Greenstart Hatches Four Startups, Proving Accelerators Work in the Energy Business
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selecting teams of entrepreneurs who have already developed promising technologies, but who need help identifying the most promising markets for their product or recruiting the first few customers. At this stage, founders can also benefit from basic company-building advice, on things like how to connect with investors and how to stay sane as a CEO.
Mitch Lowe, Greenstart’s managing partner, says mentorship is the most important resource the program provides, aside from cash and office space. (In return for a small equity stake, Greenstart invests between $25,000 and $100,000 in each company. At the high end, that’s about four times more than the sums most other venture incubators hand out.) The four companies in Greenstart’s first group got more than 200 hours of coaching from a network of 40 mentors, including venture partners from firms like Kleiner Perkins and Flagship Ventures, insiders from the automobile and petroleum industries, and veterans of Silicon Valley standouts like Pandora and Tesla Motors.
That’s valuable help for companies like Sylvatex that arrive with fleshed-out technologies but without a clear commercialization strategy, Lowe says. Run by CEO Virginia Klausmeier, daughter of the late inventor William Klausmeier, Sylvatex has developed a microemulsion technique that reduces the cost of mixing ethanol and other additives into diesel fuel. With help from Greenstart mentors, including David Perry, founder and CEO of pharmaceutical company Anacor, the company decided to abandon plans to build its own production facilities and instead try to license the technology to diesel producers, who are struggling to meet fuel-efficiency and emissions reductions mandates. “They realized that there was a much faster path to market if they sold their technology to existing producers,” Lowe says.
SmarterShade was in a similar situation. The company—which won $50,000 in this year’s MassChallenge competition in Boston—has developed remote-controlled window cartridges containing sheets of inexpensive polarizing material. By changing the relative position of the sheets, windows can be tinted any shade from clear to dark; according to co-founder Mike Stacey, this mechanical approach can be implemented for less than half the cost of so-called “switchable glass” technologies that change opacity when a voltage is applied.
There could be dozens of ways to bring such a product to market, but SmarterShade needed to identify one strategic partner to help get the cartridges into the field. Through Greenstart’s network, Lowe says, SmarterShade found a leading skylight manufacturer eager to test the technology. It expects to bring a product to market next year.
Jennifer Indovina, president, CEO, and co-founder of Rochester, NY-based Tenrehte Technologies, didn’t need as much commercialization advice: Her company’s “PICOwatt” smart-plug device, which helps building managers wirelessly control the power flowing to plugged-in appliances, won a “Best of CES” award from CNET at the 2010 Consumer Electronics Show in Las Vegas, and is already being used by Lockheed Martin, the Rochester Institute of Technology, and other customers. (Tenrehte is pronounced TEN-rate, and in case you hadn’t noticed, it’s “Ethernet” spelled backwards. “Ethernet was the communications medium for the wired world, and we’re turning that inside out,” Indovina says.)
But what Indovina did need help with was knowing how to run a growing company, and understanding her own limits as an entrepreneur. “As the CEO I thought I should be doing everything, including running down to the hardware store to buy supplies,” she says. Greenstart’s mentors taught her that “in a real company there has to be specialization, or you’ll go insane.” Indovina says Lowe and his co-founders at Greenstart also introduced her to the venture firm that eventually offered the company a term sheet.
Only one of the four Greenstart companies, Wa.tt, arrived with a concept rather than a finished product. And that concept changed completely soon after the term began, according to co-founder James Highsmith. “The idea for the product was a smartphone application that … Next Page »