Sheryll Poe  | January 22, 2014

Shootout in Austin: Startups are Raring to Take on Major Challenges

The Texas sun is dipping below the horizon, setting the 16th floor of this Austin skyscraper ablaze.

Twenty-eight startups from all over the region have been working on their quick-draw one-minute pitches all day.

Now, in the moments before the Challenge Cup pitch competition begins, the startups are circling each other warily—a process made easier by the circular layout of Austin-based incubator and Challenge Cup host, Capital Factory.

The sound of boot heels ring out across the concrete floors, echoing off the corrugated tin accent walls. In the kitchen area, nervous competitors grab handfuls of M&Ms from the open glass jars—candy courage is the order of the evening.

Produced by Washington, D.C.-based incubator 1776, the Challenge Cup is a global competition to identify and celebrate the most promising startups tackling the biggest challenges in education, energy, health care, and smart cities industries.

When the dust settled in Austin that night, only four pitch-slingers were left standing while their cowpoke competitors were left clutching their hats and strolling off into the sunset. The four Austin startups will join their fellow city finalists in Washington, D.C. for a final showdown May 12-17.

Here are the Austin winners:

Aceable Founder and CEO Blake Garrett had the unenviable task of being the first startup to pitch. But being first proved lucky for this education category winner, which seeks to revolutionize online driver’s education courses by gamifying the course and creating a reward system. Aceable also plans to let students take courses from their mobile devices. Aceable, which is one of the approximately 40 companies participating in Capital Factory’s accelerator program, has submitted its first course to the state of Texas for approval and has raised $75,000 in funding to date.

Health care winner Spot on Sciences has been around for four years and has already received a two-year, $1 million Small Business Innovation Research grant from the Defense Advanced Research Projects Agency. The company’s HemaSpot technology allows anyone to take a blood sample in any location and ship or store the samples at room temperature for downstream analysis or point-of-care diagnostic testing. Jeanette Hill, founder and CEO of Spot On, explained how dried blood spot technology such as HemaSpot can replace traditional blood sampling. “You have to travel to the lab, and it’s really a big burden for people who are elderly or sick, or live in a rural or remote area.”

Keith Cole, CEO of Houston-based startup Titralyte, describes his Water Lens oilfield kit as “a product that turns roughnecks into chemists.” The Water Lens provides detailed analysis of water and other fluids used during the fracking process at oil and gas drilling sites. By placing a water sample into a tray filled with Water Lens’ specialized chemical formula, and then placing the tray in a machine equipped with software, anyone on the site can analyze the contents of the water, saving oil and gas companies millions of testing dollars. Cole says the company has already been engaged in pilot programs with leaders in the water testing space, including Omni Water Solutions Inc. and has had interest from major Texas oil companies. The company has raised over $2 million in funding from angel investors and venture capital.

The last pitch of the night came from smart cities winner Reaction.  Founder and CEO Michael McDaniel builds the Reaction Housing System, a rapid response, short-term emergency housing system that is flexible enough to meet any housing challenge. It is a kit of parts that primarily consists of housing units called Exos, accessories, and supporting infrastructure. The interior and exterior skins are made from a composite called Tegris, aka “poor man’s carbon fiber.” It is a super lightweight material that’s actually being used to armor vehicles for the military now and as air dams for NASCAR. The Reaction system offers a low-cost ($5,000 per unit), rapid response housing solution whether it is responding to the aftermath of an earthquake, wildfire, hurricane or manmade event. The company has seen huge demand—$400 million of inbound sales—before even bringing the product to market. “Reaction is so disruptive that has not only gotten the attention of FEMA, NASA, and Apple but we have visited all of them by invitation,” says McDaniel.

Check out more of our Challenge Cup coverage here.  Get more information on the competing startups at