After just a four-week recruitment period, the city of Sacramento received 142 applications for $1.5 million in innovation grants that Mayor Kevin Johnson and the City Council hope will provide a catalyst for the growth of technology startups in the region.
Abhi Nemani, the city’s chief innovation officer, said that competition is serious and substantial for money earmarked to provide resources and training for local startups.
Nemani helped to launch, build and run the nonprofit Code for America, and that organization started a program in which it asked startup technology companies to apply for acceleration funding. They received 200 applications from a national field of candidates after a two-month recruitment period, he said, and about 80 percent of them were throwaways – not complete, not serious, not significant.
Nemani told me that he has read every single one of the Sacramento applications and that it would be hard to describe any of them as throwaway.
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“It’s remarkable to see all the different kinds of things that are happening in Sacramento,” he said. “We had a robotic training program apply. There was a medical innovation acceleration program, a biotech innovation program, training for people on how to code for iOS or Apple applications. It very much spans the gamut. It’s really remarkable in terms of the depth and range.”
The diversity of the applicants can be seen in just two companies: a 7-month-old startup called California Clips that was born out of an architect’s desire to conserve water amid the drought and Party Concierge, a company that readers may recall formed 22 years ago after self-proclaimed Balloon Lady Susan Austin married the Ice Man, Lawrence Crane.
Architect Daniel Tran launched sales of California Clips last December, and since then, he’s sold 1,300 devices online at californiaclips.com and at the Oak Park farmers market. Tran’s product clips to the plumbing inside the toilet tank and regulates just how much water goes into the bowl. Nationally, Tran said, 168 million toilets waste 1 billion gallons of water due to excess refill in toilet bowls.
“Most valves ... direct water to both the bowl and the tank after you pull the handle,” Tran explained, “and in most instances, they’re not calibrated. They send an equal amount of water to the tank and the bowl because they don’t stop until the tank is filled, and because the bowl is smaller and open-ended. That’s what results in the excess fill and water waste.”
Tran thinks he could sell many more of the devices if he were able to better market his product with website improvements, video and direct marketing. He’s asking public officials for $20,000 to expand sales in a state that has stressed water conservation. With this funding, Tran said, he believes he can retrofit 50,000 toilets around Sacramento County, recovering an estimated 50 million gallons of water.
Party Concierge’s Susan Crane sees the city’s grant program, known as Rapid Acceleration, Innovation & Leadership in Sacramento, as an opportunity to leverage her team’s knowledge of robotics and manufacturing to educate others around the region in microfabrication.
“People don’t think of us as having much technology,” Crane said, “but we have so much.”
The Cranes depend on computers, software and a number of pricey gadgets to create the elaborate pieces (think life-size foam or ice sculptures) they make for party sets. To cut polystyrene, they use a computerized hot-wire foam cutter. A computer-controlled cutting board helps with other materials. Lawrence Crane carves ice with the help of a robot, but he had to travel all around the country for classes to learn how to use it.
The couple are seeking $184,450 to establish a training center at their headquarters in Sacramento’s River District to teach others in the region how to operate the software and equipment. Susan said they want to hire some trainers but also harness the expertise of manufacturers such as Robotic Solutions and software maker Delcam.
Nemani said that he has some favorites among the applications but that he won’t be on the panel making the decisions on which applications go to the Sacramento City Council for approval.
“The way it works is that the Mayor’s Office of Innovation and the Economic Development Department, which are the two departments organizing the innovation fund or administering the innovation fund, do a first pass to basically figure out which ones are incomplete or ineligible,” Nemani said. “And then we take that subset of applications to the mayor’s tech council. ... They review all the applications that are remaining and rank them, and we go back and do the math in terms of how many of those we can fund. And then we present those to council at some point.”
Officials say the innovation grants should be awarded by the end of September. They expect to award money to about 10 percent of the applicants.
Nemani said he’s been impressed with how quickly Sacramento officials have moved forward with funding this project, as compared to a project he managed for the city of Los Angeles in 2014-15. “To put this in perspective, it took us about a year and a half to get (L.A.’s) innovation fund off the ground. We were able to do that here in about two months. So I think if you’re asking about the level of government engagement in innovation, it’s unparalleled.”
The ultimate goal, Nemani said, is to help diversify Sacramento’s economy. In addition to grants to local accelerators and entrepreneurs, Nemani hopes to see the city one day get into the venture capital business to retain and expand the startups. He and Johnson point to research from the Bay Area Economic Council Institute that shows 4.3 jobs are created in the larger economy for every position created in the local high-tech sector.
“Sacramento needs to diversify its economy,” Nemani said. “We’re overly reliant on the public sector for our economy right now, more so than almost any other capital in the country.”
As my colleague Anita Chabria reported on July 3, such ventures do not always work out because politics and goals collide. Despite those risks, cities all around the nation have tried similar strategies, hoping to score a technology success story.