Seattle Week in Review: Don’t Sleep on These Techstars

This week, we’re reviewing the latest batch of startups to emerge from Techstars Seattle; an ambitious renewable energy commitment from Microsoft; an artificial intelligence-powered legal research assistant; top stories from around Xconomy’s network on mobility, enterprise search, and entrepreneurship education at MIT; and a dire warning about earthquake safety for those living and working in unreinforced masonry buildings. Plus, a bonus week in preview of a planned visit to Seattle from the White House Office of Science and Technology Policy that will focus on AI policy and law.

Techstars Seattle showcased nine startups working on everything from satellite communication networks to drone-driven forestry. Local observers, including startup veteran and Techstars mentor Marcelo Calbucci, were impressed. “Over the last seven years of Techstars Seattle, I can say this is the best batch of all,” Calbucci writes.

Techstars has tweaked its demo day program, giving accredited investors a private look at the companies earlier in the day, followed by a “demo night” public program Wednesday night at the Museum of History and Industry. It has a different feeling than in years past, when founders finished their pitches with juicy details about oversubscribed funding rounds. The sense that the real action—and opportunity to invest—already happened may have contributed to a more subdued vibe.

Seattle chef Thierry Rautureau, in his trademark hat, gently chided the crowd after a lackluster greeting. “You guys are asleep,” he said, before launching into his introduction of Validated.

That didn’t seem to deter any of the presenters, and there were plenty of loud, enthusiastic cheers.

The Techstars Seattle class of 2016.

The Techstars Seattle class of 2016.

The presenting founders—all of whom were men—come out of three months of Techstars with real business momentum and polished pitches. And perhaps their revenue and growth numbers should hold greater interest than the amounts of venture capital they’re raising. In any case, their presentations were loaded with memorable one-liners, audacity, and inspiration. A few highlights:

“Think of it as free shipping for yourself,” said Validated CEO Tov Arneson, describing the company’s system that enables bricks-and-mortar retailers and restaurants to pay for their customers’ parking, Lyft, or Uber.

Rautureau gave the business-owner’s perspective: “I win because I get you as a customer, and I’m giving you some points for your transportation, so you can get drunk in my restaurant, and I put you in Uber or Lyft, and you go home happy, and you remember that, so you come back.”

Kepler Communications has one of the more ambitious aims of any Techstars Seattle company I’ve seen. “Our vision is to become the sole telecommunications provider,” said Mina Mitry, co-founder and CEO, describing Kepler’s planned cluster of communications satellites to enable real-time data links to space. “Anything that leaves the surface of the Earth, going between here and Mars, will use our infrastructure and our network to communicate with each other and with the ground in real time.”

Fig Loans co-founder and CEO Jeff Zhou said the payday lending industry his company is trying to disrupt “strip mines their customers.” Fig is approaching the enormous market of Americans underserved by traditional banks with a goal of capturing them as a lifetime customer and building their financial health, rather than focusing on short-term profit from high-interest payday loans.

You can’t help but root for a mission-driven startup like Fig.

There are six other companies from this class worthy of your attention.

—Microsoft (NASDAQ: MSFT) aims to source more than half of the electricity used in the data centers that power its online services from wind, solar, and hydropower by 2018, and reach 60 percent renewable electricity by the early 2020s. The company today gets about 44 percent of its electricity from these sources, according to a blog post this week from Brad Smith, Microsoft president and chief legal officer.

“Across the tech sector we need to recognize that datacenters will rank by the middle of the next decade among the large users of electrical power on the planet,” Smith writes. “We need to keep working on a sustained basis to build and operate greener data centers that will serve the world well.”

By directly purchasing renewable energy, and purchasing renewable energy certificates to offset carbon emissions from its operations powered by fossil fuels, Microsoft has been carbon neutral in its electricity consumption since 2014, Smith writes. The company was a pioneer among large enterprises in charging its business units a fee for their carbon emissions.

Smith outlines other specific commitments Microsoft is making to buy renewable energy and support it through public policy advocacy, research and development, and investment.

—Seattle’s prowess in machine learning and artificial intelligence will be in the national spotlight next week when the White House Office of Science and Technology Policy rolls into town for the first of four events focused on the burgeoning, complex field. University of Washington’s School of Law and Tech Policy lab are co-hosting the event, which is free and open to the public. A live stream is also planned for those who cannot attend.

Oren Etzioni, CEO of the Allen Institute for Artificial Intelligence, speaks at Xconomy's Seattle 2035 conference.

Oren Etzioni, CEO of the Allen Institute for Artificial Intelligence, speaks at Xconomy’s Seattle 2035 conference.

The agenda features Oren Etzioni, CEO of the Allen Institute for Artificial Intelligence, and other top thinkers on technology, policy, and law. Panel discussions focus on the legal and ethical issues of AI systems that make decisions that could impact citizens, and ways to assess AI systems, as well as government regulation of “safe and sustainable AI.”

—Speaking of AI and the law, earlier this month, a law firm announced it had hired an AI lawyer—technically an “artificial intelligence legal research product”—to assist with its bankruptcy practice. The firm, BakerHostetler, is a giant, and the AI attorney is Ross, built atop IBM Watson by a Y Combinator startup called ROSS Intelligence.

“You ask your questions in plain English, as you would a colleague, and ROSS then reads through the entire body of law and returns a cited answer and topical readings from legislation, case law and secondary sources to get you up-to-speed quickly,” according to the company’s description. “In addition, ROSS monitors the law around the clock to notify you of new court decisions that can affect your case.”

—Check out our profile this week of early stage venture capital firm Voyager Capital, which funded two companies acquired last year in two of the Northwest’s biggest VC exits.

—Other highlights from around the Xconomy network:

From our Detroit bureau, the North American International Auto Show next year will focus on mobility, an industry buzzword that emphasizes getting people and things from here to there, regardless of the mode of transportation. That’s also the focus of the Techstars Mobility startup accelerator in the Motor City.

From the Bay Area, a $50 million funding round for ThoughtSpot, which makes a search engine for businesses to use on their massive and growing troves of internal data.

From Boston, an in-depth look at efforts to support entrepreneurs at Massachusetts Institute of Technology. It’s great context as universities around the country—including University of Washington—change how they teach students and faculty increasingly focused on entrepreneurship.

—When I ask people around here about the biggest threat facing the booming tech economy, few of them say a mega earthquake, like the one we’re overdue for. I don’t know if this is due to humans’ difficulty planning for things that unfold on a geologic timescale, a deer-in-the-headlights kind of denial, or what. (My own earthquake preparedness kit has been in the planning phase for years now. Got to get on it.)

The New Yorker’s terrifying exploration of the destruction a full-rip Cascadia subduction zone earthquake would reap in the region opened eyes—though people around here should have known most of the details already—and won the Pulitzer Prize. But not enough is being done to prepare. The Seattle Times has begun a continuing series called “Seismic Neglect: The earthquake nightmare public officials are failing to confront”. The first in-depth installment focuses on the danger of unreinforced brick buildings that are the worst place to be when the “really big one” strikes.

Times reporters Daniel Gilbert and Sandi Doughton write: “Washington lawmakers were warned decades ago about the dangers of this construction, called unreinforced masonry, by the state Seismic Safety Council. But they haven’t passed a law to tame the threat, as California did in 1986. They haven’t come up with public financing options for businesses to do seismic retrofits, as Oregon legislators did last year. Local governments have done neither.”

If you’re at a startup, enjoying that attractive exposed brick wall, you might want to review this list of unreinforced masonry buildings and make sure you’ve got room under your standing desk.

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