NEXUS-NY Phase 2: On the Path to Commercialization
7 Clean Energy Research Teams Start De-Risking Technology in NEXUS-NY Phase 2
The difference between success and failure is finding focus as early as possible. This is a primary mission of the NEXUS-NY clean energy seed accelerator, and over the last several months, participants have been developing and testing numerous business hypotheses through interactions with industry participants to find this focus. The desired outcome is to validate whether a viable and scalable business model exists, and to decide whether and how best to pursue their commercialization objectives – a process the teams will continue to explore in NEXUS-NY Phase 2.
As Phase 1 of the program came to a close, each team presented to a room of judges and industry experts to share the latest results around their business opportunities. These presentations played a large role in determining which participants would move onto de-risking their technology by building prototypes and seeking third party validation.
When selecting which teams to advance into Phase 2, NEXUS-NY Founding Executive Director Doug Buerkle said, “We asked the entrepreneurs to convince themselves of the business opportunities first. When that happens, it’s usually easy for them to convince us that they’re ready to move to the next level.”
NEXUS-NY selected several judges from the business community to evaluate the team’s business opportunity pitches. The judges looked for answers to key questions. Some of them included:
- Is there a large market opportunity?
- Has the team identified a compelling business model?
- Is the product unique and compelling?
- Does the technology promise a major energy impact?
- Can the team make significant progress in the coming 6 months?
Jim Senall, President of High Tech Rochester, was among the judges. He remarked on the quality of the team presentations as being excellent. “It’s always so impressive to see how much the teams accomplish in just twelve short weeks from the kick-off of the program,” said Senall.
NEXUS-NY is one of the many programs run by High Tech Rochester (HTR). Senall says it’s unique in its statewide diversity of teams, and the high-impact technologies that are being developed. In his experience having watched each cohort participate in Phase 1, some teams learn that their initial assumptions may have been wrong, and that there may not be a market for what they are developing. Senall believes this is a good thing, as teams gain valuable knowledge in months versus years. If one particular idea doesn’t pan out, they have the opportunity to move to a different one.
“Each year the NEXUS-NY teams seem to get stronger and stronger. It’s never easy at the end of Phase 1 to select which teams to move on. It’s usually the market that makes that decision,” added Senall. “We look forward to seeing the others take what they’ve learned in Phase 1 and apply it to their next ideas.”
NEXUS-NY Finalists Represent the Most Promising Clean Energy Technology in NY
The teams moving to the next round of the NEXUS-NY accelerator include: BioƎnergySP, Clarkson University, Cornell, Rensselaer Polytechnic Institute, Rochester Institute of Technology, SUNY Alfred State and University at Buffalo.
Ryne Raffaelle and Brad Sparks are leading the charge of the Rochester Institute of Technology (RIT) team. RIT researchers are working on a novel technology that incorporates patented carbon nanotubes within lithium ion batteries to improve their performance. Sparks says this is what makes their product unique and compelling.
“This has been demonstrated to provide 30-40% more energy than currently available off-the-shelf batteries,” said Sparks. “In particular, this is extremely important for our military and intelligence communities, where extending mission life is critical.”
In addition, the team from RIT is working on a technology that allows these batteries to be stored and shipped safely without charge to meet ever increasing shipping regulations. The core team has been working together for over a decade to develop these technologies.
“We see our primary market opportunities as the military and intelligence communities,” added Sparks. “Specifically, we are looking at developing our high-end batteries for small satellites, remote sensing and unmanned aerial vehicle applications.”
Since joining NEXUS-NY, the RIT researchers have spoken with dozens of potential customers to better focus on the specific market segments. Over the course of the next 6 months in the accelerator, the team will work towards commercialization on the technical side by spending a bulk of their time on improving their initial prototype. Their intent is to reduce the product cost without sacrificing the battery performance. On the commercial side, their goal is to find one or two initial customers to provide market feedback so they can continue to refine their products.
Now in Phase 2, all the researchers will begin building early prototypes and working towards third party validation of customer discovery. Buerkle said, “Typically during Phase 2, teams build prototypes which are aligned with the minimum features that customers want to test based on the interactions they had in first half of the accelerator.”
Theodorian Borca-Tasciuc and Berardo Matalucci represent the Rensselaer Polytechnic Institute (RPI) team. They are seeking to commercialize a novel modular and scalable building system for personalized comfort that can result in energy savings, increased productivity and healthier indoor environments.
RPI presented an early-stage prototype to the judges during the business opportunities event. They are now looking forward to building prototypes that are fully functional, making sure their demonstrations can move from proof-of-concept to real-world applications by verifying their assumptions.
“It’s time to build a complex version of the model. We see it as a portable device, something compact in order to overcome a couple important technical challenges, for example the effects on people and the energy savings,” said Matalucci.
In order to achieve this, the RPI team will take the insights gained from the Phase 1 customer discovery process and from the judges to couple energy efficiency with some other value, having learned that saving energy isn’t as important of a factor to customers as originally anticipated.
“We found that with our product, energy efficiency isn’t a necessity for the customer,” explained Matalucci. “Instead, it’s more important to provide thermal comfort to everyone with a scalable product, especially one that engineers are interested in.”
Matalucci says this is not a simple task, and there are significant problems his team will have to overcome to deliver multiple benefits, including reducing the installation cost, while still providing high aesthetics.
“We’re close. We have already built something that offers a two-fold value proposition. By providing a system for localized heating and cooling we can maximize the comfort of people, and on the other side condition a space where and when needed.” This allows our systems to avoid wasting energy, explained Matalucci. “And since our units are stand alone, meaning they don’t need to be plugged into ducts or pipes, which are unsightly, we also reduce installation costs and technical spaces like shafts and drop-ceilings. All of this combined caters to the customer and increases the real estate value of the building.”
Now the RPI team has to focus on being cost-competitive. This is an obstacle they must overcome by somehow containing the return on investment for their modular building systems to five years or less. For larger installations Matalucci says this could be pushed to 10 years, but after that it doesn’t hold the client’s interest any longer.
The team’s last big takeaway was from the judges, who stressed the importance of addressing product customization for manufacturing. For example, if your product is pink instead of gold, or in a circular shape, how customizable you want it to be impacts the costs related to manufacturing. This is a major concern that Matalucci says his team needs to consider – how to contain the cost of manufacturing while offering a product that is customizable.
To help them on their path to commercialization, the RPI team is in the process of hiring a couple of mechanical engineers to work on an advanced prototype. They are also in contact with some students from the Lally School of Management at Rensselaer to assist them in moving forward with patenting and funding applications.
NEXUS-NY Partnerships Help Catalyze Commercialization Process
Something that distinguishes NEXUS-NY from other accelerators is the program’s partnerships with business leaders to catalyze the commercialization of novel clean energy technologies.
As a NEXUS-NY Phase 2 activity, NEXUS contracts with Excell Partners to provide due-diligence support for each team. Excell is a Venture Capital Fund that invests in seed and early stage high-tech startups in New York state. Over the next several months, program participants will reveal more of their technology and business plans through a series of presentations to Excell.
“The first presentations will focus on getting to know the teams and technology; Excell will provide initial feedback, indicating where they see deficiencies in the business case,” explained Buerkle. “During subsequent presentations, Excell will have a chance to see how their advice has been implemented before assigning analysts who will work as part of the research team. This is certainly not the typical start-up/VC relationship. This is much more friendly.”
NEXUS-NY Phase 2 participants will also continue working with the teaching team which includes a few HTR employees plus several serial entrepreneurs who provide strategic and tactical guidance. New this year, NEXUS-NY advisors, are committing a few hours per week to provide additional support to participants. These advisors are all proven entrepreneurs who would typically not have the time to engage in full mentoring roles, yet they have all agreed to provide high level advice and connections. Advisors include: Christine Whitman, Chairman, CEO and President of Complemar Partners; Alex Zapesochny, President, CEO and Cofounder of iCardiac Technologies; David Dassault, Founder, President and CEO of P1 Industries; Mark Barberio, President of Markapital and board member of Buffalo Angels and Rochester Angel Network; John Frater, local entrepreneur and Adjunct Professor at RIT; and Don Golini, Founder of SANICA Ventures and QED TEchnologies International.
NEXUS-NY Provides Direct Financial Support to Program Participants
In partnership with the New York State Energy Research and Development Authority (NYSERDA), NEXUS-NY will continue to provide participants with funding in Phase 2. Each team has been charged with developing a statement of work that will define what they want to do with the funding. The statement includes what customers they would like to pursue for third party validation, and what they want to test.
“Most of the funding is allocated towards building and testing prototypes.” explained Buerkle. “In the past many teams also form legal entities before the end of Phase 2.”
NEXUS-NY offers additional support for its participants to evaluate their IP and that of potential competitors. NEXUS-NY contracts with the NYS Science + Technology Law Center at Syracuse University, which help participants develop custom IP landscape assessments which meet their individual needs.
Mark Your Calendars for NEXUS-NY Team Pitches
At the end of NEXUS-NY Phase 2, teams will present their technology and businesses to a wide audience of prospective collaborators and investors. These Demo Days will be held in western New York and New York City. They are tentatively scheduled for September and October, 2016.
Now it’s time for the teams to get back to the lab, while continuing to engage customers and develop their go-to-market plans!