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    MIT Climate and Energy Ventures class spins out entrepreneurs — and successful companies

    In 2014, a team of MIT students in course 15.366 (Climate and Energy Ventures) developed a plan to commercialize MIT research on how to move information between chips with light instead of electricity, reducing energy usage.After completing the class, which challenges students to identify early customers and pitch their business plan to investors, the team went on to win both grand prizes at the MIT Clean Energy Prize. Today the company, Ayar Labs, has raised a total of $370 million from a group including chip leaders AMD, Intel, and NVIDIA, to scale the manufacturing of its optical chip interconnects.Ayar Labs is one of many companies whose roots can be traced back to 15.366. In fact, more than 150 companies have been founded by alumni of the class since its founding in 2007.In the class, student teams select a technology or idea and determine the best path for its commercialization. The semester-long project, which is accompanied by lectures and mentoring, equips students with real-world experience in launching a business.“The goal is to educate entrepreneurs on how to start companies in the climate and energy space,” says Senior Lecturer Tod Hynes, who co-founded the course and has been teaching since 2008. “We do that through hands-on experience. We require students to engage with customers, talk to potential suppliers, partners, investors, and to practice their pitches to learn from that feedback.”The class attracts hundreds of student applications each year. As one of the catalysts for MIT spinoffs, it is also one reason a 2015 report found that MIT alumni-founded companies had generated roughly $1.9 trillion in annual revenues. If MIT were a country, that figure that would make it the 10th largest economy in the world, according to the report.“’Mens et manus’ (‘mind and hand’) is MIT’s motto, and the hands-on experience we try to provide in this class is hard to beat,” Hynes says. “When you actually go through the process of commercialization in the real world, you learn more and you’re in a better spot. That experiential learning approach really aligns with MIT’s approach.”Simulating a startupThe course was started by Bill Aulet, a professor of the practice at the MIT Sloan School of Management and the managing director of the Martin Trust Center for MIT Entrepreneurship. After serving as an advisor the first year and helping Aulet launch the class, Hynes began teaching the class with Aulet in the fall of 2008. The pair also launched the Climate and Energy Prize around the same time, which continues today and recently received over 150 applications from teams from around the world.A core feature of the class is connecting students in different academic fields. Each year, organizers aim to enroll students with backgrounds in science, engineering, business, and policy.“The class is meant to be accessible to anybody at MIT,” Hynes says, noting the course has also since opened to students from Harvard University. “We’re trying to pull across disciplines.”The class quickly grew in popularity around campus. Over the last few years, the course has had about 150 students apply for 50 spots.“I mentioned Climate and Energy Ventures in my application to MIT,” says Chris Johnson, a second-year graduate student in the Leaders for Global Operations (LGO) Program. “Coming into MIT, I was very interested in sustainability, and energy in particular, and also in startups. I had heard great things about the class, and I waited until my last semester to apply.”The course’s organizers select mostly graduate students, whom they prefer to be in the final year of their program so they can more easily continue working on the venture after the class is finished.“Whether or not students stick with the project from the class, it’s a great experience that will serve them in their careers,” says Jennifer Turliuk, the practice leader for climate and energy artificial intelligence at the Martin Trust Center for Entrepreneurship, who helped teach the class this fall.Hynes describes the course as a venture-building simulation. Before it begins, organizers select up to 30 technologies and ideas that are in the right stage for commercialization. Students can also come into the class with ideas or technologies they want to work on.After a few weeks of introductions and lectures, students form into multidisciplinary teams of about five and begin going through each of the 24 steps of building a startup described in Aulet’s book “Disciplined Entrepreneurship,” which includes things like engaging with potential early customers, quantifying a value proposition, and establishing a business model. Everything builds toward a one-hour final presentation that’s designed to simulate a pitch to investors or government officials.“It’s a lot of work, and because it’s a team-based project, your grade is highly dependent on your team,” Hynes says. “You also get graded by your team; that’s about 10 percent of your grade. We try to encourage people to be proactive and supportive teammates.”Students say the process is fast-paced but rewarding.“It’s definitely demanding,” says Sofie Netteberg, a graduate student who is also in the LGO program at MIT. “Depending on where you’re at with your technology, you can be moving very quickly. That’s the stage that I was in, which I found really engaging. We basically just had a lab technology, and it was like, ‘What do we do next?’ You also get a ton of support from the professors.”From the classroom to the worldThis fall’s final presentations took place at the headquarters of the MIT-affiliated venture firm The Engine in front of an audience of professors, investors, members of foundations supporting entrepreneurship, and more.“We got to hear feedback from people who would be the real next step for the technology if the startup gets up and running,” said Johnson, whose team was commercializing a method for storing energy in concrete. “That was really valuable. We know that these are not only people we might see in the next month or the next funding rounds, but they’re also exactly the type of people that are going to give us the questions we should be thinking about. It was clarifying.”Throughout the semester, students treated the project like a real venture they’d be working on well beyond the length of the class.“No one’s really thinking about this class for the grade; it’s about the learning,” says Netteberg, whose team was encouraged to keep working on their electrolyzer technology designed to more efficiently produce green hydrogen. “We’re not stressed about getting an A. If we want to keep working on this, we want real feedback: What do you think we did well? What do we need to keep working on?”Hynes says several investors expressed interest in supporting the businesses coming out of the class. Moving forward, he hopes students embrace the test-bed environment his team has created for them and try bold new things.“People have been very pragmatic over the years, which is good, but also potentially limiting,” Hynes says. “This is also an opportunity to do something that’s a little further out there — something that has really big potential impact if it comes together. This is the time where students get to experiment, so why not try something big?” More

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    Reducing methane emissions at landfills

    The second-largest driver of global warming is methane, a greenhouse gas 28 times more potent than carbon dioxide. Landfills are a major source of methane, which is created when organic material decomposes underground.

    Now a startup that began at MIT is aiming to significantly reduce methane emissions from landfills with a system that requires no extra land, roads, or electric lines to work. The company, Loci Controls, has developed a solar-powered system that optimizes the collection of methane from landfills so more of it can be converted into natural gas.

    At the center of Loci’s (pronounced “low-sigh”) system is a lunchbox-sized device that attaches to methane collection wells, which vacuum the methane up to the surface for processing. The optimal vacuum force changes with factors like atmospheric pressure and temperature. Loci’s system monitors those factors and adjusts the vacuum force at each well far more frequently than is possible with field technicians making manual adjustments.

    “We expect to reduce methane emissions more than any other company in the world over the next five years,” Loci Controls CEO Peter Quigley ’85 says. The company was founded by Melinda Hale Sims SM ’09, PhD ’12 and Andrew Campanella ’05, SM ’13.

    The reason for Quigley’s optimism is the high concentration of landfill methane emissions. Most landfill emissions in the U.S. come from about 1,000 large dumps. Increasing collection of methane at those sites could make a significant dent in the country’s overall emissions.

    In one landfill where Loci’s system was installed, for instance, the company says it increased methane sales at an annual rate of 180,000 metric tons of carbon dioxide equivalent. That’s about the same as removing 40,000 cars from the road for a year.

    Loci’s system is currently installed on wells in 15 different landfills. Quigley says only about 70 of the 1,000 big landfills in the U.S. sell gas profitably. Most of the others burn the gas. But Loci’s team believes increasing public and regulatory pressure will help expands its potential customer base.

    Uncovering a major problem

    The idea for Loci came from a revelation by Sims’ father, serial entrepreneur Michael Hale SM ’85, PhD ’89. The elder Hale was working in wastewater management when he was contacted by a landfill in New York that wanted help using its excess methane gas.

    “He realized if he could help that particular landfill with the problem, it would apply to almost any landfill,” Sims says.

    At the time, Sims was pursuing her PhD in mechanical engineering at MIT and minoring in entrepreneurship.

    Her father didn’t have time to work on the project, but Sims began exploring technology solutions to improve methane capture at landfills in her business classes. The work was unrelated to her PhD, but her advisor, David Hardt, the Ralph E. and Eloise F. Cross Professor in Manufacturing at MIT, was understanding. (Hardt had also served as PhD advisor for Sim’s father, who was, after all, the person to blame for Sim’s new side project.)

    Sims partnered with Andrew Campanella, then a master’s student focused on electrical engineering, and the two went through the delta v summer accelerator program hosted by the Martin Trust Center for MIT Entrepreneurship.

    Quigley was retired but serving on multiple visiting committees at MIT when he began mentoring Loci’s founders. He’d spent his career commercializing reinforced plastic through two companies, one in the high-performance sporting goods industry and the other in oil field services.

    “What captured my imagination was the emissions-reduction opportunity,” Quigley says.

    Methane is generated in landfills when organic waste decomposes. Some landfill operators capture the methane by drilling hundreds of collection wells. The vacuum pressure of those wells needs to be adjusted to maximize the amount of methane collected, but Quigley says technicians can only make those adjustments manually about once a month.

    Loci’s devices monitor gas composition, temperature, and environmental factors like barometric pressure to optimize vacuum power every hour. The data the controllers collect is aggregated in an analytics platform for technicians to monitor remotely. That data can also be used to pinpoint well failure events, such as flooding during rain, and otherwise improve operations to increase the amount of methane captured.

    “We can adjust the valves automatically, but we also have data that allows on-site operators to identify and remedy problems much more quickly,” Quigley explains.

    Furthering a high-impact mission

    Methane capture at landfills is becoming more urgent as improvements in detection technologies are revealing discrepancies between methane emission estimates and reality in the industry. A new airborne methane sensor deployed by NASA, for instance, found that California landfills have been leaking methane at rates as much as six times greater than estimates from the U.S. Environmental Protection Agency. The difference has major implications for the Earth’s atmosphere.

    A reckoning will have to occur to motivate more waste management companies to start collecting methane and to optimize methane capture. That could come in the form of new collection standards or an increased emphasis on methane collection from investors. (Funds controlled by billionaires Bill Gates and Larry Fink are major investors in waste management companies.)

    For now, Loci’s team, including co-founder and current senior advisor Sims, believes it’s on the road to making a meaningful impact under current market conditions.

    “When I was in grad school, the majority of the focus on emissions was on CO2,” Sims says. “I think methane is a really high-impact place to be focused, and I think it’s been underestimated how valuable it could be to apply technology to the industry.” More

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    Reducing food waste to increase access to affordable foods

    About a third of the world’s food supply never gets eaten. That means the water, labor, energy, and fertilizer that went into growing, processing, and distributing the food is wasted.

    On the other end of the supply chain are cash-strapped consumers, who have been further distressed in recent years by factors like the Covid-19 pandemic and inflation.

    Spoiler Alert, a company founded by two MIT alumni, is helping companies bridge the gap between food waste and food insecurity with a platform connecting major food and beverage brands with discount grocers, retailers, and nonprofits. The platform helps brands discount or donate excess and short-dated inventory days, weeks, and months before it expires.

    “There is a tremendous amount of underutilized data that exists in the manufacturing and distribution space that results in good food going to waste,” says Ricky Ashenfelter MBA ’15, who co-founded the company with Emily Malina MBA ’15.

    Spoiler Alert helps brands manage distressed inventory data, create offers for potential buyers, and review and accept bids. The platform is designed to work with companies’ existing inventory and fulfillment systems, using automation and pricing intelligence to further streamline sales.

    “At a high level, we’re a waste-prevention software built for sales and supply-chain teams,” Ashenfelter says. “You can think of it as a private [business-to-business] eBay of sorts.”

    Spoiler Alert is working with global companies like Nestle, Kraft Heinz, and Danone, as well as discount grocers like the United Grocery Outlet and Misfits Market. Those brands are already using the platform to reduce food waste and get more food on people’s tables.

    “Project Drawdown [a nonprofit working on climate solutions] has identified food waste as the number one priority to address the global climate crisis, so these types of corporate initiatives can be really powerful from an environmental standpoint,” Ashenfelter says, noting the nonprofit estimates food waste accounts for 8 percent of global greenhouse gas emissions. “Contrast that with growing levels of food insecurity and folks not being able to access affordable nutrition, and you start to see how tackling supply-chain inefficiency can have a dramatic impact from both an environmental and a social lens. That’s what motivates us.”

    Untapped data for change

    Ashenfelter came to MIT’s Sloan School of Management after several years in sustainability software and management consulting within the retail and consumer products industries.

    “I was really attracted to transitioning into something much more entrepreneurial, and to leverage not only Sloan’s focus on entrepreneurship, but also the broader MIT ecosystem’s focus on technology, entrepreneurship, clean tech innovation, and other themes along that front,” he says.

    Ashenfelter met Malina at one of Sloan’s admitted students events in 2013, and the founders soon set out to use data to decrease food waste.

    “For us, the idea was clear: How do we better leverage data to manage excess and short-dated inventory?” Ashenfelter says. “How we go about that has evolved over the last six years, but it’s all rooted in solving an enormous climate problem, solving a major food insecurity problem, and from a capitalistic standpoint, helping businesses cut costs and generate revenue from otherwise wasted products.”

    The founders spent many hours in the Martin Trust Center for MIT Entrepreneurship with support from the Sloan Sustainability Initiative, and used Spoiler Alert as a case study in nearly every class they took, thinking through product development, sales, marketing, pricing, and more through their coursework.

    “We brought our idea into just about every action learning class that we could at Sloan and MIT,” Ashenfelter says.

    They also participated in the MIT $100K Entrepreneurship Competition and received support from the Venture Mentoring Service and the IDEAS Global Challenge program.

    Upon graduation, the founders initially began building a platform to facilitate donations of excess inventory, but soon learned big companies’ processes for discounting that inventory were also highly manual. Today, more than 90 percent of Spoiler Alert’s transaction volume is discounted, with the remainder donated.

    Different teams within an organization can upload excess inventory reports to Spoiler Alert’s system, eliminating the need to manually aggregate datasets and preparing what the industry refers to as “blowout lists” to sell. Spoiler Alert uses machine-learning-based tools to help both parties with pricing and negotiations to close deals more quickly.

    “Companies are taking pretty manual and slow approaches to deciding [what to do with excess inventory],” Ashenfelter says. “And when you have slow decision-making, you’re losing days or even weeks of shelf life on that product. That can be the difference between selling product versus donating, and donating versus dumping.”

    Once a deal has been made, Spoiler Alert automatically generates the forms and workflows needed by fulfillment teams to get the product out the door. The relationships companies build on the platform are also a major driver for cutting down waste.

    “We’re providing suppliers with the ability to control where their discounted and donated product ends up,” Ashenfelter says. “That’s really powerful because it allows these CPG brands to ensure that this product is, in many cases, getting to affordable nutrition outlets in underserved communities.”

    Ashenfelter says the majority of inventory goes to regional and national discount grocers, supplemented with extensive purchasing from local and nonprofit grocery chains.

    “Everything we do is oriented around helping sell as much product as possible to a reputable set of buyers at the most fair, equitable prices possible,” Ashenfelter says.

    Scaling for impact

    The pandemic has disrupted many aspects of the food supply chains. But Ashenfelter says it has also accelerated the adoption of digital solutions that can better manage such volatility.

    When Campbell began using Spoiler Alert’s system in 2019, for instance, it achieved a 36 percent increase in discount sales and a 27 percent increase in donations over the first five months.

    Ashenfelter says the results have proven that companies’ sustainability targets can go hand in hand with initiatives that boost their bottom lines. In fact, because Spoiler Alert focuses so much on the untapped revenue associated with food waste, many customers don’t even realize Spoiler Alert is a sustainability company until after they’ve signed on.

    “What’s neat about this program is that it becomes an incredibly powerful case study internally for how sustainability and operational outcomes aren’t in conflict and can drive both business results as well as overall environmental impact,” Ashenfelter says.

    Going forward, Spoiler Alert will continue building out algorithmic solutions that could further cut down on waste internationally and across a wider array of products.

    “At every step in our process, we’re collecting a tremendous amount of data in terms of what is and isn’t selling, at what price point, to which buyers, out of which geographies, and with how much remaining shelf life,” Ashenfelter explains. “We are only starting to scratch the surface in terms of bringing our recommendations engine to life for our suppliers and buyers. Ultimately our goal is to power the waste-free economy, and rooted in that is making better decisions faster, in collaboration with a growing ecosystem of supply chain partners, and with as little manual intervention as possible.” More