by Gordy Slack
The road to start-up success is littered with great ideas. Turning an idea into a prototype, a viable business plan, and an effective pitch for funding is hard enough; converting that plan into a profitable business is more difficult still. That’s why the stats on tech start-ups are so brutal: about four out of five are dead by the end of their first year, says Seattle start-up consultant and lawyer Chris Villani of Compass Rosa. And of those that make it through year one, only about one in four will survive year two.
A year and a half ago, former HP executive and CITRIS board advisor Patrick Scaglia, recent engineering graduate student Peter Minor, and CITRIS special advisor Steven DeMello launched The CITRIS Foundry, a tech incubator designed to improve those odds for CITRIS students, faculty, staff, and recent alumni. The program helps its participants navigate the obstacles that can doom start-ups in their early stages.
Companies participating in The Foundry win lab space, educational resources, financial support, exposure to accomplished mentors and other entrepreneurs, says Alic Chen, but the single thing most valued by the first cohort of graduates was the cooperative community that formed around the Foundry companies.
In February, The Foundry’s first five companies completed their year of incubation. One company, Dash Robotics, has already sold its first production run of a thousand robots (they are small and only $65 per bot) and has back orders for hundreds more. Dash’s co-founder and CEO, Nick Kohut, says the program converted his group “from research engineers to capable startup founders very quickly.”
Another company, Cortera Neurotechnologies, a bioengineering group developing wireless brain-machine interfaces, has won a contract as part of a major new federal government brain-mapping initiative. Cortera’s researchers are working at the intersection of engineering, biology, neuroscience, and computer science, so a broad base of expertise and advice has been key, says CEO and co-founder Rikky Muller. “We became not only part of The Foundry but also of Skydeck and QB3 and the vast start-up community that encompasses all of those programs. These associations opened up an enormous network for us.”
Another company, Lion Semiconductor, which spun out of the Berkeley Wireless Research Center, developed integrated voltage regulators based on small, efficient, and inexpensive-to-manufacture chips that will lengthen the battery life of cell phones. The group graduated from The Foundry having secured a development agreement with one of the world’s biggest mobile phone manufacturers.
Wonyoung Kim, the CEO of Lion, cites his time with Patrick Scaglia as especially helpful. “Patrick has had a lot of experience at companies like HP. He could teach us how to work with large companies and give us advice from the customer’s perspective,” says Kim.
Altogether, the first cohort of companies cumulatively raised more than five million dollars of additional capital from venture capital, angel investors, crowdfunding and grants, says Minor.
There were twenty-eight excellent applicants for this year’s five spots, says Foundry co-manager Alic Chen. The new companies began their first six-month stints at The Foundry in March. All five of the teams are developing physical products that utilize both hardware and software, but that is where their similarities end.
“As good as the outgoing class is,” says DeMello, “everyone who participated in the application process came away feeling that the new class has raised the bar in terms of preparation and team development. This is a testament to the higher visibility of entrepreneurship, and greater opportunities offered at UC Berkeley and in the larger UC system for venture development.”
“So this year we’re doubling down on that part of our program,” says Minor. “We’re doing more community events, bringing mentors in more frequently, creating more opportunities for members to engage with outside people.”
One company, KNOX Medical, is developing a portable spirometer, a device that measures the volume of air drawn into and expired from a person’s lungs. The pocket-sized device has a mobile interface that quantifies the severity of a user’s asthma and composes personalized treatment plans in real-time. “We hope the device will reduce emergency department visits and even mortality among asthma patients,” says Charvi Shetty, CEO of KNOX.
A product under development by another team, Clairity, may also hold special value for asthmatics, who are particularly sensitive to high levels of particulates in the air. Clairity’s device is a portable air-quality sensor that tracks particulate levels, which can be read off of a user’s smart phone. Users are alerted if they find themselves in areas with dangerously high levels of pollution and can also track their cumulative exposure. The application will use crowd-sourced data to generate real-time pollution maps of cities, allowing sensitive users to steer clear of polluted areas. The group also hopes to develop machine-learning algorithms that will predict air-quality levels based on accumulated data and real-time modeling.
The company Smartbod is building a product it describes as the “FitBit and Nest of women’s health.” Their first product is a smart vibrator that will learn from and adapt to a woman’s physiological reactions, tailoring experiences to the user’s preferences and even teaching her new things about her body, says Liz Klinger, CEO of SmartBod. The devices employ machine learning and automation to fashion individualized sexual experiences for users.
Teaman & Company is making a low-tech wearable product, but employing high-tech solutions to overcome customer-service challenges that many web-based luxury-goods companies face. The team uses 3D printing, CAD, and other online services to enable custom jewelry customers to interact both with prototypes of particular jewelry designs as well as with designers and marketers. “We’re delivering full-size, customized, 3D-printed plastic models of inventory to our customers, which gives them the opportunity to interact with a piece before they buy it,” says Chloe Alpert, CEO of Teaman.
Finally, the fifth Foundry company, NRspeak, is developing a wearable device that will measure users’ brain activity to allow for seamless interaction with electronic devices. Unlike most current brain-machine interfaces, which employ EEG technology, this device uses infrared light and patent-pending algorithms to measure neural activity. Clinical applications could help paralyzed patients to operate wheelchairs or prosthetic limbs. Beyond that, the device could be employed as a user interface for almost anything from cursors to heavy equipment. If a machine can be operated electronically, it could be driven directly with neural commands interpreted by NRSpeak’s product.
Unlike other Bay Area high-tech start-up incubators, The Foundry focuses on developing smart things, products that are combinations of hardware and software. “We are not after the next hot mobile social app,” says Scaglia. “Plenty of other groups are doing that. We felt there was an impending need for intelligent product companies. These companies are harder to incubate. Things take longer. The investment community is still struggling with them. But everyone understands that they are the next wave—see how much Nest was bought for [$3.2 billion]—but no one knows exactly how it is going to play out.”
“We designed The Foundry with this in mind,” says Scaglia. “Intelligent products; that’s the CITRIS brand.”