Red Labs Boosts New Startup Culture at University of Houston
Hesam Panahi has spent nearly all his academic life at the University of Houston. As both an undergrad and graduate management and information systems student, he attended classes in the same building that housed the school’s entrepreneurship program—and still never knew it existed.
“We’ve had this program since ’94 and I just found out about it two or three years ago,” says Panahi, who is now a clinical assistant professor at the university’s C.T. Bauer School of Business. It’s a startling piece of information to know about the guy whose idea it was to open the university’s first startup accelerator, Red Labs.
However surprising, it does speak to the silos prevalent in academia in general and, more specifically, to Houston’s reputation as a commuter school. “U of H has 40,000 students,” he says. “I didn’t talk to anyone outside my class until senior year.”
Certainly, the presence of Red Labs, which hosted its first class of student-entrepreneurs this past spring, is an indication that things are evolving. Its Cyvia and Melvyn Wolff Center for Entrepreneurship was ranked third among the nation’s undergraduate entrepreneurship programs by Princeton Review and Entrepreneur magazine last year.
Panahi says he realized there was an opportunity to leverage that recognition. “We have 3-Day Startup, which is great,” he says, of the program he founded where groups of students get mentoring and assistance to create tech startups in one weekend. “But what happens Monday morning? How do we kick-start that energy; how do you keep that momentum going?”
He added: “I would have students coming into my office, saying, ‘I have this idea. I don’t know what to do.’ ”
When Panahi started having that conversation 10 times in a week—and most often with students who were not entrepreneurship majors—he came up with Red Labs. He laughs, saying, “The whole accelerator trend is … trendy.”
But his boss, Latha Ramchand, the Bauer school dean, signed off and gave the fledgling accelerator funds and support. Last year, an underused MBA lounge became the accelerator’s physical home on campus and, by this past February, a dozen student-founders had joined the accelerator.
Among the six startups are Flinger.co, a Web service that enables users to control the TV remote from laptops, smartphones, or tablets, and VocaLesson, which aims to connect voice teachers with students for lessons over the Internet.
Panahi’s hunch that a wider group of students was hungry to be part of a startup seems to have panned out. Only three of the dozen students in Red Labs’ inaugural class are enrolled in entrepreneurship as a major.
He understands where they are coming from. “I would’ve loved to do this,” he says of his undergrad days at Houston.
As a young teen growing up in the west Houston suburb of Sugarland, Panahi convinced his parents to allow him to start a hosting company out of his bedroom, charging multiple customers $30 a month for a static IP address that cost him $125 a month. He got customers but, more tellingly, he got hooked on having a startup. He went on to create what he calls an “Expedia of translations” with friends in college.
“I actually enjoy it a lot, and if I can help someone else do this, that’s great,” he says. “I’ve had students who get a consulting job making $70,000 a year but they are delaying their start day because they want to do [startups] for a while.”
Panahi says he is focused on making sure Red Labs isn’t trapped in the Ivory Tower, and he’s forged partnerships with the city’s other incubators, accelerators, and co-working spaces.
He sees Red Labs as a transition for budding entrepreneurs, and a bridge to other programs that could support their ideas on the way to commercialization. One of the startups is applying to the new program at TechStars Austin, while another is seeking to join the energy-focused Surge accelerator in Houston.
Aziz Gilani, a director at the venture capital fund Mercury Fund in Houston, is among the real-life experts that Panahi has recruited as a mentor. “I regularly visit Red Labs and love working with the students,” he says.
Gilani has watched that the university’s startup evolution firsthand. When he first came to Houston five years ago, he made it a point to chat with the various organizations that were part of the city’s startup ecosystem.
For whatever reason, Gilani says he couldn’t get a response back from the University of Houston. “I would send over emails and no one would reply,” he recalled. “I finally drove over to U of H one day and introduced myself to the entrepreneurship center, and they asked me, ‘What is a venture capitalist?’ ”
A look of disbelief had spread across Gilani’s face. “They’ve really come a long way since then,” he says. “Hesam has a lot to do with that.”