A message to entrepreneurs: 'You must solve a problem'

03/26/2007
By From the Lowell Sun

By TOM SPOTH, Sun Staff
Lowell Sun

LOWELL -- If oil is like heroin, as President Bush insinuated recently in his State of the Union address, then clean energy can be the methadone that allows the country to kick its addiction.

Renewable-energy products help solve a problem -- a big problem.

And that's the key for entrepreneurs looking to land venture capital, according to presenters at an "Invention to Venture" conference held Friday at UMass Lowell.

"What problem are you solving?" Bob Crowley, president of the Massachusetts Technology Development Corp., asked attendees. "If you're not solving a problem, nobody's going to buy anything."

Crowley's opinion should matter to those looking for crucial cash to get their ideas off the ground. The MTDC is a quasi-public venture capital firm that invests in early-stage technology companies in Massachusetts.

That's what Lowell-based Konarka Technologies was in July 2001, when its founders decided that research in solar technology conducted at UMass Lowell might have commercial applications. Since that time, the company has raked in about $60 million in venture funding, and has already signed contracts to provide the U.S. military with its flexible, durable solar panels.

"If you identify a real societal need such as renewable energy, and if you can solve this problem, the world will beat a path to your door," said Ross Guadiana, Konarka's vice president of research and development.

Having a blockbuster idea is only half the battle, though.

"If you're going off with a great idea and no business plan, it's hard to sell that first piece of equipment," said Jon Talbott, co-founder of the Merrimack, N.H., firm GT Equipment Technologies.

Crowley put it more bluntly.

"If you have a patent and a dollar and a quarter, that might get you on the MBTA," he joked.

Guadiana said Konarka was able to successfully sell its business model to investors, navigating problems like a lack of space (the company was able to use UMass Lowell laboratories) and the high cost of solar energy (Konarka found a cheaper method of manufacturing its panels).

Now the company is getting recognition as an innovator from national publications, the U.S. government, as most importantly, private investors. Its Power Plastic, while not on the market yet, can be integrated into rooftops, windows, and even clothing to generate power.

They couldn't have done it without venture capital.

"You've got to raise money," Guadiana said. "Nine times out of ten, you can't do this in your garage. You've got to convince somebody that your idea is reasonable."

Friday's event was aimed at negotiators on both sides of that table. Humera Fasihuddin, the Invention to Venture program director for the National Collegiate Inventors and Innovators Alliance, emphasized the significance of networking.

"One of the most important things you can do today is give away a stack of business cards," she said.