Milken Institute1h 14m
Made in California: Presentations from California Grown Startups
Dorothy Rothrock, Ian Coll McEachern, Gordon Fowler, Gabe Grifoni, Susie Harborth, Stella Kramer, Carmen Palafox, Dolly Singh, Ken Sunshine
Breakout Session, Panel, Conference Presentation, Statement, Fireside Chat
Panel Overview: Ecosystem Trends and Challenges
- Panel Composition: The session features leaders from Make in LA, The Glue Factory, and BioLabs San Diego, focusing on advising startups in manufacturing, biotech, and frontier technologies.
- Workforce Gap: A significant disconnect exists between the abundance of academic talent in California and the lack of skilled workers trained for specific high-paying manufacturing and biotech roles.
- Recruitment Strategy: To fill the skilled labor gap, sector leaders anticipate necessity in recruiting talent from outside California and potentially outside the United States.
- Entrepreneurial Mindset Shift: There is a move away from the "garage entrepreneur" myth toward sustainable business models that integrate community service and quality of life, with The Glue Factory requiring mandatory volunteerism from participants.
- Access vs. Networking: Modern startups prioritize "access" (connections to contacts and specific resources) over traditional networking events, demanding flexible scheduling (outside 9-5) and immediate tangible value from membership organizations.
- Incubator Growth: Sacramento has seen a 19-fold increase in maker spaces and incubators, rising from 5 to 95 facilities over the last four to five years.
- Technology Convergence: Startups increasingly feature "hardware-enabled" software, merging IoT, robotics, and frontier tech (e.g., emotion-tracking wearables, ultrasound touch) rather than pure software or pure hardware.
- Capital Fragmentation: Convergent technologies (e.g., IoT + Life Sciences) struggle to secure funding due to a lack of specialized investors who understand both domains, creating a gap between internet-focused and life science-focused capital.
- Cost Myth Busting: The panel asserts that hardware manufacturing is no longer prohibitively capital-intensive, citing 35,000-square-foot facilities with $2 million in prototyping equipment as enablers for startups to compete with large corporations.
- Solopreneurship Void: A scan of the state revealed zero incubators or accelerators specifically focused on "solopreneurship," despite predictions that over half the US workforce will be remote by 2020.
- Regional Trends:
- Sacramento: Significant activity in ag-tech driven by UC Davis research programs.
- Southern California: A surge in biotech, genomics, and aerospace, with a specific focus on curing disease and personalized medicine.
Startup Presentations: Case Studies and Metrics
Thesis Couture (Fashion Hardware)
- Market Strategy: Aiming to become the "Nike of fashion footwear" by applying aerospace engineering principles (first principles thinking) to the $40 billion high heel industry.
- Technology: Developed the "Thesis Lift," replacing compressed cardboard shanks with advanced engineering to distribute body weight (reducing load on the balls of the feet from 80% to 55%) for a wedge-like feel in four-inch stilettos.
- Business Model: A dual-track strategy starting with direct-to-consumer (B2C) limited runs for validation, followed by white-labeling and licensing the technology to existing fashion brands (B2B) at premium price points.
- Team Composition: Recruited three engineering PhDs, an orthopedic surgeon, and advanced manufacturing experts to bridge the gap between design and complex engineering.
Open Agriculture Supply (Ag-Tech/Hardware)
- Core Product: Kits for "food computers" (open-source, controlled-environment agriculture devices) based on MIT's Open Agriculture Initiative platform.
- Pricing Structure: Offers a full MIT-based kit for $4,800 and a Minimum Viable Product (MVP) kit for $300 designed to reduce costs and drive adoption.
- Growth Metrics: Sales increased by 3,000% year-over-year in 2017, with 23 customers across eight countries, up from zero sales in 2016.
- Future Goals: Targeting a 300% sales increase in 2018 and expanding to 50 customers; plans to develop finished, UL-listed consumer products available via retail.
- Applications: Used for educational purposes, scientific testing (including NASA microgravity experiments), and enabling local food production in drought-stricken or food-insecure regions.
Sangenomics (Biotech/Personalized Medicine)
- Mission: To cure "dysbiosis" (microbial imbalance causing autoimmune and metabolic diseases) by 2020 using precision probiotics.
- Market Problem: Identified that 85% of consumer probiotic products fail to survive the gastrointestinal system; the industry lacks regulation and efficacy verification.
- Solution: Combines gut microbiome sequencing with microbial profiling to create personalized formulas matched to individual DNA signatures.
- Service Model: Subscription-based testing and treatment at $450 for one test and three months of formula (approx. $150/month).
- Scaling Plan: Aiming to reduce manufacturing time per formula from four hours to 10–15 minutes and consolidate 50 potential formulations into 20 standardized groups.
Rufus Labs (Enterprise Wearables)
- Product: Ruggedized wearable technology for warehouse and logistics operators, replacing heavy handheld scanners with under-8-ounce devices.
- Cost Advantage: Hardware costs significantly less than competitors (Symbol/Zebra), targeting a shift from capital expense to operational expense via software integration.
- Software Focus: Treats every worker as a network node for real-time data, haptic safety alerts (e.g., forklift proximity), and throughput tracking.
- Development Cycle: Utilizes local California prototyping to iterate designs in 3–4 hours, contrasting with weeks of delay and travel costs associated with overseas manufacturing.
Vector Space Systems (Aerospace)
- Market Opportunity: Aiming to capitalize on a new space race where more small satellites will launch in the next five years than in the previous 50 combined.
- Vehicle Specs: Developing small, dedicated launch vehicles (Vector R and H) to lift 60–150 kg to orbit, contrasting with large, multi-million dollar traditional rockets.
- Cost Model: Charging $1.5 million to $3 million per launch with a target frequency of 125–200 launches annually, relying on volume rather than high per-flight revenue.
- Current Status: Raised over $30 million in Series A funding (led by Sequoia Capital); secured contracts from NASA and DARPA; maintaining a $1.5 billion sales pipeline.
- Launch Infrastructure: Utilizing mobile launch platforms in California deserts (Mojave) and Vandenberg to avoid the high infrastructure costs of traditional spaceports.
- Test Results: Successfully completed low-altitude test flights in the current year with no payload, validating technology ahead of the first commercial orbital flight scheduled for mid-next year.