The Urban-X Accelerator Model for ‘Engineering the City-as-a-Service’ & Smart Cities Startups

Urban-X focuses on spurring the growth of civic tech startups focused on making cities more livable, smarter, safer and efficient.

Cities deal with lots of problems. There’s no question that an increasing number of cities must mitigate the issues that pertain to handling density, transportation, waste management, climate change and energy consumption. At any given time in an urban area, there’s tons of commotion happening all at the same time. People are running around, using transportation, gathering in public spaces, generating waste, straining the infrastructure, sitting in skyscrapers, taking selfies in front of the skylines, buying and selling things in markets and busy being humans. One could say it’s fairly chaotic. However, as some forward-thinking businesses know, there’s opportunity in chaos.

The problems facing cities across the world vary both in scope and level of urgency. Indeed, the path to a sustainable future is through technology. Big payoffs can come to those pioneering cities of the future and working to solve real problems around hyper growth in urban areas.

“We think that every city will be a platform upon which the tools of the metropolis will be built,” says Micah Kotch, Managing Director of Urban-X, a venture accelerator focused on Smart City Startups.

“We recognize that the city is changing dramatically. As we think about that, what we are interested in doing is empowering people to live better, more vibrant lives in cities. The path to get there requires multiple stakeholders, which is what makes a lot of this work complicated and challenging.”

Urban-X is a new partnership between MINI and HAX (part of SOSV) to catalyze the operations, educate the founders, invest in the potential, and advocate for select startups shaping the future of cities through technology.

The joint venture makes a lot of sense.

Legends.

MINI is a quintessentially urban brand with deep expertise in design, engineering, technology, and usability. HAX is the premier accelerator for hardware and connected devices startups.

The prolific program has conducted accelerators in numerous cities like Boston, Shenzhen and San Francisco, and Schauernheim and manages around $250 million of assets. With this new initiative, together the firms support entrepreneurs who bring new solutions to market that are going to help improve people’s lives in cities.

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The first nine companies in the flagship cohort set out to tackle areas like big data and analytics for city planning, transportation, last-mile mobility, food waste, and urban agriculture issues. The problems that need solving are plentiful.

“We’re looking at big problems that need to be solved around how cities move forward in the 21st century.”

As the applications flow into the program. It’s important to remember that capturing value is a team effort. When combined with the right resources and right thinking anything can happen. Kotch says:

“As data, information, and communications technology infrastructure converge, it’s the sectors like public safety and security, distributed energy solutions, and the need for adaptation and mitigation of climate issues that create tremendous amounts of opportunity.”

“Also, solutions to these problems are a real need for people who are living in cities, and we believe that the best way to meet those needs and come up with the solutions that we need within the fastest time frame is through the mechanism of startups.”

The program offers massive value to the companies within the SOSV / MINI portfolio. What’s more beneficial than three months of intensive programming and mentorship, business development, and product engineering support from world-class designers and engineers at MINI and HAX?

Throughout this program, the management team puts consistent effort into the portfolio companies. This is because they want to act quick and make a real impact. Not only do the accepted applicants receive a $60,000 seed capital investment with significant in-kind software, hosting, and legal services. The program brings deep experience to understanding hardware technology as HAX has some great services around helping with electrical system design and prototype development, understanding supply chains. MINI, too, brings top-notch engineering and design expertise.

Entrepreneurial teams travel to Munich to spend time with engineers from MINI in Munich, and then and to Shenzhen, China, to understand what the process of bringing hardware products to market entails. Founders get an education in product development and industrial design. This 360-degree immersion provides access to the people in their network who are the industrial designers and embedded logical systems engineers building advanced systems. These individuals are spending day-to-day with the companies over the course of the four months.

The mentors assist in thinking through all the different elements, the revenue model, value propositions, cost structures, partnership strategies, go to market strategies that are essential for startups to understand and get right.

Further, Urban-X provides a strong ability to work in customer development by emphasizing the process of customer discovery, customer development, understanding customer acquisition costs and strategies, following “Get — Keep — Grow” strategies. They help build relationships with investors who understand this space. In some cases those are angels. In other cases, those are institutional sources of venture capital.

Though, sometimes finding product market fit leads to pivoting as there can be big obstacles.

Kotch says:

“The solution to bring a new product to market is not always straightforward. In some cases, the channel is the city itself, the municipal government. In other situations, it is something like the local distribution utility. In some circumstances, it’s a big enterprise. Alternatively, there are cases where it might be direct-to-consumer.

“It’s not a one-size-fits-all path for many entrepreneurs, and they can struggle with that. To the extent that we can offer some value in terms of helping them bring a better product to market faster, that is a core part of our mission.”

Each company has its own set of issues and logistics it must overcome to achieve product-market fit.

“Many hardware companies tend to be very product centric. Tapping into that deeper vision around thinking about what is the more universal or more scalable or repeatable need. The goal is to build the business around that, and that’s where we push. That’s why we’re so excited to invest in 20 companies a year.”

Portfolio:

Some of the companies launched in the first round included:

Numina by CTY: is a business that provides real-time insights from streets for more responsive cities. Numina, CTY’s flagship product, is analytics for places. The product delivers real-time insights from streets using robust, wireless sensors pattern recognition technology. It counts measures movement of anything you can see. It then provides actionable insights for public safety and health, infrastructure design, commercial development, and multiple other applications.
Farmshelf: creates modular urban farms that enable anyone to grow nutritious food with easy-to-use hydroponic urban farms for educational institutions, residential buildings, and under-utilized urban areas. Through its urban farming system customers can grow produce with minimal effort using a soilless culture.
Industrial / Organic: changes the game by providing an efficient and sustainable landfill alternative which is designed to recycle organic waste. It is a mechanized system to recycle organic waste in facilities that are scalable and turnkey. Their first product is a microbial soil component which for use in agriculture. Its feedstock derived from a clean process that is low in both odor and emissions.
Buzzware is a company working to create the infrastructure and a network for charging commercial drones.

This sampling of firms demonstrates the variety of enterprises that are paving the way to industries of the future, as well as the future of big industry.

Now, as the companies in next cohort apply to the program and get chosen, the questions are: what does the future hold for civic tech initiatives and what technologies look promising in the quest for securing wide scale adoption? Kotch says:

“There’s a whole lot of low-hanging fruit for capturing value and where improvements are needed.”

Some industries that are ripe for scale and disruption include public safety and security, which is a major concern for modern cities; transportation and traffic management; food and urban agriculture; distributed energy solutions; and the need for resiliency in light of more extreme weather events.

Waste and water infrastructure is a passion point for Kotch; he says:

“Even in parts of America, the infrastructure is questionable. Even in this country, there are water lines that still have wooden pipes in sections of that infrastructure. There are places here in New York, believe it or not, where the electrical lines that are currently in service were installed by Thomas Edison.”

Success is of course not guaranteed, but new cottage industries and a wealth of new concepts get formed every day with technology advancing so rapidly. There are many permutations of how the market could react and if capital can foster the right companies.

“We are excited about this shift towards mobility, and both shared services and autonomous services. Thinking about the second-order opportunities that those technology shifts will bring is rich with opportunity for value creation. It’s a pretty wide space.”

Looking Forward

“We are doing this in New York City for a reason. It is the epitome of a megacity. It has the largest population of any US city. Arguably, it is the most efficient and has taken the most steps to embrace a smart city and sustainable agenda.”

Within the project, many smart individuals are working to make the urban experience more tolerable and efficient.

“You have a shift in mindset for policy makers and for regulators, people who are writing the laws, people who are doing things like pushing open data, that creates a market pull.”

“New York continues to attract smart, creative people to work on some of our biggest problems. The important thing to remember about New York is that it’s been built with the skills and creativity of generations of immigrants and immigrant entrepreneurs. Half of our class in first cohort was from outside of the US.”

“It’s important for us to look beyond our borders to attract the best and the brightest from all around the world to come and experience New York, do business in New York, and bring their product to life in New York. From an ambition perspective, we want great talent to come here and build their companies here.”

With an outstanding roster of talent from people who have commercialized technology, who brought new products to market, who worked in government, who sold to both the private sector and to the government — who are thinking about business model innovation in this space. The two organizations (Hax and MINI) obviously see urban areas as the new fertile ground for building companies, products, and services that will usher society into the future.

“We are excited about some of the things that we’re seeing. We’re looking for people who can help solve the big problems that we have today in cities, and we’ll likely continue to experience tomorrow.”

Applications are open now for the second cohort, which kicks off in October. Founders can apply here by September 6th.