Initial Idea & Market Opportunity Estimate Total available market• Our invented nanogrids™(c) for environmentaltechnology offers inexpensive, nanotechnologiesextremely fast and efficient 2010: $6.1bhydrocarbon decomposition 2014: $21.8b (projected)• It has potential uses in oildecomposition/ environmental Served Available Marketremediation environmental remediation 40% of total market• Focus on Gulf Oil Spill clean-up efforts Target Market $8b Ref: F. Boehm, Nanotechnology in Environmental Applications, BCC Research, 2006; NOAA, Gulf Spill Restoration, 2011 (c) copyright 2011
Team Members PI: PerenaGouma, tenured Associate Professor, Dept of Materials Science & Engineering, SUNY Stony Brook; Director of Center for Nanomaterials& Sensor Development; Fulbright Scholar and NSF grantee since 2002. Has published over 100 research articles on ceramic nanomaterials and their functional applications; she holds 4 US patents Lead: Jusang Lee, doctoral candidate in the PI’s research group; he has published research-based and review papers; he is a co-inventor along with the PI of the nanogrids™ technology Mentor: Clive Clayton, founder Director of the SPIR program at SUNY; Leading Professor in Materials Science & Engineering, SUNY Stony Brook; Fellow of the Electrochemical Society; serving on advisory board of BASF’s Rensselaer NY Ecology Center
So, Here’s What We Did TESTED THE CUSTOMER SEGMENTS HYPOTHESISCompany Contact Person Lessons LearnedDow Chemical Ventures Steve Hahn To focus on water cleaning systems; efficiency of catalyst is the key featureOceanside Water Pollution AlexandreMiot To focus on petroleum-based contamination;Control Plant, SF, CA) skimmingEastern Environmental Deb Engelhardt, Current practices: spill tech pads; Regen OxSolutions, Inc (LI, NY) Louis Bascelli, (oxidizer) Joseph NapoliMiller Environmental (LI, NY) Dave Reardon Got suggestions for pilot studies; projects cost vary a lotDEC (region 1, NY) Karen Gomez State environmental regulations; contractorsEco-Test Babylon (LI, NY) Thomas Powell Water quality testing procedures and EPA standardsGES Edward Savarese Current practice: pump and treat; geologists org. contactDavid Tonjes DT&S-SBU; Customer is the Env. Engineer consultantWRS environmental; Environtrac Front desk Talked to their R&D people(LI, NY) personnel
Here’s What We FoundTarget Market: Petroleum-Oil Polluted Water Remediation • Industry is excited about innovative products/solutions • Problems are diverse; Common pollutants: gasoline, fuels • Makes no sense to directly sell and ship our products • Need to identify distributors and partner with them • No Leasing • Our competitive advantage could be that we offer fast remediation solutions
So, Here’s What We Did ASSESSED THE MARKET TYPE Talked to Dealers of Environmental Remediation Products ECS Environmental Approached Key Distributors Compliance (MA) Talked to Remediation Specialists in Numerous AECOM (MA) Remediation Companies We Went on a Field Study to Eyewitness the Kerfoot Challenges Associated with Remediating Technologies, Inc Underground Oil Spills (MA) EnviroTrac (LI, NY) BKW Environmental (TX/PA) Advanced Environmental Solutions (MA)
So, Here’s What We Found NewProduct for Niche Segment of Existing Market• Remediation treatments of petroleum-oil contaminated water almost leave residual hydrocarbon contamination levels that prevent the disposal of the remediated water to the environment• Our nanocatalystscan be used to fully remediate hydrocarbons and to provide clean water• However, is there a sizeable market for our technology?• What is it?• Does the size of the opportunity make it worth pursuing it further?
So, Here’s What We Did Packaging Options & Cost of Manufacturing•Came up with differentPackaging Options for our product• Contacted 30 Potential Customers about our product• Tried to Recruit Members for IAB• Calculated the Cost of In-House Manufacturing• Produced a Revenue Model for Our Company Packaging options •Rolls of fabric-like material • Blankets • Pads /mats
So, Here’s What We Found Industry likes our product and pricing Our Product* Estimated Cost ExistingProductinMarket Rolls of fabric-like material $10 U*** (Sold per square foot) Oil Absorbent $ 20 Blankets (3x2 .5 feet) $50 P***Oil-Only Weighted Absorbent Blanket $ 112 Pads mat for small spill $30 B*** INDUSTRIES Buff Oil (15" x 18“) Absorb Pads $ 51* Our product description:• new nanotechnology that collects & decomposes oil in water, in-situ• It can hold oil up to 20 times its weight, floats in water, and uses sunlightto break down hydrocarbons into eco friendly products
Industry Expert/Customer Testimonials “I feel your purchase prices are too high for the mass of the remediation market. For a massive spill of 100,000 gallons or more, the cost would compare unfavorable with skimming and transporting for reclamation. For small spills your product is in competition with the cost of conventional absorbents plus landfill disposal. In this case, your $10 per sq. foot compares with $10-16 per ton landfill disposal.” Dan Gray, Hepaco Inc., Tucker, GA. “I think that the pricing is right on, I think it shouldn’t be very difficult to sell the fabric, especially since its eco-friendly. Would these then, in theory, be able to be thrown in the trash along with MSW? Here on LI most of our garbage is burned, what type of off gasses are produced when these are incinerated? Also, would this product work on water/ocean/river spills?” James Cressy, Project Manager, Impact Environmental
So, Here’s What We FoundProduced Water Added Key Customer Segment “Produced water”: Discharged in off-shore oil-producing areas Fracking creates large amounts of wastewater Current energy exploration and extraction in US creates 15-20 billion barrels of produced water / year Worldwide, estimates top 50 billion barrels Energy companies pay between $3 – $12 to dispose of each barrel of produced waterWHAT IS BTEX?BTEX is the abbreviation used Produced water is usually treated to remove most free oilfor four compounds found inpetroleum products. The compounds are benzene, Need to treat the remaining amount of soluble andtoluene, ethylbenzene, and volatile petroleum hydrocarbonsxylenes. BTEX average concentration remaining about 5mg/L Allowable limit of BTEX in drinking water 5mg/L
What is the Problem We Solve?• Our product can contain the volatile petroleum hydrocarbons (e.g. benzene) and subsequently decompose them either in-situ or off-site• It can be used as the final remediation step in the “produced water” clean up• It can, in principle, turn “produced water” from wastewater to drinkable water while treating on-site• New legislation expected to cancel the Energy Industry’s exception from the Clean Water Act, thus favoring “new, self-contained, on-site water treatment”• The current market for treating produced water is estimated to exceed $4.3 billionfor next 5 years
Revenue model diagramFirst year revenues:20 SME of $100,000 sales/year= $2M2 LC of $1M /year =$2M 60first year revenues : $4MSecond year revenues:75% retention of SME 5015 SME of $150,000 sales/year= $2.25M2 LC: $5M sales/yearsecond year revenues $7,25M 40 ($M)Third year revenues:maintain the domestic levels with existingcustomers but expand international sales 30to $3.5MThis will set us over $10M 20Fourth year revenues:Add new line of products for existingmarket; expand into adjacent markets(off-site remediation; water purification; 10etc)Revenues to reach $50M 0 Year 1 Year 2 Year 3 Year 4
What’s Next The PI and Lead are forming a company (C-corp) The mentor will maintain advisory role Ongoing negotiations for exclusive licensing of IP in progress Seek seed funding from investors, VCs, SBIR, SUNY’s economic development office, NYSERDA Explore interactions with Pall and Siemens Water Technologies on developing integrated solutions/licensing IP Explore opportunities for women-owned businesses Disseminate core principles learned into the University’s incubator program through mentor’s efforts
Stony Brook University Office of Technology Licensing and Industry Relations The Office of Technology Licensing and Industry Relations (OTLIR) is an entity of the Research Foundation for State University of New York, which manages the intellectual property for esteemed SUNY faculty members and acts a liaison for academic-industry interactions. Exclusive License General Terms: Clearly defined field of use Diligence milestones for compliance and assurance of commercialization Up-front payment Patent cost reimbursement Financial milestone payments based on product sales and commercial milestones Sublicensing and Assignment terms Limitations on liability including insurance and indemnification
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