Exponential Impact’s second accelerator cohort kicks off with seven startups on board June 12 — the same day the XI Venture Center celebrates its official opening.
The startups — chosen from Colorado Springs, Denver and Colombia — will work in XI’s new 9,000-square-foot collaborative space, in the same sprawling North Nevada Avenue facility occupied by the National Cybersecurity Center.
XI, a nonprofit tech accelerator that focuses on blockchain, artificial intelligence and cybersecurity, selected this year’s cohort from 12 startups that attended the four-day XI Launch Camp retreat in the Colorado Rockies in April.
The 2019 cohort includes education technology company Brainitz (Colorado Springs); cybersecurity workforce development social enterprise Spark Mindset (Colorado Springs); SafeTalpa, which focuses on cyber-threat prevention for cloud providers (Colombia); cyberpunk-themed cryptocurrency trading game Cache (Colorado Springs); Carbos, a decentralized carbon marketplace (Denver); RootLo, an app for digital nomads (Colorado Springs); and MedRec, which focuses on innovative technologies for medical business management (Colorado Springs).
Over 14 weeks, XI’s accelerator program provides mentoring, seed funding and holistic leadership development for the startups, and XI Program Director Ethan Lavin said the XI Venture Center will change the way the cohort works.
“It’s nice having a physical space, having a home base where teams can really grow and thrive — really building that startup ecosystem,” he said. “We’re … showing how much you can support entrepreneurs and this program’s really going to be a testament to how we’ve grown from our humble beginnings.”
This week the Business Journal spoke with founders from Brainitz, RootLo and SafeTalpa about their businesses, their goals for the accelerator, and their paths to XI.
Bogota-based SafeTalpa got started when Esteban Vargas’ uncle’s company got cryptojacked. (A cryptojacking attack hides malware on a device and steals its computing resources to mine cryptocurrency.)
Vargas and SafeTalpa co-founder Juan Sanmiguel, both college undergrads at the time, had been working on a machine learning-based antivirus as a cybersecurity “hobby.” Vargas described it as “a beautiful technology, but not so good as a business” — but the cryptojacking attack changed all that.
“I’m a computer-savvy person, so my uncle asked me for some help,” Vargas recalled. “We decided to build a real quick solution for him, and built an anti-cryptojacking Chrome extension. So his company was our first customer.”
As they fine-tuned the extension and built their customer base, Vargas said, they discovered it isn’t actually the end user that suffers most when a cryptojacking script is deployed — it’s the cloud company providing the infrastructure.
“They suffer more because of the drain of their computational resources — and because once companies like banks discover that their cloud infrastructure is being shared with a cryptojacking script, they cut the cloud provider. And this means that the cloud company gets a huge chunk of revenue cut” — often to the tune of millions of dollars.
So Vargas and Sanmiguel have focused on “building an API that cloud providers can integrate into their codebase in just a couple of minutes, ‘outsourcing’ their security to us instead of having to hire more engineers.”
They’re tackling cryptojacking first, and will expand to cover other threats.
SafeTalpa had rejected offers from several different accelerators earlier this year, but April’s launch camp convinced them that XI was the perfect fit.
By the end of the program, Vargas said, they hope to be able to “get enough revenue to operate at an equilibrium point — or at least really close to it. So that’s a couple of thousand dollars in monthly recurring revenue. That’s the main goal, definitely, and we hope to get some customers in the defense space. And … we would look for funding as a secondary goal.”
Clint Knox teaches ninth grade English in Colorado Springs, and came up with Brainitz to fill a glaring need in the classroom.
“I had a number of students who would fall behind, and a lot of why they would fall behind was due to bad life situations that they didn’t have any control over,” he said. “And to be frank, if I was dealing with many of the situations that they were, I’d probably be skipping school and smoking pot at the 7-Eleven as well.
“So these students would come back to me in November and say, ‘Mr. Knox, how can I pass your class?’ and I’d say, ‘Well, you’ve got a 10 percent and there’s like a month left to go.’ There just really wasn’t anything I could do.”
Knox thought making his lessons available online would help, but throwing them up on YouTube wasn’t the answer.
“There was no way for me to know that the student watched it,” he said. “I wanted to be able to put them up online, but make it accountable and interactive so the student had to pay attention. They couldn’t just watch it, play on their phone, and get credit.”
Brainitz is Knox’s solution.
“We allow teachers to easily embed questions in recorded lessons so rather than a student passively watching a video, the videos in the Brainitz platform pause, questions pop up, and if students answer the question right, they move on,” he said. “But if they answer incorrectly, they’re kicked back — not to the beginning of the video but just to the section they missed, to rewatch that section as many times as they need until they get the question right.
“By completing the video instruction this way, a student in essence has to get 100 percent right. It brings student accountability into what’s called flipped or blended learning.”
Three years ago, Knox worked with a retired Colorado College professor to come up with a minimum viable product, then tested it in his own classrooms.
“It was interesting, because I started this as a way to help my failing students but it turned out my advanced students loved it as well,” he said. “They were like, ‘Wait a second Mr. Knox, I can watch these videos and I don’t have to wait for the slow kids to take notes? I can go at my own pace? This is awesome.’ So it really hit both spectrums. Students were able to pause and take notes; they were able to get questions wrong, but not be embarrassed in a public setting; and go back and find the answers.”
Knox decided the time was right for an accelerator after working with a development team and having UCCS Bachelor of Innovation students test Brainitz in a classroom setting — against YouTube, a competing product and a traditional lecture. Brainitz came out ahead of all three.
“We had a lot of the bugs figured out, we had a solid platform, we had some evidence to say that this is beneficial for kids — and it was at that stage, I realized, we need to take the next step,” Knox said. “And that next step for us is Exponential Impact.”
Through XI, Brainitz aims to raise additional capital, build a plan for the next three years, and work with XI’s technology mentors to enhance the platform’s artificial intelligence.
And while Brainitz is currently used and designed for K-12, Knox said, the plan is to expand into higher education, corporate training and continuing education.
Luis Barroso is from Bucaramanga, Colombia; his wife Brittney is from Spokane, Wash.; and they came up with RootLo in the space of two weeks. It was love, a lifetime of travel, and a “conflict of interest” that set the ball rolling.
Luis was working for group work/travel company Remote Year and Brittney was a Remote Year client when they fell for each other.
“When we decided to be together, I quit the company because that was a conflict of interest … and she quit the program that she was in. In that moment we said, ‘OK, we love what we are doing — let’s continue doing it, but together.’ … Fourteen days after, I launched RootLo.”
Today, RootLo is a mobile app community “where you can join like-minded travelers to inspire, socialize and share travel costs and tips,” its website explains.
“RootLo is the belief that the way to work has changed, and the 9-to-5 is no longer sustainable,” Luis said, adding that by 2020, 60 million Americans will work remotely and many are interested in traveling while working.
“The digital nomads, the people who are traveling and working — that’s our target,” he said. “With an algorithm that we created, we are matching what is important for you, what cities have that to offer, and who is going to the same city with similar interests to you.
“Remote work is trending,” Luis added. “Millennials now don’t want to buy a house like our parents 30, 40 years ago — this new generation, they are more like ‘Let’s share. Let’s live six people in the same apartment. Let’s save money. Let’s travel where it’s cheap.’ It is a lifestyle. But it’s not easy to jump into that lifestyle if you don’t have knowledge or experience. … We open a big book of opportunities for these people.”
While some global companies have built pricey packages for digital nomads to travel and work around the world, RootLo aims to give travelers the tools to create their own packages and build their own communities, at a much lower cost.
“That target population that makes $5,000 monthly [to afford expensive packages] is really, really, really small,” Luis said. “They build a really nice package but are not very flexible … but we are focused on saying, ‘Hey, there is a cheaper way. I don’t want to tell you where to sleep, I don’t want to tell you where to eat, I don’t want to tell you which bus to take. That information is on the web.’ I jump to the other side: I am on the side that builds the community. I put people alike on the same chat so they can build a great relationship, maybe a great business, and share expenses — and that, for us, is where the world is moving forward.”
Luis, who has traveled to 45 countries and worked all over the world, said his goal for the accelerator is to launch the app.
“We are in beta right now — we’re testing the application at the moment,” he said. “I do believe that my app is ready for launch, but I have one week to wait to have amazing advisory and input [from the XI mentors] so my plan is wait, listen to advice, show them where we are, and continue doing the testing.”
His other goal is to properly prepare for future rounds of investment.
“I am an entrepreneur, I am an engineer, I have a master’s degree — and that’s a lot of things, but when an investor comes to you and says, ‘Hey, take $1 million, take $500,000’ — what do you do with the money? I see this as the future of my family, so I want to do this in the best way possible. At the end I expect to be launched and be ready for Series A [investment] — and I feel that knowledge from XI will help us to grow success. So I’m super excited for this opportunity.”