10,000, made by Roden and her husband, Kevin ('98), a former assistant director of student life at UNT's Texas Academy of Mathematics and Science (TAMS) and a mentor at Stoke. Now the company has 17 employees and serves more than 400 school districts and Head Start programs. Roden was twice invited to the White House during the Obama administration to take part in conversations about how to close the opportunity gap for ethnic minority and low-income students.
The "spirit of excellence and achievement" that surrounded Roden during her time in the College of Music -- routinely ranked as one of the nation's best -- has instilled in her "a drive and work ethic that is still very much a part of my day-to-day life."
As a consummate educator, she wants to provide up-and-coming UNT talent with real-world experiences that champion the same exceptional expectations. To achieve that goal, Roden routinely hires media arts students as interns to film some of ReadyRosie's clips and graphic design students to create promotional pieces. It keeps the company's costs reasonable, while also preparing students for the realities of the local startup ecosystem.
"It's a win-win," Roden says.
Even as a kid working summers at his dad's contract manufacturing company, Chintan Sutaria ('05 TAMS) recognized the tediousness of the request-for-quotation (RFQ) process. So as a second-year student at TAMS, he decided to confront an obvious problem with an obvious solution: a spreadsheet model that streamlined the process.
"That was the very first iteration of what CalcuQuote would eventually become," says Sutaria, who graduated with a B.S. in business administration from the University of Southern California.
A decade later, after speaking with potential customers, he officially launched CalcuQuote, a cloud-based quote management system that helps electronics contract manufacturers increase the speed and accuracy of the quotation process. While traditional RFQ can take anywhere from a day to weeks, Dallas-based CalcuQuote's direct integration with component distributors determines the price and availability of the components needed for electronic assembly within minutes.
"When we first started, it was hard to get traction because people didn't believe something like this could exist," Sutaria says.
But Sutaria is turning contract manufacturers into believers. CalcuQuote launched in early 2015 with two customers; by the end of 2016, it had 30. Now, the company has more than 70 clients with the goal of hitting 100 by the end of 2018.
Sutaria doesn't foresee any problems reaching that mark -- or his goal of building a company that is "sustainable, scalable and valuable" -- thanks to the mentoring and investment he's received from the DFW startup community. While about half of the funds he raised for CalcuQuote were through the friends-and-family route, the rest came from entities such as Dallas-based Venn Ventures.
"The startup community here is phenomenal," says Sutaria, who occasionally returns to campus to impart his entrepreneurial experiences at events like TAMS career nights. "There were so many showcase events I could go to, like New Tech and 1 Million Cups. You learn how to pitch your business to a broader audience."
When Jesse Stauffer ('15) told his dad about Bitzy, an ephemeral social media platform the UNT junior was creating with his brother, Casey ('15), he suggested the two call Mark Cuban to pitch a partnership. Stauffer laughed off the advice.
"I remember thinking, 'That will never happen,'" he says.
But a year later, Stauffer wanted an expert opinion on Bitzy, and who better to ask, he figured, than Cuban, the DFW tech scene's most recognizable name. So he tried nearly 50 different email combinations -- mcuban, mark.cuban, markcuban -- and sent his message into the void.
Fewer than 24 hours later, as he sat in history class, Stauffer's phone dinged. It was a response from Cuban.
"I just got up and left," Stauffer says. "I couldn't really deal with it in the moment. I was like, 'This is crazy.'"
Following a few email exchanges, Cuban invited the Stauffer brothers to a Mavericks game. After that, he told them he wanted to partner. With Cuban's undisclosed seed investment, Bitzy became Xpire, an app that works with existing social media platforms like Facebook and Twitter. Xpire allows users to create self-deleting posts, permanently delete old posts, and judge the appropriateness of their posts based on the app's Social Scoring algorithm.
Stauffer launched the Dallas-based company in June 2014, nearly a year before he earned his B.S. in computer science. Although he says his experiences in the computer science program prepared him for his role as CEO, the days leading up to the launch were filled with nervous anticipation, especially as all eyes were on Xpire due to Cuban's involvement.
"To go from building something in my bedroom to all of a sudden being on the national news, it was nerve-wracking," he says. "I'd have these dreams at night where I'd be like, 'My servers are crashing.'"
Four years later, Stauffer continues to fine-tune Xpire. He is working to add artificial intelligence capabilities that will enable the app to read phrases with more nuance and recognize potentially damaging photos. Casey, who also earned a B.S. in computer science, still pitches in when he's not working full-time as a product manager at Pivotal Labs.
As an early advocate of digital privacy, Stauffer is finally seeing the rest of the world catch on. In the wake of Facebook's Cambridge Analytica scandal, Xpire experienced a small upswing in downloads. He hopes the trend continues.
"People are so used to downloading everything for free," Stauffer says, "they don't realize they're paying with their personal information."
In her office, situated within Dallas-based RevTech's co-working space, Nicole Mossman ('13) apologizes for the cardboard boxes stacked against the wall.
"We've done a couple of big trade shows this year, and I haven't unpacked from the last one," she sighs, gesturing to the pile. Mossman's last trade show was less than a month before in Las Vegas, where she marketed her startup EverThread to potential retail clients.
"The feedback was just incredible," she says.
In fact, Mossman says positive feedback has been pouring in from retailers who have viewed EverThread, a product visualization platform designed to improve e-commerce consumer engagement. The cloud-based asset management technology allows retailers to show all views and variations of their products and gives customers the ability to mix and match products across categories -- like a sofa, throw pillows and area rug -- in a virtual environment.
But EverThread wasn't built on this idea. When the company launched in 2014, it was a direct-to-consumer home textile retailer. As Mossman and her team began to design their website, she concluded that to be successful, they needed to build out technology that could show consumers what they were buying dynamically in real time. To test the theory, she showed the site to Fortune 500 retailers in her network.
"I asked, 'Is this something large retail would be interested in?'" says Mossman, who holds a B.A.A.S. degree in fashion design, marketing and behavioral analysis from UNT, which she says gave her a deeper understanding of marketing to businesses and brand experience. "The answer was yes. After having this conversation with multiple retail executives, we realized what we really had was a tech company."
So Mossman pivoted, and in late 2017, rebranded EverThread as a software-as-a-service (SaaS) platform for retailers and brands. The company, which has accrued nearly $1 million in capital, currently has several pending adoption deals with major retailers nationwide.
And the corporate connections just keep growing. In March, it was announced that EverThread was selected to take part in the New York Fashion Tech Lab, where female tech entrepreneurs are paired with brands and retailers like Macy's, Bloomingdale's and Kohl's. The 12-week program culminated with a demo day June 7.
"Yes, it gives us access to potential investment opportunities," Mossman says, "but more importantly, the Lab allows us to build awareness of who we are, what we're doing and what our technology can do."
For five years, Jill Schriefer ('91, '93 M.B.A.) and her husband, Tavis, took care of Tavis' mother, who suffered from the early stages of dementia. Schriefer noticed one of her mother-in-law's triggers was unsolicited phone calls, which would leave her rattled for days.
"We started talking to other friends who had family members with cognitive problems," Schriefer says. "They were having similar issues. Me, my husband and our other two co-founders thought, 'We all have telecommunications backgrounds. Maybe we can do something about this.'"
So in 2016, Schriefer started teleCalm, a phone service for families dealing with dementia that intercepts unapproved calls and routes them to the caregiver's cell phone. The service prevents loved ones from falling prey to scammers, engaging in repeated dialing or unintentionally calling late at night.
"It avoids isolation for your loved one but gives caregivers peace of mind," Schriefer says.
Armed with a bachelor's and master's in business administration from UNT, Schriefer knew she had more than just a great idea -- she also had the know-how to effectively launch teleCalm, including raising the necessary funds.
"It helps for investors to see that we have some idea of what we're talking about," Schriefer says. "It's not just, 'We have this really cool idea, give us money.'"
The Plano-based company has received funding through its participation in Dallas-based Tech Wildcatters, a seed accelerator -- co-founded by Gabriella Draney Zielke ('02) -- that invests money and resources in promising startups. In March, teleCalm became an accelerator company with Austin-based Capital Factory, which opened a Dallas location this spring.
"We've pitched or applied to every major angel group in the state," Schriefer says. "It's exhausting."
But that tenacity is literally paying off. An initial pre-seed investment of $150,000 allowed teleCalm to launch its service. Now, they have raised 64 percent toward a $400,000 seed round, most of which will go to sales and marketing. Since October 2017, teleCalm has seen more than 20 percent month-over-month subscriber growth.
"It feels like we're on the precipice," says Schriefer, who notes the ultimate goal is exit by acquisition within the next three to five years. "We've gotten great word of mouth and have several big deals brewing. There's a lot that can be done with this technology."
It's only Wednesday, but Techstars has already hosted more than 70 future-focused discussions. Mossman took part in a panel the day before, to discuss digital retail. Stauffer's been in attendance, too, for what he calls DFW's "mini SXSW."
Now it's time for "The State of Entrepreneurship," the week's crowning event, in which the startup community converges on Dallas' Majestic Theatre to celebrate the year's top triumphs. It's a packed house.
The evening's keynote speaker, Dallas Mayor Mike Rawlings, begins by listing all the things that make the region's innovation culture strong: investment, corporations, talent, low cost of living.
"We have the DNA for startups," the former Pizza Hut CEO tells the crowd.
But there's one important step left, he advises: trumpeting the trailblazers -- like Roden, Sutaria, Stauffer, Mossman and Schriefer -- who call DFW home.
"We have to cheer each other on," Rawlings insists to knowing applause. "It's time to sing about the startup community here."
The DFW tech ecosystem by the numbers
Access to talent
The region has 15 major universities and 7 community college districts. UNT graduated 9,000 students this year with four-year degrees. The university's alumni network includes 407,000 members, with 274,000 who live in the DFW area and power the region's workforce/economy.
At 32.2 percent, DFW hosts one-third of all high-tech jobs in Texas, the most in the state. The area has the 5th fastest-growing high-tech workforce and the 7th largest community of high-tech workers in the U.S. -- topped only by New York, Washington, D.C., Los Angeles, Chicago, San Francisco and Boston. UNT added 7 new tech- and business-centric degree programs this year.
Business and industry
DFW consistently ranks as a low-cost, low-tax and high-quality corporate environment, which has attracted 22 Fortune 500 headquarters and 42 Fortune 1000 headquarters. A Carnegie-ranked Tier One research institution, UNT attracts top faculty and student researchers, as well as industry partners from around the world, and generates an economic impact of $1.65 billion in DFW each year.
The DFW area is ranked 14th in the country in overall funding with $5.4 billion in investments since 2010. DFW is ranked 10th in the country in return on investment (ROI) made to these businesses.
Currently, the region has 62 coworking spaces (up from 13 in 2014), 81 executive offices, 40 incubators/accelerators, 24 innovation/experience centers and 18 makerspaces. UNT has its own on-campus accelerator, the Murphy Center for Entrepreneurship and Innovation, which aims to spur innovation throughout the North Texas region. And UNT collaborates with Hickory & Rail Ventures, which manages Denton's Stoke Coworking.