Turning a Green Business Into Gold Reward follows risk and innovation for these eco-friendly businesses.
Opinions expressed by Entrepreneur contributors are their own.
The timing couldn't be better for those contemplating a leap into green business. The $787 billion federal stimulus bill will make funding available for everything from green construction to alternative fuels, and consumer demand for green products continues to rise. But keeping an eye on the (triple) bottom-line: people, the planet, and profits, is a necessary step to success.
Meet the Green Teams
It doesn't get greener than algae--literally. So when Riggs Eckelberry launched OriginOil in 2007, he says he already had an investor group poised to provide seed funding. The company's main challenge however, has been educating consumers and investors alike on this breakthrough green technology. In his case, transforming algae into a competitor of petroleum gained traction when Exxon Mobil announced their intent to invest billions of dollars in algae as an alternative fuel.
Although OriginOil is the new kid on the block, using his brother's unique technology for microbubbles has helped Eckelberry to position OriginOil against such big players as Exxon Mobil. Additionally he believes the algae fuel industry is so wide open, no one producer will ever dominate. "It calls for a network approach, where we help bring about an industry with OEMs, producers, channel partners, third party application developers, and the full gamut of design-build-manage services," he says.
Patented technology aimed at cleaning up the planet helped launch BlueFire Ethanol in 2007. The concept was originally inspired by a World War II era textbook, though the company likens its acid hydrolysis process to the one used by Doctor Emmett Brown in the film "Back to the Future 2."
The idea to transform bags of garbage into an alternative fuel--let alone a company to do it--didn't happen overnight. BlueFire's CEO, Arnold Klann, had 30 years experience in the traditional energy industry -specifically in petroleum coke and coal-fired power plants, launched three companies and spearheaded research and development before commercializing the Arkenol technology, licensed exclusively with BlueFire Ethanol in North America.
For Barrett Taylor, triathlete and CEO of ECOwatercraft, a zero emission jet ski was as necessary as breathing. "Heavy fumes were disturbing many of the athletes during the swim portion of the race and I was curious whether electric technology could be implemented into watercraft," he explains.
Taylor did extensive research on electric vehicles while in medical school, but a collaboration with Electric Motorsport Inc., producers of the first freeway legal electric motorcycle in the world, got the idea to market.
Like OriginOil, ECOwatercraft still has to work to educate consumers. To those concerned about mixing electricity and water he says "electric boats have been around before gasoline powered boats." To others who fear getting stranded he responds, "gas jet skis run out of fuel all the time. ECOwatercraft is developing a solar lily pad to recharge."
Pioneers of a different sort are at work at TS Designs. Founded in 1977, the T-shirt manufacturing and screen printing business turned green when NAFTA passed. "While that may not seem as sexy as a tracking solar array or biodiesel, we have a passion for making the best damn shirt you've ever worn," says Eric Henry, president. TS Designs has focused on the triple bottom line since 1993; from using water-based inks on their shirts to employing an array of alternative energies to light and heat their facility. What's more, the company landscapes with native plants and produces biodiesel on site to fuel the truck that carries shirts from the main plant to the dye house.
John Ivanko, who with Lisa Kivirist co-authored the award-winning book, ECOpreneuring believes it's possible for green business owners to prosper despite the challenging economic environment because "triple bottom line enterprises have operations that are both conservation-minded and efficient."
If the business grows quickly, there is the temptation "to turn a buck quicker," Ivanko says and he reminds 'ecopreneurs,' "Green is not to be confused with greed."
How They Snagged the Green
Funding is necessary for any new enterprise, sustainable or not. Ivanko and Kivirist have seen people start companies on next to nothing; then grow by reinvesting profits into their business.
ECOwatercraft started on a shoestring. Though he continues to search for major funding, Taylor says, "For the initial startup, my wife and I sold all of our possessions including her car and jewelry, and put the entire project on our backs financially through credit cards, loans, and whatever we had in our bank account."
Ivanko cautions, "Launching a business without encumbering the enterprise with thousands (or millions) of dollars of interest payments can go a long way towards thriving without excessive debt."
He also encourages creative leveraging of resources, much like community supported agriculture (CSA). "Thanks to the Internet, sophisticated software programs, and the ability to create private label products, it's possible to operate without owning a factory or storefront, or any physical inventory by using drop-ship terms with various manufacturers eager to develop an unpaid marketing team," Ivanko says.
Having creative solutions can also give an edge when it comes to funding. Greg Hilton, senior project manager with Sagacious Partners in South Carolina who also works with EngenuitySC and the USC-Columbia Fuel Cell Collaborative says channels are currently cluttered with many new players. "Firms, organizations, and governments will gravitate to those providers who show a clear understanding of the issues and how their products and services will provide solutions," he says.
Standing out from the crowd may be as simple as obtaining a patent for your technology. Tim Williams, shareholder with Dority & Manning, a law firm that specializes in patents, trademarks and copyrights, says entrepreneurs would do well to investigate the playing field before making the investment to apply for one. With applications starting at $6,000 for a simple mechanical case (not including attorney's or government fees) Williams recommends checking the patent and trademark office website first.
Startups may soon be able to tap into e3bank, a newly-established financial institution that promises to be a sustainable lender. Other finance options include a focused investor such as Cleantech Group, LLC or Green Solar Finance.
"One of the only investors that still has the availability of capital and is willing to put it to work is Uncle Sam. Depending on what problem you are solving, look for funding opportunities from the Department of Energy, Department of Defense, or perhaps the USDA," says Christopher Scott, CFO of BlueFire Ethanol. BlueFire was recently awarded funds from the DOE for a second planned ethanol production facility.
When applying for government funding, Scott believes now more than ever, startups need a bulletproof execution plan. "If there are any holes, they will be discovered more quickly than in other times, and instead of getting terms that may be less beneficial, you may not get funded," he says.
But above all, Ivanko reminds would-be green businesses, "Operate in every way possible like a healthy, diversified ecological system. Use nature as the model, both for the enterprise as well as the product or service. In nature, there is no waste."