PALO ALTO, Calif. -- Reporter's Notebook -- Industrial Origami has one of the most important attributes of a greentech startup these days. Namely, customers.
The San Francisco-based company, which has come up with a way to build products out of sheet metal more inexpensively, has already installed some of its production processes at Fortune 100 companies, according to CEO Rick Holman, during a startup cavalcade at the Always On Stanford Summit taking place today. He wouldn't identify them, and would not say how extensively these customers were using Industrial's products, but a win is a win.
If anything, the idea topped the ones presented by the other three startups. Industrial has, essentially, come up with a way to cut "smiles" or tabs into sheet metal that make it easier to assemble full-fledged products. An oven made with its processes was reduced from seven components to four. A complete car chassis can be assembled from 36 parts.
Fewer parts means less cost: 20 percent or more by Industrial's calculation. The company will initially target appliance and car manufacturers. Products can be shipped flat and assembled later, allowing more to fit into a single container.
The company, though, faces two challenges. The first is that it requires manufacturers – who are known for being very conservative – to retrofit their lines. Changing an oven line might cost $2 million. Auto manufacturing lines can run well over $500 million. "The biggest issue is existing manufacturing methods and the fear of doing something new," he said. To show it works, Industrial re-designs an existing product to run on its technology.
Second, the company doesn't sell equipment. Instead, it licenses intellectual property and then collects a royalty based on sales or costs saved. Most manufacturers would rather remove their four front teeth with a pair of vise-grips before paying royalties, so negotiations will likely be an uphill climb.
VestaCare was the second most promising. It wants to create a digital payment and documentation system for medical practices, particularly for practices with 50 or fewer doctors. Six billion paper checks get sent a year at a cost of $7 to $10 billion. Minnesota and 12 Blue Cross organizations are going to insist on electronic payment and accounting at the start of 2010.
also presented its technology. The company erects digesters that convert manure into methane. BioEnergy builds, maintains and operates the digesters itself and then sells the gas under fixed contracts. (It also sells sulfur extracted from the manure harvested during the methane extraction process and will also derive revenue from carbon credits.) BioEnergy shares some of its revenue with farmers. The process isn't entirely green – carbon dioxide in the gas from the manure has to be burned off before the methane can be sent down a pipeline – but it does eliminate many of the hazards associated with manure.
So far, it has 30 dairies under 10-year supply contracts and a fixed price contract for gas with Pacific Gas and Electric. In all, there are 70,000 cows contributing gas. There are 1.8 million cows in the California Central Valley.
The problem? It's a bit capital intensive. Digesters are essentially really big ponds. It takes about 20,000 cows at each location to break even, said CEO David Albers. Other companies such as Microgy have also struggled to make a profit with manure power. Still, Albers says his process is far less capital intensive than Microgy's and BioEnergy does have a contract with PG&E.
PlanetTran. I asked the person behind me after the presentation, "So what do they do?" He couldn't figure it out either. Finally, we pieced it together. It is a taxi service that uses Priuses instead of regular cars. They have 35 cars in Boston and 15 in San Francisco. "We are not car rental. We are not mass transit. We are not car share," said CEO Seth Riney.
Customers can reserve an automobile online. Receipts are offered as downloadable PDFs, and customers also receive a statement on how much carbon they saved using PlanetTran.
The problem, however, is that most taxi rides begin at the airport, where you really don't care what you get, and at 2:00 a.m. where you probably can't recite the alphabet forward let alone read a carbon accounting statement.Image of an Industrial Origami sheet-metal cube courtesy the company