Energy is a vital industry to the global economy, yet many of the basic practices to find, extract, and deliver oil and gas have not changed in decades. That situation has proven to be fertile ground for cleantech accelerator Surge and its startups.
Earlier this week, Surge’s third class made their debut in front of a packed audience of investors, entrepreneurs, and mentors at Houston’s House of Blues. The startup founders presented technologies that aim to digitize oilfield processes such as the maintenance of tens of thousands of stripper wells, calculate complex engineering questions in the cloud (and on multiple devices), and in using Big Data to more accurately locate new targets for oil exploration.
“Oil production in Texas has doubled since the early 1980s,” said Arshad Matin, president and CEO of Paradigm, which sells specialty software to oil and gas companies.
But because of the long slump in oil production from the late 1980s throughout the 1990s, energy employees are either “a few years from retirement or just out of college,” he added. “That gap [in the energy employment continuum] means software plays an important role in helping the industry make this transition.”
As younger workers become a larger part of the Oil Patch’s workforce, entrepreneurs like those at Surge are creating tools that incorporate the technologies those workers are used to in other parts of life. Francois Merer, sales and marketing manager for Seisquare, says the French company’s seismic mapping software “looks and feels like a video game.”
But instead of calling plays on the gridiron in Madden Football or causing mayhem in Grand Theft Auto, these players are seeking black gold deep beneath the earth’s surface.
Amar Pradhan, founder and CEO of New York-based 10Six, a smart grid software company, says its service is akin to a “AirBnB for batteries.” The startup can help customers make money from backup high-power batteries that normally sit idle, just like a homeowner renting out an unused room to make money.
Still, the entrepreneurs were mindful that the tools should be useful to industry veterans. SeeForge has developed what founder James McDonough calls a “fat-fingered app,” one easily used by hulking oil hands who “have fat fingers, not skinny ones like me.” The company moved to Houston from Perth, Australia.
Greg Archibald, founder and CEO of Greasebook in Oklahoma City, OK, showed an amusing video of grizzled and grey pumpers, or oil well maintenance workers, offering testimonials about Greasebook’s app and digital dashboard, which records and analyzes maintenance information gained onsite. “It has saved my life,” one man intoned, seriously.
Kirk Coburn, Surge’s founder and managing director, and an Xconomist, said incoming applications and the mix of each of the accelerator’s three classes has shown a new emphasis on energy hardware startups in addition to software firms.
“We’ve seen that Houston needs a hardware lab, a place where people can blow things up,” he said.
Indeed, one of the startups this year is Autonomous Marine Systems, which has developed what founder TJ Edwards calls a “satellite for the seas.” The startup has built a self-piloting catamaran that can measure wind, waves, currents, and can survey sea floors. “Most of this data is now acquired by satellite,” he said. “But satellites can’t look beneath the [ocean’s] surface or peer through clouds.”
As is typical for Surge, Wednesday’s demo day had a rock-concert feel, starting out with mimosas, bloody marys, and breakfast tacos for the assembled audience at 8 a.m. RedLabs founder and University of Houston business professor Hesam Panahi manned the turntable on stage, spinning tunes as DJ Surge. (No word yet on whether Panahi plans to take his show on the road.)
This year, the startups did not speak about their fund-raising campaigns, as many groups have chosen to do in light of solicitation rules in the JOBS act. “Are they raising money?” Coburn asked the audience. He paused with a look that seemed to say, “Duh!” without verbally elaborating.
He explained the accelerator’s decision on this by likening the US Securities and Exchange Commission to the folkloric Bigfoot, saying: “You don’t mess with Sasquatch.”