Cross-Border Innovation Groups Establish Manufacturing Accelerator

An effort to strengthen San Diego’s tech startup community by working more closely with the innovation ecosystem in Tijuana has led to the formation of HardTech Labs, a cross-border accelerator program intended to give startup founders access to low-cost manufacturing.

HardTech Labs would initially operate as a kind of virtual umbrella group to help entrepreneurs shape their early stage startup ideas and business models, create prototype products, and move to full-scale manufacturing.

The participants on the U.S. side of the border include the Ansir Innovation Center, a San Diego tech startup incubator; FabLab San Diego; the Co-Merge Workplace in downtown San Diego; and Origo Ventures, a venture fund established in the San Diego region just over two years ago. Participants in Baja California include the Ignitus innovation program developed by the Tijuana Economic Development Corp. and MINK Global, a legal and technical consulting firm in Tijuana.

“I’ve been propounding this idea for awhile,” said Ping Wang, founder and managing partner of the Ansir Innovation Center. “I’m glad it’s finally getting traction.”

As an example of what could be accomplished with a hardware incubator, Wang cited AirDroids, a San Diego startup that raised $929,212 from a Kickstarter campaign that ended March 8. Most of the 1,946 contributions were pre-orders for the Pocket Drone, a tri-copter powerful enough to carry a small, GoPro-type camera aloft—yet small enough to fold into a 7-inch long neoprene carrying case.

FabLab San Diego

FabLab San Diego

“The development of rapid prototyping and software development are needed in San Diego in a big way,” says Robert Reyes, who has supported the effort as founding CEO of San Diego’s StartupCircle and a partner with the Plug and Play startup accelerator program in the city.

The Ansir Innovation Center has the kind of equipment that startups like AirDroids need to streamline their design and prototyping, enabling them to work through many prototype versions, Wang said.

“The idea is that this [Ansir] would be the initial garage, as it were,” he explained. FabLab, which put on San Diego’s first Mini Maker Faire last year, is housed in the Ansir Innovation Center, so “We have a laser cutter, 3-D printers, and electronics lab benches,” Wang added. Co-Merge offers more of a front-office workspace. And after a startup has completed its final product design, Wang said the HardTech Labs program would help connect the company with a manufacturer in Tijuana or Otay Mesa, the industrial park along the San Diego side of the border.

Derek Footer, a HardTech Labs co-founder who is managing partner of Origo Ventures, said he’s been working to get local manufacturers to discount their manufacturing costs in exchange for an ownership stake in HardTech’s startups. Origo would provide equity funding to startups admitted into the HardTech Labs accelerator. Manufacturers, which contend with short production runs for regular customers, see the program as a way to fill some of their unused capacity and gain new customers.

Co-Merge San Diego

Co-Merge San Diego

Manufacturers in Tijuana have established their expertise in such industries as medical devices, aerospace, electronics, and HardTech Labs’ co-founders said they plan to focus primarily on consumer products, medical devices, and robotics.

“We’re starting with a bi-national startup community in Tijuana and San Diego, but we can interface with Asia, Taiwan, and more,” says Wang. He tells me he visited and studied San Francisco’s Lemnos Labs, Haxlr8r, and Highway 1—and says all have focused on manufacturing products in China.

Wang sees advantages in working with manufacturers in Mexico, because they are closer and that makes it easier to get feedback about design and engineering changes that would make products easier to produce.

Wang earned a doctorate in neuroscience at UC San Diego, and was doing research in neural networks and brain computation at the Salk Institute before starting the Ansir Innovation Center in late 2010. His family owns a small consumer electronics manufacturer in Tijuana, and he speaks Spanish, Mandarin Chinese, Japanese, and Taiwanese.

In a statement today, Flavio Olivieri of the Tijuana Economic Development Corp. says, “HardTech Labs is providing a bridge between San Diego and Tijuana that offers great promise” by combining the development skills of San Diego with the implementation prowess of Tijuana.

The sustainable advantage of the cross-border ecosystem in San Diego and Baja includes high-level software engineers, strong biomedical research and development centers, and a cluster of businesses that specialize in manufacturing and assembly, Footer says. As a result, he says, startup companies could greatly reduce their costs and time-to-market in half.

Footer says Origo could provide as much as $150,000 in upfront startup funding, most likely as a loan that could be converted to an ownership stake, and up to $300,000 more when the company exits the HardTech program. The accelerator plans to admit 10 startups for its inaugural class, but Footer says after a couple of years, the program could be graduating as many as 30 companies a year.

“We’re really trying to take advantage of the strengths on both sides of the border here,” Footer says. He tells me he wants to raise a $20 million venture fund just for HardTech startups by September 1, when the first class of startup companies is expected to begin.

Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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3 responses to “Cross-Border Innovation Groups Establish Manufacturing Accelerator”

  1. pingthink says:

    Thanks, Bruce, for the article shedding light on the program. To just add a few remarks, there have been a *lot* of community members who have been not just propounding this but building it from the ground up, including Katie Rast and the Fab team (Allen, Lucy, Nigel) who have been building a prototyping incubator from the ground up within FablabSD, and to which I am proud to support.

  2. Sean OSullivan says:

    Good luck in getting the program off the ground, HardTech! Sounds like you guys have a chance…

    At Haxlr8r, we *do* encourage our startups to make the most of the assembly and low-cost supply of goods in China. A bigger part of it, though, are all the supply chain issues, and the rapid turnaround and prototyping facilities which startups benefit from by being in “hardware central”, the manufacturing center of the world for electronics — Shenzhen, China.

    In ten or twenty years, we hope to see more of this available in other places… not just Mexico, but also in the mainland United States itself. It can happen.

    Good luck.

    • pingthink says:

      Hi Sean, although the focus of this article was primarily on the possibilities that our close connections in Mexico can add:

      1) We also have connections and capabilities in Greater China / Taiwan,etc, so Mexico is additive, and not necessarily “in place of” those capabilities, depending on the project needs.

      2) Our basic thesis is that there are advantages to the binational border such as time to market, R&D flow, IP protection, assembly efficiencies, tax advantages, market co-location, cultural synergies, and much much more that have not been fully explored or appreciated before in the entrepreneurial hardware innovation world. (although there is a buzz about it, such as via Chris Anderson’s 3D Robotics, etc..)

      BTW – Haxl8r is great, I really enjoyed demo day in SF and I hope that we serve as able compliments to each other and perhaps find synergies. It is an inspirational model. Keep up the good work!