With emerging technologies, the road to commercial success meanders through an uncertain topography. The most dreaded stretch is the "Valley of Death" that lies between the period of heavy investment in technology and market development and the vista of sustained sales. Companies may spend several years in this parched terrain waiting for industry trends to shift, the economy to become more robust, and perceived risk of all types, to be reduced. With steadfast devotion, planning, and, efforts to obtain additional financial resources companies successfully traverse the great divide.
Dawnbreaker's interventions are facilitative. It is the participating companies' actions, aided by increased business acumen, information, and tools that are responsible for their success. Following an Opportunity Forum® companies may decide to take limited action or by contrast, may aggressively seize new opportunities or more ardently pursue previous initiatives utilizing the tools developed in a Dawnbreaker program. The decisions of the company to be more or less aggressive are affected by personalities, by the financial condition of the firm, the availability of contracting vehicles, the availability of staff to follow-up with contacts as well as their knowledge of how to do so appropriately. Other factors that come into play are market conditions, as well as technical issues that may emerge following a presentation at a Forum.
Congratulations are extended to all the program participants for their commercial achievements. This site highlights the profiles of companies that achieved more than $1,000,000 in sales and/or investments during the 18-month period, following one of our Forums.
NuVant Systems, Inc., was founded in 1999 and is located at the Northwest Indiana Purdue Research Foundation Technology Center in Crown Point, Ind. A privately held firm, NuVant develops and integrates catalysts and electrolytes for stationary and portable fuel cells and has pending patents for inorganic fuel cell electrolytes operating between 250-400°C. The company has been involved in fuel cell component development since its founding and introduced patented array reactor technology that enables precise, accurate high throughput evaluation of electrode assembly components and fabrication methods under normal device operating conditions.
In 2005, NuVant was awarded a Small Business Innovation Research (SBIR) Phase II from the Department of Energy (DOE). The project title of this Phase II was "Improved Fuel Cell Cathodes Catalysts Using Combinatorial Methods." Through this topic, the DOE was looking for the development of a technology that would enable high-throughput evaluation of fuel cell cathode catalysts.
According to NuVant Systems, Inc. CEO, Dr. Eugene Smotkin, during a Phase I and Phase II from the DOE, the company was able to step-improve their Arraystat technology. The two key components of the technology are the multichannel Arraystat potentiostat, and the parallel array fuel cell. The fully automated multichannel potentiostat designed to control a 25-channel array fuel cell for high throughput characterization of fuel cell electrode components. The array fuel cell is a highly optimized segmented fuel cell that allows for precise control of reactant stream flow to selected segments of the array electrode system. And it was through that research and development work, that the company was able to construct and test a prototype. "We started out with contracts to build fuel cells for the Army," said Smotkin, but the company found that shouldering the cost of research was cost prohibitive, as it takes a good deal of time to cash in on the final product. "It was through participation in the DOE SBIR program, that we essentially developed the fuel cell testing technology from some preliminary data that we had gathered prior to the Phase I," Smotkin explained. "The DOE program allowed us to develop the first Arraystat prototype, which accelerated and reduced the cost of our catalyst discovery program and now provides sales revenues. It was the first product the business sold."
Since the development of the initial Arraystat product, NuVant's technology continues to evolve, said Smotkin. "There have been several improvements made in our technologies, as we continue to research and provide products for our customers." Some accessory options that have been developed for the Arraystat include modular addition and control of temperature, humidity and mass flow control, which add to the advantages of today's technology over the initial product. The improvements and changes made in the Arraystat include a line of spin-offs including the EZstat and the Powerstat. These products are high performance potentiostat-galvanostats suited for electroanalysis, including high-speed cyclic voltammetry, chronoamperometry and chronopotentiometry. What sets these instruments apart from others is their ability to control temperature and mass flow. Further, NuVant's instruments are powered by National Instruments control cards, enabling end-users to write their own control software and easily integrate NuVant instrumentation with end-user research instrumentation. Recently, the EZstat and NuVant's single cell fuel cells were used at an in-situ spectroscopy workshop at Brookhaven National Laboratory.
Through its DOE SBIR Phase II award, NuVant was provided with the opportunity to participate in the DOE Commercialization Assistance Program (CAP), developed by Dawnbreaker. The CAP is designed to assist companies in developing the tools, such as a business plan, an executive summary and the presentation materials needed to obtain private sector funding. Smotkin said that NuVant's participation in the CAP "enabled the company to develop private partnerships, including subcontracts on other SBIR awards, and to begin the process of securing venture capital funding." And, he remarked that the documents the company developed through the CAP were "critical to the development of these partnerships." Smotkin also said that the program was helpful because it, "helped the company generate the model of having two parallel development paths to follow" and assisted them with organizing their plans to spin-off products, using the revenue to sustain the business.
It was the business plan that NuVant developed with Dawnbreaker staff that Smotkin spoke most highly of. "It's not just something you hand to an investor, but something that companies need to move their projects forward. Every company needs to have a plan. On that alone, I would recommend the CAP to other SBIR firms." He went on to say that the CAP, "Not only helped our company find a lot of holes in our business, but also assisted us in building a plan to remedy outstanding issues."
Phase III success did not happen overnight. It took three years to move from the initial DOE Phase I conception to the selling of the product. Since that time, NuVant Systems has gone from two employees to 14, has received $4.6 million for additional R&D from the U.S. Army Research Office for development of their portable fuel cell technology, has had revenues of over $500K in Arraystat product sales to the private sector and academic institutions, and continues to improve their products based on end-user feedback. The enhanced version is a robust modular device that enables versatile electrochemical, mass flow and temperature control of an array of individually addressable electrodes. In addition, fuel cell component evaluation instrumentation, NuVant now offers equipment and short courses to facilitate customer in-house preparation of fuel cell electrodes.
As energy and environmental issues continue to challenge the country, both the DoD and the DOE have been preparing for the future by coordinating federal hydrogen and fuel cell technology efforts. Fuel cells use hydrogen-based fuels to produce electricity, offering increased efficiency, clean emissions, quiet operation and potentially long lifetimes, and are relevant to each agency's missions.
While potential fuel cell applications are plentiful and diverse, R&D is required to deliver the potential. Through their Small Business Innovation Research (SBIR) programs, both the DoD and DOE have been able to engage small, innovative firms such as Precision Combustion, Inc. (PCI) of North Haven, Conn., to advance this transformational technology.
PCI, founded in 1986, is an energy innovator developing advanced catalytic solutions for clean and efficient use of fossil fuels for a variety of applications. Among these, PCI is developing Microlith® fuel reforming and fuel processing technology to allow fuel cells to use conventional fuels (e.g. diesel and military logistics fuels) instead of the hydrogen normally required. By allowing fuel cells to use the existing fuel delivery infrastructure, PCI's breakthrough eases use and substantially broadens the applications for fuel cells. Broadening the number of fuels a fuel cell can use also broadens the range of applications. PCI has applied for the service mark "We put the fuel in fuel cells."
PCI has received SBIR Phase I/II fuel reformer awards from both the Navy and the DOE, and through those awards received Dawnbreaker commercialization program assistance from both agencies. In 2004, PCI received a total of three Phase II reformer awards from the Navy (ONR) and the Army (ARL/TARDEC), directed to military applications for a logistics fuel reformer. In 2008, PCI received a Phase II award from the Energy Efficiency and Renewable Energy (EERE) department of the DOE for a water neutral reformer for diesel fuel. Per Kevin Burns, PCI president, "It's important for a vehicular fuel cell to be able to operate without consuming water. We now can supply all the water our reformer needs from the fuel cell exhaust."
The company's Microlith®-based reformer technology has now been converted into compact and efficient fuel processors able to reform a wide range of conventional and unconventional fuels. Some of the difficult, unconventional fuels the Microlith® reforming technology can reform include sulfur-containing JP-8 for the military, Jet A, diesel, gasoline, E85, biofuels, natural gas and even volatile organic compounds from industrial processes such as painting.
Building on the research investments of the DoD and DOE, Burns said that, "The company currently possesses the leading compact fuel reformation technology in the world." Reaching this leadership position is the result of PCI's technical capability and its strategic decision in 1999 to diversify by developing fuel reforming/ processing for hydrogen generation. Burns explained, "The company could have disappeared without the fuel processor, because as our clean combustion markets shrunk in the early 2000s, our technical breakthrough in fuel processing opened a new set of customers and markets."
PCI also made another key decision - it decided to participate in the DOE Commercialization Assistance Program (CAP) and the Navy Transition Assistance Program (TAP), each designed and contractually managed by Dawnbreaker, Inc. The CAP and the TAP are provided to SBIR firms to assist them in finding Phase III funding. The result has been substantial Phase III funding success, which in turn has enabled the company to create its world technology leadership position. Since 2006, PCI has amassed more than $12 million in Phase III development support and prototype sales funding. The numerous technology applications in the marketplace has allowed the company to tap a broad range of funding sources.
Through the rigorous analysis and the formal presentation that was developed with Dawnbreaker support, PCI has been able to more fully leverage these funding sources. "As a result," said Burns, "Both the substance of our analysis and our ability to communicate its impact to our prospects has helped us in deals with the government and in dealings with other companies." The Dawnbreaker interactions continue to play an important role in the company's success, Burns continued, "Their invaluable market feedback helped us to focus on advancing our technologies towards products. They provided knowledgeable and creative consulting guidance and encouraged us to focus and target our activities towards valuable outcomes. This was a major factor in various strategic choices over time, and it has paid off."
In just a few years, with the support of the Navy and DOE, and their respective assistance programs, PCI has grown to support over 20 employees working in the reformer area. They are a shining example of how the SBIR program can lead to major technological breakthroughs. Their success will continue to have a positive economic impact in Connecticut, the industry, and overall for the nation's energy needs.
Discovered in 1957 by R.H. Ritchie, surface plasmons have been extensively studied by many scientists. Research in this area led to Surface Plasmon Resonance (SPR), an analytical process, which involves the excitation of surface plasmons by light at a metal/nonconductor boundary. SPR approaches have been used in a variety of different techniques for applications in biodefense, clinical diagnostics, process analysis, environmental monitoring, water and food safety, and biomedical research. Surface plasmon resonance is the basis of many new tools for measuring absorption of material onto planar metal surfaces, such as a gold-dielectric interface. Ciencia, Inc. of East Hartford, Conn. is focused on developing SPR technology in these areas.
In 2003, Ciencia was awarded an SBIR contract from the National Science Foundation (NSF) to develop a biosensor for detection and monitoring of environmental pathogens, with the primary objective being the development of "a portable, low-cost device for rapid detection and identification of biothreats with high reliability in a user-friendly package with integrated sample collection." Most existing solutions require a vehicle-sized deployment costing hundreds of thousands of dollars. While portable systems are lower in cost ($15K to $30K), they are still too large for soldier-portable operations. The challenge was to develop a cost-effective approach for detection of unknown toxic agents with rapid on-site testing of exposure to a biological threat agent before the onset of illness.
Cost reduction was one of the key challenges Ciencia addressed, with the ultimate objective being the development of a hand-held, portable device that could be utilized in a field environment. Technological details at that reduced size and weight are critical to operational success. Ciencia has successfully met this challenge, developing two compact, field deployable instrument designs, one of which is hand-held and battery-operated.
"Ciencia's sensor technology works by directing a beam of a specific wavelength of light onto a thin layer of gold that overlays a diffraction grating on a plastic or glass substrate," explained Arturo Pilar, the company's president. "At a very specific angle, most of the light couples into a surface plasmon wave, reducing the amount of light reflecting from the surface. Material on the surface of the gold, i.e. bacterial cells, virus particles or protein molecules, changes the angle at which this resonant coupling occurs. The gold surface is prepared by the deposition of near-microscopic spots of antibody specific for the bioagents to be detected. Then a sample that may contain the bioagents is flowed over the gold surface. By monitoring the resonant angle of the light reflected from each spot, we can identify which of the bioagents is present in the sample and at what concentration."
Ciencia presented its technology at the October 2005 Opportunity Forum®, seeking participation from interested parties for licensing of its portable biothreat detection system. Through the coaching and advice provided by Dawnbreaker, Ciencia was able to broaden its Forum presentation beyond the biothreat area to include applications in medical diagnostics and environmental testing. This presentation assisted the company in securing interest in its broader medical diagnostics and environmental testing applications.
Through National Institutes of Health (NIH) grants totaling $2M, Ciencia is now applying its surface plasmon resonance and SPR-enhanced fluorescence (SPRF) technologies to three distinct bio-medical issues related to diabetes, arthritis and general plasmonics solutions. (Ciencia's patented SPRF technology is a further optical detection technology with increased sensitivity to smaller molecules.)
Ciencia's NIH supported diabetes research utilizes the SPR-enhanced fluorescence technology to economically identify children at risk of Type 1 diabetes, before the onset of symptoms and the destruction of pancreatic beta cells. The SPRF technology allows the company to run thousands of simultaneous assays in a period of minutes to detect early signs of diabetes. Similarly, Ciencia's arthritis-related research is specifically aimed at identifying key parameters that show a high correlation with the symptoms of rheumatoid arthritis, such as the presence of gout, bacteria or viruses causing inflammation. The common factor in both of these research efforts is Ciencia's SPRF technology.
Additionally, the company has since expanded its development of a "lab-on-a-chip" for specific biological applications. NIH has also funded development of a "Cytometer on a Chip" intended to capture complex fluids, blood for example, that can be flowed over the chip in sample sizes of less than half a milliliter. In matter of minutes, this technology would allow a thousand separate analytes to be identified and quantitatively measured, all at the same time. "Here again, the technological challenge is to reduce the size and weight of current instrumentation. With the goal being a hand-held instrument that is easily operated under field conditions similar to those in the NSF biothreat project," explained Pilar.
Ciencia's main business focus is the integration of advanced fluorescence sensing instrumentation, novel fluorescent dye and proprietary assay methods with sophisticated analytical systems targeted to applications in biomedical research and environmental and industrial markets. Ciencia's near term goals, according to Pilar are to, "Develop applications with speed and robustness, dramatically reducing the size and cost of instrumentation while achieving commensurate increases in assay sensitivity. Then, through collaboration with strategic partners, the company means to design, develop and produce fully integrated systems that are targeted to specific applications."
Visit Ciencia online at: www.ciencia.com
Batteries and other energy storage technologies, are critical components for the development of advanced, fuel-efficient vehicles, that are meant to meet the DOE's Energy Strategic Goal to, "Protect our national and economic security by promoting a diverse supply and delivery of reliable, affordable and environmentally sound energy." Unfortunately, the cost of a Li-ion battery is generally seen as one of the greatest barriers to application for wide-spread adoption of automotive and commercial hybrid applications. However, InvenTek Corporation, headquartered in New Lenox, Ill., has developed an innovative Li-ion battery design that is cost-effective and will reduce costs by at least 30%.
Supported by an NSF Phase II SBIR award (Cost-Effective Manufacture of High-Power Li-Ion Batteries for NGV), InvenTek has focused its research on developing an innovative cell architecture with improved performance and safety capabilities and developing a more cost-effective manufacturing method for high-power Li-ion battery production.
InvenTek's Rolled-Ribbon™ cell manufacturing process is meant to provide a scalable manufacturing process for the production of low-cost, high-quality Li-ion battery components for hybrid vehicles - an elusive goal until now. The manufacturing process provides a lower cost cell, and through the elimination of components, lower-cost cell-to-cell connections and lower auxiliary cooling costs. The EOL recycling costs are reduced and InvenTek's technology is smaller and lighter than other large format batteries.
According to Thomas Kaun, who founded InvenTek in 1991, "Adoption of this technology will allow U.S. based battery manufacturing firms to compete more cost-effectively in world markets." The current debate over the future of hybrids and electric vehicles surrounds the technical readiness of Li-ion batteries. The next generation batteries are proving to be more powerful and lighter than currently employed nickel metal hydride cells which makes them key to the introduction of viable electric vehicles.
InvenTek employs a unique rolled-ribbon cell for the lithium-ion battery. A complete battery pack is comprised of a number of multi-cell modules. The manufacturing of these modules is accomplished by simply stacking large capacity (5-15Ah), sealed, disc-shaped Rolled-Ribbon™ cells to optimize power capability internal heat dissipation. Overcoming prior battery safety concerns, this compact, pulse-power design combines unique internal heat dissipation, inherent cost advantages and delivers thousands of pulses and recharges. This means that vehicles employing InvenTek's batteries will have a reliable, safe, high-power Li-ion battery that is light, compact, thermally efficient, easy to manufacture and recycle than ultra-capacitors or other high-power batteries.
"Improved performance and temperature stability for the Li-ion battery can enhance prospects for the civilian hybrid vehicle market." Kaun explained, "The rolled-ribbon design is a technology that enables U.S. producers to compete by lowering the materials requirement, packaging and safeguard costs of a large high-power battery. It fulfills the need for high power at low cost."
Hybrid Electric Vehicles (HEV) batteries remain a primary target market for the Rolled-Ribbon™ battery technology and looking to the future, the company's strategy is to license its technology to large manufacturing firms such as Li-ion battery companies. Since the Forum, InvenTek has benefited from outside interactions from a variety of companies including an electric utility, defense lab, a 1st tier vehicle supplier, and an advanced vehicle systems developer. The company has also received NSF Phase II B funding and, based on the strength of the company's accomplishments, InvenTek secured $1M in equity financing from Certare Ventures in early 2006.
As for the effect the company's completion of the 2004-05 CAP program has had, Kaun said that, "The CAP participation developed a focused business strategy that brought validation to our technology. Usually you have piece of the puzzle for a market, in our case, it is an innovative battery architecture and manufacturing process for HEV. Its value comes from fitting that single piece of the puzzle into the overall product development puzzle and then connecting with right people. The Dawnbreaker program enhanced out credibility in developing business interests."
Recently, the viability of the Rolled-Ribbon battery architecture has been demonstrated in a Toyota Prius. Powered by five 12-cell modules, the 220 volt Prius battery shows the potential to reduce 80% of the required battery volume in comparison to the standard nickel/metal-hydride battery. InvenTek is now working on prototype manufacturing of its 12 cell, 50V module to step up field testing activities and confirm cost savings over competing battery formats.
Visit InvenTek Corporation online at: www.inventekcorp.com
Some of the key values of participation in the Dawnbreaker managed DOE Commercialization Assistance Program (CAP) are the lessons that emerge from developing the company's "value proposition," the financial projections required for inclusion in every business plan, the development of a company's definition of its intellectual property and the detailed five year plan for introducing its technology through new marketing channels.
For Dr. John D. Bruno, president of Maxion Technologies, Inc., the value of his company's participation in the CAP is summarized in the phrase "disciplined process." According to Dr. Bruno, the lasting value of the program was the establishment of a disciplined process that carried over to other projects within the company. "The DOE-sponsored, Dawnbreaker CAP provided a structured approach that was timely and comprehensive in its overall delivery. While the full business plan was too detailed for most VC discussions, the disciplined thought process and objective questioning during the plan development was of lasting value." Comments reminiscent of Dwight D. Eisenhower's famous line, "Plans are worthless, planning is everything."
Maxion Technologies was founded in 2000 by a team of scientists and engineers from the Army Research Laboratory in Adelphi, Md. The company, now located in College Park, MD just outside of Washington D.C., delivers lasers and other light emitting products to business and government customers that develop solutions for a wide range of applications in chemical sensing, infrared countermeasures and free-space optical communications.
The company received a DOE Phase II titled Mid-Infrared Interband Cascade and Quantum Cascade Lasers for Chemcial Sensing. Through their Phase II they were offered and decided to participate in the 2005 CAP, Through their work with the CAP, and the further commercialization of their technology, Maxion learned that the Venture Capitalists (VCs) they approached appreciated a compelling, short case statement stipulating the technology's market potential but leaving room for key questions of the company leaders. This tactic is especially true in the field of "disruptive technologies, such as the laser technology being developed by Maxion. Long range plans, in this instance, are not especially helpful what with the brisk life-cycle technology.
Maxion's laser technology enables a new generation of commercial products to make use of unique interactions between matter and laser radiation at wavelengths between 3 and 12 microns. Maxion is the only company in the world selling both interband cascade (IC) and quantum cascade (QC) lasers to business and government customers. The company's lasers enable the development of a new generation of products in a wide variety of chemical sensing, free-space optical communication and infrared countermeasure product markets. A few of the many products newly enabled by Maxion's lasers include source modules for infrared countermeasures, sensors of chemical warfare agents, sensitive remote gas leak detectors, ethane breath analyzers, remote detectors of various pollutants and remote explosives sensors.
Since the company's presentation at the 2005 DOE Forum, Maxion has received an STTR Phase II contract from the Missile Defense Agency (MDA) to develop LED arrays to support MDA requirements for IR scene simulators. In addition, it has sold nearly $500,000 in IC and QC lasers to commercial R&D firms. In 2007, based on the strength of the MDA contract and commercial sales, Maxion completed a Series "A" financing investment of $2.5M from Chart Venture Partners. With these funds, Maxion is now proceeding with fulfillment of its existing contracts and beginning to develop its plan for Series "B" financing.
Dr. Bruno attributes much of the company's success to the disciplined process instilled in his team during the DOE CAP. "Through this [CAP] process, our team learned to value the continuous planning approach, attention to detail and the flexibility needed to respond to a rapidly changing technical environment," said Bruno. "While development of a specific plan was important for presentation at the DOE Forum, the longer lasting value resides in the discipline of continuously questioning your basic planning assumptions and revising them to meet changing market conditions."
Visit Maxion Technologies online at: www.maxion.com
Founded in 1996 in Butte, Mont. Resodyn Corporation is a technology development and manufacturing firm with expertise in a wide array of areas, including industrial mixing, thermal spray, processing technology and biotechnology. The corporation has successfully developed and commercialized vanguard technologies and processes, including the development of the ResonantAcoustics® mixing technology.
Through its $500,000 National Science Foundation SBIR award in 2004 and participation in the Commercialization Assistance Program with Dawnbreaker, Resodyn has taken its "enhanced mixing technology" through the final stages of its development cycle and into the commercial marketplace. The company has received over $500,000 in commercial laboratory orders as well as a large DARPA contract for nearly $2M. The DARPA contract is for development of a process to mix production rocket fuels in a more efficient, homogenous and cost effective manner.
The company's vision is to enable its customers to achieve a level of product quality and manufacturing competiveness never before thought achievable. Having tested its mixers in the processing industry for more than five years, Resodyn now offers a product line of standard bench top and production mixers. Lean manufacturing techniques and continuous improvement strategies are combined to ensure the highest product quality, the highest reliability and the lowest cost.
Resodyn's technology, ResonantAcoustic® Mixing, is a new approach to solving mixing and dispersion problems that is distinct from either conventional impeller agitation, or ultrasonic mixing. Low-frequency, high-intensity acoustic energy is used to create a uniform shear field throughout an entire mixing vessel. ResonantAcoustic® Mixing is the only non-intrusive mixing process that can be scaled directly from the bench to the production floor. Mixing conditions established on the benchtop LabRAM are the same as those that are used in production. The result is rapid fluidization and dispersion of material with a consistent mixture being achieved rapidly. Production cycle times can be reduced or process steps can be eliminated, while at the same time improving quality and consistency.
To support this technical success, and to focus its marketing efforts, Resodyn Corporation developed three Business Units to capitalize on its broad range of technology offerings.
designs, manufactures and markets advanced mixing systems that use low-frequency, high intensity sound. The systems have a variety of applications in industries with complex mixing applications, bioreactors and fermentation.
designs and markets proprietary plants for the continuous production of biodiesel from feed-stocks including vegetable oils, animal fats, and recycled fats and oils. This Business Unit has developed an environmentally friendly (green - chlorine free and low water use) pulping technology to convert wheat straw into paper pulp.
designs, manufactures and markets proprietary equipment for the application of advanced foams, protective and structural coatings for NASA, the military and a variety of industrial companies.
Given its success in the "industrial mixing market," a wholly owned affiliate, Resodyn Acoustic Mixers, Inc. (RAM) was established in 2002 to capitalize on the commercial opportunities in industrial mixing. It has now become a recognized, world-class leader in providing innovative engineering solutions to industry and government entities.
When asked about the company's experience working with Dawnbreaker through to the Opportunity Forum®, Harold Howe, the RAM business unit manager, commented that, "Resodyn's participation in the Dawnbreaker Forum was very helpful in creating market awareness of our technology at a critical time in our development. The NSF Commercialization Planning ProgramSM provided a disciplined process that helped focus our Business Unit team. Although we did not generate any specific sales at this Forum event, the development of a comprehensive Business Plan through the Dawnbreaker planning process provided a roadmap for our commercial success."
Both Resodyn Corporation and the affiliated Resodyn Acoutic Mixers, Inc. are now pursuing commercial opportunities in the bio-tech field as well as in advanced materials markets. "Current mixing technologies are inadequate for the demanding requirements of nanotechnology and advanced materials," said Howe. "Consequently Resodyn Corporation is continuing to seek OEMs that would like to license our technology for specific industrial applications."
Visit Resodyn online at: www.resodynmixers.com
Alternative energy approaches are gaining respect within the United States and across the industrialized world. As oil prices increase to unheard of levels, investments in alternative energy technologies increase in direct proportion. Fortunately, DOE has been investing in solar power, wind power, biomass energy and other promising technologies for years. One of its major investments started back in 2002 with its $850,000 Phase II funding of Wind Tower Composites. Under the auspices of the DOE program titled "Low wind Speed Technology Program," Wind Tower was awarded a contract to conduct research and development for commercialization of its lighter weight, taller and modular wind turbine towers for utility scale, multi-megawatt wind towers.
Wind turbines are generally clustered in "wind farms" that are installed in remote locations with unobstructed, windy conditions. These wind farms involve incorporation of an appropriate sized wind tower with a large scale wind turbine from companies such as Vestas (Danish), Siemens (German) and GE Energy (U.S.). Generally speaking, these turbine OEMs do not subcontract manufacture the towers, which require customization depending upon their location and height. A typical wind farm installation in the mega-watt class can range between $2M and $6M per turbine, depending upon its design and location. Increasingly wind towers are growing taller and taller in their attempt to reach greater wind speeds and thus greater power production. Power generation improves between 6% - 12% at tower heights of 100 meters vs. that achievable at 60 meters.
For towers exceeding 100 meters, the size, weight and transportation become major factors in the tower design (transportation limits are reached around 80 meters for the rotor diameters). Tubular steel has traditionally been used to construct towers under 100 meters, but Wind Tower Composites (now known as Wind Tower Systems or WTS) has developed, through a DOE SBIR award, a Space Frame Tower to address these size and weight issues. Through its innovative modular design it has reduced the tower weight by 20+ percent and the production cost by 25 percent (five patents pending). These weight savings translate into roughly $50,000 in manufacturing savings per tower. In addition to this improvement in "unit manufacturing cost," these towers are much easier to transport and install, given their lighter weight and modular design, thereby saving an equivalent $160,000 in site preparation, transportation and assembly. One of WTS's five patents addresses its unique "High-Jack crane-less" installation technique.
For large installations, the turbine manufacturing companies contract with a wind farm developer for installation of their power generation solution. The developer outsources field erection of the tower and turbine to a third party, which will utilize the proprietary High-Jack system for installation.
WTS's innovative, taller wind turbine towers and crane-less installation systems enable modular, economically transportable towers to be installed for projects that would be difficult using conventional tubular towers and crawler cranes. The ability to economically capture stronger winds at greater heights further enables development of more sites on land. Both benefits result in large increases in suitable land areas for large and small projects, enablement of smaller wind farms closer to load, and reduction in transmission constraints. For remote locations such as the less industrialized nations and islands, installation and maintenance risks are reduced. Technologies providing these solutions are estimated to increase the worldwide developable land area for wind energy by 10 to 20 times.
Located in northern Utah, the company was founded in 2002 as "Wind Tower Composites, LLC" with a mission to research, develop and commercialize lighter weight, taller and modular wind turbine towers. In addition to the Department of Energy award of $850,000, an additional $1.5M matching grant from the California Energy Commission enabled construction, testing and certification of its first commercial turbine tower and the demonstration of the crane-less installation method. Based on this certification and the company's clear leadership position, in May 2007 Wind Tower Composites was acquired by Wasatch Wind, Inc. through a $3.6M Series A funding from DFJ Element, a top-tier renewable energy investment firm. DFJ Element, now know as Element Partners, invests in emerging companies bringing innovative solutions to environmental and resource constraints in energy, water and other large industrial and commercial markets.
Tracy Livingston, director and CEO of Wasatch Wind, said that the benefits of the DOE commercialization process in preparing his company for the investment meetings with DFJ Element were key. "The DOE sponsored Dawnbreaker Commercialization Assistance Program (CAP) provided an excellent process for development of our company's value proposition," he explained. "The formal presentation that we developed for the DOE Forum was an excellent summary of our technology and business benefits. We have used that presentation over 20 times in our fundraising efforts." Livingston further emphasized the need to follow the disciplined CAP planning process for development of a comprehensive business plan. "It was through this back-and-forth review process that our management team developed the three primary values of our technology. These values are providing lower cost installations, increasing wind utilization over 100 meters in height and lastly, making expansion of wind farms viable in remote areas for economical implementation."
Visit Wind Tower Systems online at: www.windtowersystems.com
It has long been said that necessity is the mother of invention. While that is essentially true, it takes a great deal more than necessity to bring a new technology to market today. There are many factors in creating a successful technology and the business to support it. To do so, requires more than the scientific knowledge of how to create a product to fill a need, it requires a comprehensive business plan - a road map through the long, dry and appropriately named Valley of Death.
The Valley of Death is the stretch between the period of heavy investment in technology, market development and sustained sales. Companies may spend years in the Valley waiting for industry trends to shift, a more robust economy, and/or a reduction in risks of all shapes and sizes.
With dogged preparation, commitment and unwavering efforts to obtain additional financial resources-companies successfully traverse the Valley of Death and find success on the other side.
This issue of Profiles in Success is a celebration of the achievements of companies that participated in the 2002-2003 Commercialization Assistance Program (CAP) sponsored by the U.S. Department of Energy and conducted by Dawnbreaker®, as well as two companies whose road to success was a little longer, but no less impressive. The purpose of the CAP is to assist companies in developing the tools (business plan, executive summary, PowerPoint presentation) needed to obtain private sector funding following the completion of R&D awards from the sponsoring agency. The method used by Dawnbreaker in working with participating firms is highly interactive and is intended to also enhance the business acumen of participating firms.
Thirty-two companies (listed at left) completed the program and presented at the Opportunity Forum held in Tysons Corner, Va., in September 2003. This CAP was a collaborative endeavor with 28 companies participating under DOE SBIR sponsorship, two with funding from Energy Efficiency, and two with funding from the Environmental Protection Agency. Follow-up data were collected at 6, 12, 18 and 20 months following the Forum, in order to determine if the CAP successfully achieved the desired result of increasing the likelihood and rate of obtaining private sector funding and/or product sales.
Dawnbreaker's interventions are facilitative. The actions of participating companies, aided by increased business acumen, information and tools, are responsible for their success. Following a Forum, companies may decide to take limited action or, by contrast, may aggressively seize new opportunities or more ardently pursue previous initiatives, utilizing the tools developed in the Dawnbreaker program.
The decisions of the company to be more or less aggressive are affected by personalities, by the financial condition of the firm, the availability of contracting vehicles and the availability of staff to follow-up with contacts, as well as their knowledge of how to do so appropriately. Other factors that come into play, are market conditions and technical issues that may emerge following a presentation at a Forum.
Within 20 months of program completion, 53 percent of the presenting firms that participated in this program received additional private/non-SBIR funding and/or increased sales totaling $48,000,000. This is a significant return for just a 20 month period. Investments came from a wide variety of sources including private placements, debt financing, technology acquisition, loans, equity investments, state funding and royalties. Also of note, was the amount of the investment made by the companies themselves to advance their technology.
Congratulations are extended to all the program participants for their commercial achievements. Included are eight profiles of companies that achieved more than $1,000,000 in sales and/or investments since their participation in the DOE CAP.
Based in Cleveland, Ohio, Acrion Technologies, Inc., an R&D 100 Award winner, is a leader in landfill gas clean up and utilization. Founded by a group of Case Institute faculty and graduates, the company's original technical developments and patents were for processing low-quality natural gas.
When landfill gas collection and flaring became mandatory, the waste industry sought ways to use landfill gas productively, and reached out to many organizations, including Acrion. "That's how our current technology was born," said Marina Neyman, Marketing Director and Co-founder of Acrion. "We started to look at our existing portfolio and realized that we had already developed technology to remove contaminants from low quality natural gas, many of them commonly found in landfill gas. So we generated proposals and funding through DOE's SBIR Program to expand our thermodynamic and operational data base and developed what we now call, CO2 Wash™ Technology, Acrion's core product."
Acrion's proprietary CO2 Wash™ Technology removes contaminants from landfill gas by washing it with liquid CO2, converting landfill methane to clean medium BTU gas suitable for raising steam, generating electricity, or feedstock for methanol synthesis, and, with further CO2 removal, suitable for pipeline gas, CNG or LNG vehicle fuel. CO2 Wash™ also recovers liquid CO2 by-product. "From a technical standpoint it is an elegant solution where landfill gas provides its own solvent for clean up. It is environmentally friendly and economical. Furthermore, it allows us to do what no other landfill gas technology does," Neyman said.
The technology has been primarily targeted at private and municipal landfill organizations. Most, but not all, landfills are near major metropolitan areas and each landfill offers its own unique challenges to gas utilization, including market opportunities surrounding the landfills. Acrion approaches each landfill by researching how to maximize "value added" in upgrading methane for local market needs.
"Once we have taken the initial step of removing contaminants, which is the major hurdle to using landfill methane, we have two products, CO2 and methane, which can help supply one or more markets in a given location. Our job in developing projects has been not so much convincing people that the technology works, but finding customers who will execute long-term contracts to take product," explained Bill Brown, President and Co-founder of Acrion.
Uses of clean landfill methane produced by CO2 Wash™ include pipeline gas, transportation fuels, either as compressed natural gas (CNG) or liquid methane (LNG), conversion to hydrogen to power fuel cells, or conversion to commodity chemicals such as methanol. In each of these cases, co-produced liquid C)2 can also be used in numerous applications in markets near the landfill.
Acrion, in conjunction with licensee Firm Green Energy of Newport Beach, Calif., is now developing its first commercial project in Columbus, Ohio. Landfill gas from Franklin County Landfill, owned by the Solid Waste Authority of Central Ohio (SWACO), will be converted to methanol. "Firm Green was able to negotiate a contract with Mitsubishi Gas Chemicals to take our methanol product," said Brown. Ohio EPA is in the approval stages and is expected to issue permits this summer. With permits in hand, Firm Green will be able to secure financing and commence construction of the Columbus project that, when operational, will produce 20,000 gallons of alcohol and 40 to 50 tons of liquid CO2 a day, to be sold at market price.
Acrion has also licensed its technology to Mack Trucks, Inc., of Allentown, Pa., to make liquid methane truck fuel. The core idea is to fuel refuse trucks coming to the landfill everyday with liquid methane, rather than diesel fuel," Brown explained. "We are trying to encourage the use of liquid methane alternative fuel in refuse trucks across the nation and Mack is spearheading that effort."
Acrion's Columbus project and other successes are a direct result of DOE funding. "All of the demonstration work that DOE SBIR funding made possible has been used to convince stakeholders that we have a technologically feasible solution to their problem." Brown continued, "Of course then you have your steps of product marketing, obtaining EPA permits, other approvals, and the project financing. But the basis of the whole thing is, 'Does the technology work?' That's what we were able to demonstrate with DOE SBIR funding, to the satisfaction of many different stakeholders, including the two firms that have licensed our technology."
Participation in CAP gave Acrion an opportunity to focus on business rather than technology, and to learn how the financial world views a new technology and focus on some of the steps needed to move technology into the commercial marketplace. "Writing that first business plan with CAP was a big help because we were able to use that document in many different settings. We used it to attract potential licensees with whom we eventually consummated agreements. We have been using snippets of that document as we continue to interface with various potential commercial enterprises that are looking at our technology," said Brown.
When considering the influence that DOE and the CAP have had on their business, Acrion recommends the program to other small businesses. "We are a group of technologists. We have little experience in technology commercialization. I would think that most companies involved (in the SBIR Program) will achieve technical success, but to achieve business success is a whole new ballgame. I think that is where Dawnbreaker's guidance was really effective," said Brown.
Acrion has built a credible business, now on the cusp of a commercializing technology that will help provide sorely needed renewable alternative energy for America.
Visit www.acrion.com
Based in San Diego, Calif., Tempest Microsystems has redefined remote imaging technology and intelligence software. Founded in 1996 by former particle physics researcher, Michael Mojaver, Tempest Microsystems has applied image processing technology to the security and surveillance market by producing innovative products that utilize computer vision to track people and assets.
Focusing on a single market, Tempest Microsystems' core products are based on complex software and patents that help curb competition. "If you have complex, highly dependable software with patented elements, you have a formula for long-term success," said Mojaver. "We maintain our competitive edge by increasing software complexity and adding new features all the time. It is a daunting task for the competition to duplicate that effort." But the road to success hasn't been easy.
Just ten years ago, Mojaver was working at a university. He soon discovered that transitioning from the academic setting to the realm of small business required a drastic change in mindset. Tempest Microsystems started by providing engineering ser- vices for larger technology firms. Their initial DOE SBIR funding was to address the need for specialized networking components in the data acquisition system for the Compact Muon Solenoid experiment at the European Center for Nuclear Physics (CERN). "The CERN project is the world's largest imaging machine and Tempest R&D helped shape the supercomputing architecture for the machine," said Mojaver.
The DOE and participation in CAP gave Tempest Microsystems some much needed guidance. "We selected projects from the DOE solicitations that overlapped with our technology focus. The funding from DOE allowed us to do research and run a business at the same time," he explained. "It allowed us to study the broader industry and technology directions. But it needs to be understood, that it took several, overlapping grants from DOE to achieve our goals."
"What CAP did for us, was introduce a formal business planning process," recalled Mojaver. "It isn't obvious how to write a good business plan. You can write one and still not quite realize the implications and potential." DOE funding and participation in CAP gave Tempest Microsystems the tools that were integral to business success. "Working with the DOE helped us develop Intellectual Property that we could maintain. We were able to take this esoteric technology and change the focus toward a product that could be commercialized. It allowed us to train our best people, all while retaining ownership of the technology, unlike when we provided engineering services to other companies," Mojaver explained.
CAP afforded the opportunity to build a case for their business ideas, which for Mojaver was similar to what is derived when producing a case for a scientific paper-it just required a different way of thinking and writing the document or business case. "It took us two attempts to get it right but the document that was produced has been an invaluable tool," Mojaver remarked. "The business plan helped us get SBA funding critical to the commercialization process," Mojaver continued.
Tempest Microsystems hasn't received DOE funding in over a year. Instead, with their business plan in hand and a strong marketable product, they have raised SBA funds of over $1.5 million, as well as private investment. And today, ten years after leaving the university, Mojaver and Tempest Microsystems have sold 10,000 units of their digital video recorder in one year and built a state of the art manufacturing facility. The company is also preparing for an IPO, and foresee sales of $100M by 2010. All in all, they are a security-focused company on their way to securing unbridled success.
Visit www.tempestinc.net
Faraday Technology, Inc., named for 19th century scientist, Michael Faraday, who developed the laws of electrolysis, is an electrochemical engineering company based near Dayton, Ohio. This award-winning business focuses on enhancing and commercializing the Faradayic™ Process, a process based on programmable, rapidly modulated, electric fields that enable electrically- mediated process control.
The genesis for the 1991 founding of Faraday Technology and the basis for the development of the Faradayic™ Process, was the observed need for practical understanding of the electrolic processes. After completing his degree and working first in corporate R&D and then for two high-tech companies, Dr. E. Jennings Taylor, Faraday CEO & IP Director, realized that he wanted to take his work a step further.
"I saw an opportunity to take federally sponsored work and generate a competitive advantage which is sustainable through patents and get it into applications that can be deployed," said Taylor. "I think that is what really makes everyone at Faraday tick. In addition, as a trained electrochemical researcher, I felt this 'electric fields' platform (the Faradayic™ Process) would be sustainable-and have all kinds of applications. My hypothesis was true. There are things we are doing now that we couldn't imagine three years ago. We believe this process of continual discovery will continue to yield pleasant surprises."
Faraday's strengths lie in its ability to direct the innovation process from concept to pilot-scale and to manage the intellectual property assets developed from use of the Faradayic™ Process. Often serving as an outsourced R&D center for strategic allies, Faraday is known for its ability to replace labor intensive and/or environmentally unsound processes with more reliable, efficient and environmentally sound processes. The company provides solutions and imparts intellectual property protection to its customers. Some of Faraday's current projects include microelectrode arrays for understanding localized corrosion, metallization of advanced electronic interconnects, and electrochemical finishing of advanced engineering alloys.
As Faraday considers new projects, the focus is on potential market pull and prospective industry alignments. They utilize industry roadmaps and management of their own extensive list of patents as a guide to the needs of larger companies. IP management is a core policy for the company. "We spend a lot of time looking at other companies that house patents in areas where we have prior art. We conduct claims analysis and review. This is extremely important because if a big company files a patent approaching our area, it is generally an indicator that they have an interest in this technology area. We consider the process of examining patents as a marketing tool to identify potential partners," commented Phillip Miller, Faraday Marketing Director.
Originally involved in the 2003 DOE CAP to commercialize their titled project-"Microelectrode Array for Electrochemical Sensing of Localized Corrosion for Metallization," the company leaders worked with CAP to develop a complete business plan. The focus of the plan was seeking strategic allies with challenges in areas of corrosion prevention and control, coatings and metallization, edge and surface finishing, and in-process recycling.
"Market research was one of the most important tools we gained from CAP," said Miller. "We needed objective evaluation of the markets. That was a big thing. We try to keep track of and pay attention to a lot of different industries, so we are not experts on any particular industry. Secondly, Dawnbreaker has a tremendous reputation for being consultative, for looking at commercialization and trying to help technology companies focus not on the technology, but on the market application of the technology."
In the end, the technology from the 2003 DOE CAP was used as an analytical tool that enabled Faraday to create a suite of technologies that satisfied the needs of not just one, but several different customers. This technology suite has brought them nearly $1.4 million in Phase III funding, including: $500K for a hydrodynamically efficient solution flow "Super Cell" machine for the Sensors Directorate at Wright-Patterson AFB; $156K from the State of Ohio to modify a horizontal plating tool; and $690K from the printed circuit board division of a large electronics manufacturing services company to qualify the technology for manufacturing plant insertion. Several other companies have also provided substrates (of proprietary design) to plate or etch.
The strategy employed by Faraday has been a successful one, helping not only Faraday's business, but also the business of their partners/customers.
T/J Technologies, Inc., founded in 1991, is a small, privately held research and development corporation focused on inventing and developing nanomaterials for advanced stored energy devices and systems.
With a product line that includes fuel cells, lithium-ion and lithium polymer batteries, ultracapacitors and gas sensors-T/J, named one of the top tech firms in Michigan, has made tremendous inroads in an industry fraught with global competition. "Essentially, we are a virtual battery company. Our materials make a significant impact on the stored energy market for DoD and commercial applications, for both secondary lithium-ion batteries and PEM fuel cells," said James Chew, T/J Technologies Chief Strategy Officer.
A veteran of the DOE CAP, T/J participated in the 2003 pro- gram with a project titled, "Novel Battery Cathode Material for Hybrid Electric Vehicles." Their use of an innovative manufacturing process, along with a proprietary concept, allowed the company to demonstrate a noteworthy improvement in rate capability for cathodes, which facilitated the production of high-powered batteries with increased energy density, using lower cost materials.
Working with the CAP, T/J Technologies was able to ask the question-what do we do with this material we have produced? "Involvement in CAP helped us put together a strong business plan and say, here is where we think we are going to be able to go," said Chew.
T/J didn't end up where they had initially planned, but the process of developing their business plan pointed out potential problems and led them, ultimately, to their current direction. "Frankly, because of the process, we focused on the commercial market but we also knew that it could become a house of cards, if we weren't careful," Chew recalled. "And sure enough, it became a house of cards because everyone wanted the lowest cost, this and the lowest cost, that. Nobody thinks about paying a lot for a battery. They go down to Walmart and buy the batteries they need, for very little cash."
Once it was seen that the commercial market would not provide the level of support they were looking for, T/J made the decision to focus on another avenue for their business. "Because of our work with CAP, we decided to look at who else needed the materials we had. It was the Department of Defense. We took the information we prepared for the commercial market and used it for the Department of Defense," remarked Chew.
As they moved forward, the spin-off products T/J developed from the 2003 DOE contract were large format, secondary lithium-ion batteries for HEVs, compact, wide temperature range lithium-ion batteries for naval air weaponry, and compact, long- life, secondary batteries for robotic space probes for the Defense, Aerospace and automotive markets.
"We are developing the next generation large format lithium-ion batteries for the Army Future Combat System, lithium-ion battery replacements for the Naval aviation air weaponry, replacing thermal batteries, and the next generation NASA robotic space vehicle batteries," commented Chew
Today, their strategy for commercialization of a new product is little changed from the strategy they used in moving from the commercial market to the DoD. First, they find a good customer with a need that is not being met by the stored energy industry. The next step is to work with the customer to develop a new product that uniquely meets their needs. T/J's previous results from S&T work provide credibility and help them to work with the customer to obtain contracted S&T/R&D programs to fund the development of the project.
T/J has quadrupled their annual contract awards. "We are competing for and being awarded S&T/R&D contracts from the DoD and NASA," said Chew. To that end, they are no longer pursuing SBIR/STTR contracts.
When asked how CAP participation assisted them in reaching their goals, Chew remarked that it made them, "seriously ponder, develop and execute a business strategy that took us from a 'follower' position in the stored energy market to a 'leader.' Because of the material we developed under DOE funding, as well as following the strategy we developed with Dawnbreaker, we are now leading the stored energy market in terms of large format, secondary, lithium-ion batteries."
CAP participation isn't always easy, but according to Chew, "Small businesses need to have realistic expectation and understand that participating in this activity should be part of a company strategy, not simply a tactic to gain quick sales." This goes to show that there is some truth to, "slow and steady wins the race."
Visit www.tjtechnologies.com
Precision Combustion, Inc. (PCI) is developing and manufacturing advanced catalytic reactors for energy applications. Co-founded in 1986 by Kevin Burns and Dr. William C. Pfefferle, PCI focused its early years on development, with SBIR program assistance. This produced two breakthrough technologies: high stability catalytic combustors and ultra-compact, short contact time Microlith® catalytic reactors.
Upon receiving SBIR Phase II funding in 1999 for the development of ultra-low emission catalytic combustors for power generation gas turbines, PCI participated in its first Commercialization Assistance Program (CAP). "Building on the breakthrough technology we developed in the DOE SBIR program, we have be- come the world leader in gas turbine catalytic combustor technology," said Kevin Burns, PCI President. "Our burner is robust, has low single digit ppm NOx across a wide turndown range, reduces combustion dynamics, and has proven to be fuel-flexible, including natural gas, low BTU gas, associated gas, refinery fuel gas, IGCC syngas, and hydrogen."
SBIR Phase I/II funding has been and continues to be an essential source of funding for PCI as they move towards developing and commercializing new products for their business. While they use internal funding for preliminary project development, including early IP development, SBIR funds are crucial for proof-of-concept and development support. "SBIR gives critical support for product development while encouraging industrial manufacturer participation for Phase II and later work," said Burns. PCI also looks for follow-on government R&D support outside the SBIR program as they work towards product commercialization.
"Our products are sold to industrial customers and generally require substantial time and investment to bring to the market," Burns remarked. "We select only products where we believe our technology can bring a distinctive, defensible advantage, and where the value-added can attract one or more strategic partners. The strategic customer/partner involvement carries products from development to commercial application."
SBIR success doesn't guarantee that markets will remain stable, and unfortunately in 2001 the market for U.S. power generation gas turbines collapsed at the same time air quality drivers were being relaxed. While this led to a drop in industrial interest for PCI's product, it did not stop their work. Instead, the company redirected product development toward performance and cost benefits of the technology, as well as towards new fuel applications such as hydrogen and syngas.
Using ongoing DOE interest, PCI participated in their second gas turbine catalytic combustor CAP. "Participation in the 2003 CAP led to an improved marketing package and a refocused business strategy, better matching customer interests," remarked Burns. The process led PCI to refocus to a combined technology license, a core component supply strategy, closer customer relations, and to improve its marketing package and market-segmented business development.
"CAP helped resolve internal differences on strategy for the business. It improved our understanding of the value our technology created, and it led us to hone our strategy as related to SBIR and strategic partners," Burns noted. "Building on our strong development capability, CAP helped us decide how to market and what was reasonable to market and sell. It developed marketing tools that we could use to market our technology and company. It also gave us a better appreciation for how to best leverage our world-class catalytic reactor design and our system skills for future product development."
PCI reset their manufacturing strategy to focus on what they do best, and developed an external component supply infrastructure, which is now considered one of their distinctive strengths. The change in corporate strategy refocused the company towards its core strengths and toward a better capability to advance new products through development and commercialization. Beyond the continuing advancement of the gas turbine catalytic combustor into new applications, this has led to a notable technology spinout development of a downhole catalytic combustor steam generator for heavy oil production, which won a subsequent SBIR Phase I/II and now is drawing significant interest from the oil industry.
The changes PCI made in their business with the assistance of the CAP, "resulted in new strategic partners and a total of $15 million in added governmental and private development support and sales," Burns reported. "This is also leading us to a more advanced development relationship with our industrial customers. The SBIR product success gave us a chance to show our capability, and this is leading to new joint opportunities where we are applying our innovation development skills to our customers' broader needs, beyond applications of our technology."
When asked whether CAP is a process they would recommend to other small businesses, Burns heartily agreed. "CAP is helpful for small businesses, young and old. It was a good process that helped us commercialize a great technology, and in the process we also developed a viable overall PCI product development and commercialization strategy. It helped us figure out what we wanted to be when we grew up." And grow they have.
Founded in 1986, to commercialize novel concepts for ceramic membrane modules, CeraMem Corporation's proprietary technology uses high-surface-area silicon carbide monoliths as membrane supports to produce a family of ceramic membrane products that have the potential to be remarkably low cost and have the high operational stability expected from ceramic membranes. Their customer base includes the DOE, DoD, EPA, NSF, and the USDA, as well as industrial wastewater membrane sys- tem suppliers and end users.
CeraMem's ceramic membranes for liquid separations-microfiltration and ultrafiltration are used by industrial entities for multiple applications in wastewater treatment. Developments in advanced microfiltration and ultrafiltration processes, as well as nanofiltration and pervaporation, will expand the markets and applications for which the membrane technology is applicable. The projected lifecycle costs for the membranes used for liquid separations are comparable to, or lower than, those of polymeric membranes in a number of attractive applications, giving the potential to sell CeraMem's membrane technology into markets once only accessible to polymeric membranes. In addition, the combination of relatively low membrane cost and high ceramic membrane performance, may open new applications previously inaccessible by membranes.
For the 2003 CAP, CeraMem's focus was to complete a business plan geared toward attracting joint venture partners for the manufacture and sale of ceramic membrane products. These products were to be used in filtration applications for various industries, including dairy, pharmaceutical and chemical companies.
"CAP focused us on the business issues that are required to be understood for commercialization. Be it discussions with Dawnbreaker staff, working on the business plan, running through the financials-it forced us to address those issues. As with most technical people, we would much rather talk about technology than business issues. That's what the CAP really does and it has been a stepping stone in our commercialization efforts," remarked Bruce Bishop, President and CEO of CeraMem Corporation.
At the time of their 2003 CAP participation, CeraMem was in discussions concerning partnering with a large U.S. company and though this particular partnership did not come to fruition, Bishop felt that CAP was an essential tool as they considered the future of the business. He went on to say, "We are now able to focus on market drivers, market size, competition and where we fit. It [CAP] really allows us to enter the discussions on commercialization. Those business issues, once we started focusing on them, helped strengthen our proposals to the DOE and other SBIR agencies, because now we are better able to describe the commercialization opportunities."
Since that time, CeraMem has been doing quite well. They have been experiencing $150,000 to $200,000 in membrane module sales per year, with 2004 revenues nearly reaching $2.5 million. They have also been awarded non-SBIR government funded projects and foreign waste water treatment projects totaling $1.3 million, since their CAP participation. Their non-SBIR funding is set to increase soon. "We just received nearly $100,000 in new membrane module orders from a large oil company and anticipate more orders from a European OEM, based on their promotion of our membranes for offshore produced water treatment," said Bishop.
When asked if the CAP was a process he would recommend to other small businesses, Bishop had this to say, "It has been very helpful in trying to understand who we are, what we want to do and what our vision for CeraMem is. You start to look at the business model, and going through that procedure really is a process of self-examination, to a certain degree, and it is really helpful. Small businesses have a number of ways they can go. If you are an SBIR award winner, this is the way to go."
Visit www.ceramem.com
Catalytic Materials is one of only two companies in the world that have patents covering the production of multi-walled nanotubes. In the early 1970s, when Dr. Terry Baker began his work in the area of carbon nanotechnology, the term "nano" hadn't even been coined. At that time, these kinds of materials were deemed to be problems in a number of chemical and nuclear reactor processes. Dr. Baker, and his colleague Nelly Rodriguez, who later became his wife, joined forces and began to examine the possible applications of carbon filaments, based on their knowledge of the materials
Once they understood the chemistry, they focused primarily on how the carbon materials grew and how they might tailor structures from them. With many ideas in hand and encouragement from patent attorney, Henry Naylor, they formed Catalytic Materials in 1995. In the early days, the business was mainly a consulting company, focused on the acquisition of intellectual property. "Though it was expensive, we believed it was a good investment," said Baker, who is now Vice President for Research and Development for Catalytic Materials.
In 2001, Baker and Rodriguez left academia to devote themselves full-time to Catalytic Materials. "And that's where the company really started to grow rapidly, in terms of its interaction with larger corporations," Baker recounted. In 2003, the DOE funding gave them a source of needed support for developing the technology that ultimately led to two processes used in the manufacture of multi-walled nanotubes. It also helped them to gain the intellectual property, which has put them in such a strong position.
The initial focus of the DOE program was to "discover what one could do with methane that had hitherto not been examined," said Baker. In doing so, "they found a process and a catalyst that was particularly active and made a very fine product." Having done that, they began to look at how they might apply this in various areas. "The DOE SBIR program was very much responsible for providing the support for the innovation of process to make multi-walled nanotubes," said Baker.
Today, the company conducts research and development in carbon nanotechnology that will initially be implemented in the electrically conductive/antistatic polymer market. They have developed a comprehensive patent portfolio including the method for the production of the highest quality carbon nanotubes (99% purity). It is their objective to target this $300 million market by offering materials that will improve the flowability, mechanical and optical (transparency) properties of the polymer. Much of their research is being funded by cooperative agreements with a number of large companies, their own equity and DOE SBIR funding. "Our main strength is our experience, knowing how catalysis and the creation of these materials-hydrocarbons and carbon monoxide-play into each other. How you can control the structure of a particular material by the selection of the catalyst and the conditions which you use," he explained. Their strength is displayed in their ability to be able to patent a great deal of this technology. "I would say the more fundamental aspects of carbon nanotechnology and the realization of where these materials may enter the commercial arena, have really been the backbone of our business," said Baker
But, building a business is about more than just the production of the materials, it takes a plan. The CAP helped Catalytic Materials to combine their extensive knowledge of carbon nano technology with much needed business school basics. The business skills they acquired have allowed them to converse with potential partners using a common language. "It [the CAP] made us look at the market and focus more on what to do with the materials. They helped us to focus primarily in the conductive polymer market and the economics of it," recalled Baker.
"We had developed, what I would say was, a mediocre business plan-based on books we had taken out of the library on how to write these things. We were many times at wits end with the program, but at the end of the day, when we look at what we accomplished, we cannot thank them enough. CAP was like learning a new language while taking a crash course in business," Baker remarked. "Now when we sit down with business leaders, we feel that having this business planning behind us allows us to talk from a very strong platform. We can tell by the reception that we get from people that they see the numbers and are impressed with this," said Baker. He went on to say, "I would certainly recommend to any company, with plans on getting into any sort of technology, to go through the program."
With the knowledge of the commercial implications of their product, Catalytic Materials focused primarily on the conductive polymer market because it already exists and because there are materials, used as fillers in a number of polymeric materials that are useful for static dissipation, electromagnetic interference, radio frequency interference. Catalytic Materials can supplant the current materials used with one that requires significantly lower amounts of additives, and because of the low-loading, the polymer maintains its transparent properties. This in itself has many promising applications that are being explored.
Now, Catalytic Materials is experiencing $70,000 in material sales, annually. They have received private industry money, none of which was venture capital, of more than $2.5 million and have received nearly $1 million in SBIR funding. They are also still seeking to form other joint ventures with a number of companies that make polymer fibers."We are allowing some companies to introduce our materials into their processes, which are already operative and which they have markets for, it will also be making their products electrically conductive," explained Baker. "That is going to expand the market dramatically and it's a higher-end market than the current polymer fiber market." Catalytic Materials has already found success, but these new developments are certain to send them to the stratosphere of business achievement.
Established in 1998, Airak, Inc. has developed a number of patented innovations involving optical sensors to monitor electrical parameters as well as advanced, optically-interconnected, high power inverter systems. These inter-related system technologies represent the core of Airak's business focus, which over the last couple of years has moved towards the improvement and manufacturing of optical current voltage sensors for monitoring electrical distribution and the associated electro-optic hardware that goes with that.
Receiving DOE SBIR funding in 2001, Airak developed what was called an Optical Current Sensor, or OCS. The OCS went on to win an R&D 100 Award in 2003 and took third place in the Best of Sensors Expo, along side much larger companies such as, Motorola who took first place and Honeywell who took second. "We were really proud of the basic technology at the time, and those awards in the latter part of '03 were based upon the work we started on '01," said Paul Grems Duncan, president and principal investigator, Airak, Inc.
The DOE SBIR funding received in 2003, for the project titled Optically Isolated HV-IGBT based 5-MW cascaded inverter for DER applications, enabled them to take those basic technologies based around the OCS and begin to manipulate them in such a way as to put them inside what is called an inverter, a high power device that converts DC energy over to AC energy. "The DOE 2003 program allowed us to move things forward in terms of developing a new technology, or actually improving upon the fundamental OCS technology that we had developed in '01, ultimately making it more manufacturable," Duncan remarked. "The OCS is the core of the Optical Distribution Monitoring System (ODMS) which was developed for the commercial market and is also the basis for another system, the Advanced Power Distribution System (APODS) which was developed for the Navy," he explained.
Historically, electrical distribution is heavily under-monitored by utilities, because there has not been a cost-effective technology to do so. This has lead to serious problems for utilities, up to and including black-outs. Airak's ODMS solution brought to the table a cost-effective, safe, unobtrusive optical measurement system that allows utilities to proactively monitor their distribution grid, thereby helping them to reduce outages and improve safety. The ODMS will also assist utilities with the management of capital expenditures, allowing them to more accurately target the monies available to priority projects within their business structure. The primary market for this technology lies mainly with the approximately 900 electrical cooperatives, 2000 municipal utilities and 220 Investor Owned Utilities (IOU) operating in the U.S.
Airak's commercialization strategy is multi-pronged, developing into three distinct paths with respect to the optical measurement technology that they have developed. The first path is their largest opportunity and is tailored under the ODMS. The system is deployed as a blanket across their electrical distribution network to get real time information back from the field and use that information for day to day management of their assets. This load monitoring system gives the utility real-time information concerning how stressed their installed base of equipment is at any time or temperature. To effectively utilize the system a communications methodology must be employed, and Airak offers several solutions ranging from wireless connectivity to standard Ethernet ports to retrieve the information. Airak also provides data visualization capability to understand the data to facilitate translating it into operational information. To provide those additional components, Airak has aligned with Motorola to provide the special communications equipment to be used within the utilities sector and on the data visualization issue, they are negotiating with two different companies, both of which occupy a large segment of Airak's end market, to allow Airak's data input into the vendor's visualization solution.
Airak is also addressing the commercial marketplace by aligning itself with DoD contractors that are first and second tier suppliers to the Navy. "This is a significant effort that represents a potentially large market for us, and correspondingly, we will assist them [the contractor] in the technology transition into their product offering," said Duncan.
The third area of commercialization that Airak is investigating, though not as seriously as the first two areas mentioned because it has smaller profit margin potential, is providing vendors with the basic optical measurement technology, instead of the entire ODMS, to replace existing technologies within vendor products, making them faster, lighter and possibly less expensive.
As Airak contemplates funding their R&D, they look to many different sources. "We've done everything to fund development- from 'boot strap' funding out of our own pockets, to the SBIR/ STTR programs, which funded the lion's share of the development of our intellectual property, as well as the products." In February 2005, Airak was the recipient of a large contract in partnership with the American Competitiveness Institute's MANTECH Program. "Navy PEO Carriers PMS 378 actually allocated $2.15 million for their advanced distribution program, an advanced power distribution monitoring system, and by the time it was all said and done, we were awarded a sub-contract on that program for $1.2 million to MIL-SPEC our OCS and associated electro-optics. We successfully have passed vibration, temperature, and shock qualifications, and now have the only optical current sensor that is certified for use aboard ship," said Duncan. He estimates that that program alone comprises nearly 25 percent of their total R&D expenditures since 1998.
As for their participation in the 2003 DOE CAP and its impact on Airak's commercialization plans, Duncan said that CAP assisted them with the transition from the 'technical' brain into the 'business' brain. He was also very pleased with the market research that was provided to Airak through CAP participation. "They provided us with market research that would have been unattainable to a small business and they helped us to distill that information down," he continued. "So, from a 'moving the company forward' aspect, that has been very, very valuable." One other aspect of CAP has an impact on Airak, and that is the number of leads they were provided from qualified companies. "There is no question about it: participation in CAP is invaluable for getting qualified leads and exposing your technology to them. You can try to advertise, but you have no idea how many eyeballs you are hitting. By participating in the CAP, you know."
Visit www.airak.com
