sen severe final nsf i corps presentation
TRANSCRIPT
1
Dr. Jason Gu
Co-founder / CEO
412-370-8293
# of customers: ~85 peopleHydrogen sensors in Chlor-alkali
3Founding Team
Dr. Jason Gu
Dr. Peter Foller
Prof. Robert F. Davis
Prof. Lisa M. Porter
Mr. Jacob Melby
Principal inventorCEO and Entrepreneurial Lead
Former Director of R&D Chemical and Optical, PPG IndustriesMarket Exploration and Acquisition
Professor of Materials Science, CMUNational Academy of EngineeringAdvisor and Mentor
Professor of Materials Science, CMUTechnological Development and Principal Investigator
Graduate Student, Carnegie Mellon UniversityPrincipal Engineering Specialist
4
Major Commodity Market – Chlorine Production
Plant cost: $1B
Thorn in the lion’s paw (184 incidents in Europe, 4yrs)
H2 + Cl2 = Co-produced
5
Hazardous Industrial Environments
[Current Standard-Operating Procedure]Once a week monitoring
[Innovation]Real-time data
VS
Licensed Novel technology [H2]
6
Partnership with dominant technology provider in C/A.
Product development 66% completed.
Customer pilot plant test approved. Plant visits.
Market survey sent out to C/A plant managers
7H2/HC Monitoring
In Severe Environments
Efficiency
Severe Environment
Operators
Provide infrastructure
Component sourcing
Direct
Domain Specific Suppliers
Distributors
Sensor SalesMonitoring Services
Royalties
Suppliers/ Manufacturers
Research Institutes and
Journals
Contract Design Shops
Domain Suppliers
Regulatory and Government
FixedSupplier
Economics
Sales and Marketing
Product Development
Production
IP and Expertise
Capital Assets
Applications
Chlorine Production
Regulatory/Insurance
Explored Item
8Value Propositions‘Need-to-have’s ‘Nice-to-have’s
Detects specific species (typically ratio of species)
Sufficient kinetics and sensitivity Signal reliability (no false
positives/negatives) Wireless (if high volumes) User interface (if software) Visualization of data
Can be display on sensor or even warning LEDs
Sensor lifetimes matching replacement cycle of another more crucial part
Extreme kinetics and sensitivity Wireless (if low volumes) Low-cost Extremely Long-lasting Detection of other species Low-power
Minimum viable product:It only has to work, and be easy to use.
9
Efficiency
Severe Environment
Operators
Provide infrastructure
Component sourcing
Direct
Domain Specific Suppliers
Distributors
Sensor SalesMonitoring Services
Royalties
Research Institutes and
Journals
Contract Design Shops +
Suppliers/Manufacturers
Domain Suppliers, Regulatory and
Government
FixedSupplier
Economics
Sales and Marketing
Product Development
Production
IP and Expertise
Capital Assets
Regulatory/Insurance
Minimum Viable Product
Reliably detect species of interest
Easy to use
Sync with other cycle
Wireless(if volume)
Domain Specific Suppliers
(especially if R&D is needed)
Chlorine Production
…
Explored Item
H2/HC Monitoring In Severe
Environments
Applications
Accepted
10Channel Interviews
1. C/A Partner1. Regional
1. Director of R&D2. Director of Marketing3. Director of Product Service
4. Senior Acct Managers5. R&D Engineers
2. Global1. CTO
2. Jeff Farbacher, CEO Accutran
3. Charles Noll, Marcellus Shale Development Group
4. Former GE Employee
5. Tim Fogarty, Director of IW Energy
6. Ed Faust, Global Marketing, Siemens
7. Dr. Bob Lad, President of Environetix
Emerging Markets Interviews1.Jonathan Levine, Hydrate Researcher2.NETL Methane Hydrate RG3.Berkeley sensors group
Technology Supplier
Industrial Plants
Plant #1
Plant #2
Plant #3
Understand Economics of Plant + Sensors
Understand Economics of Technology Supplier
Value pricingWho does this?
12
Efficiency
Severe Environment
Operators
Provide infrastructure
Component sourcing
Direct
Domain Specific Suppliers
Distributors
Sensor SalesMonitoring Services
Royalties
Research Institutes and
Journals
Contract Design Shops +
Suppliers/Manufacturers
Domain Suppliers, Regulatory and
Government
FixedSupplier
Economics
Sales and Marketing
Product Development
Production
IP and Expertise
Capital Assets
Regulatory/Insurance
Reliably detect species of interest
Easy to use
Sync with other maint. cycle
Wireless(if volume)
Domain Specific Suppliers
(especially if R&D is needed)
Chlorine Production
…
Explored Item
Minimum Viable Product
H2/HC Monitoring In Severe
Environments
Applications
Accepted
13Diaphragm Membrane
$240/MT Cl2
Cost of damages + downtime per incident per year
Operational conditions Capital cost per incident Downtime per incident # of cells protected Time between incidents Number of cells, US and worldwide
Diaphragm Membrane Membrane Header
$2,500 $270 $10,600
Value per unit per year
14Soft product launch projected for Q1-Q2 2012General launch projected for Q4 2012
Year Type % Revenue [/year]1 Innovators (US) 2.5 $271,500
Operating costs for 1st year projected to be $350,000
2 Early Adopters 16 $15,040,000
3 Early Majority 50 $47,000,000
4 Late Majority 84 $78,960,000
Full Penetration 100 $94,000,000
Diaphragm Membrane Membrane Header
$2,500 $270 $10,600
15
ensors market2011: $5.6B (US) $15B (World)2014: $6.1B (US) $20B (World)
Hydrogen in Chlorine: $94MHydrogen in [Fluorine, Bromine, Iodine]Hydrocarbons in high pressure (methane hydrate exploration)Hydrogen + hydrocarbons in high temperatures (refineries)Wireless transmission of temperature data at high temperatures (quality assurance)pH and temperature in acidic solutions (steel making)Hydrogen + hydrocarbons in anaerobic conditions (transformer gas monitoring)…..
Fragmented technologies and market
16Next Steps
• NSF SBIR Phase 1 Submitted
• Product launch in chlor-alkali market
• New markets
• Grow, Grow, Grow….
17
Back-up
18
Sensors for improved process control in severe environments
But!Deployment of sensors in severe environments is very
difficult.
represents severe environment sensing technologies and products aimed to serve energy production/generation and commodity chemicals
IdeaBig
19
Hazardous Industrial Environments
Low Volume / High Customization
Where do they get their sensors? Specialized systems distributors
Will fund R&D Existing channel into markets
Industry technology providers Will fund R&D Excellent channel into specific market
Specialized sensor providers
Current Chlor-alkali Partner
21
End Users
Direct Sales LicensingDistribution Partnership
Direct Marketing Possible if localized
customer base – Very difficult
Very difficult to gain internal approval for infrastructural applications
Sourcing Agency Not possible if there is
competition from a larger supplier
Agency will not risk relationship with bigger firm if only for a marginally better product
Specific industry supplier[Chosen path for H2 in C/A]
If no overlap in product offering, then great deal
Will fund research and development to add to their product offering
Generally no desire to enter broader market
Strong ties with market
Sensor distributor Potential source of
competition if marketing similar product
If allow them to access different branch of market, then OK
Specific industry supplier Depends on product
control If no control, then bad
arrangement. No guarantee on service or QC
If control, then can be a good arrangement
Sensor distributor Potential source of
direct competition If allow them to access
different branch of market, then OK
22Value Add Interviews
• Industry clients– Chlor-Alkali Partner– Dr. Peter Foller, Former Director of R&D, PPG– Former C/A plant employees
• Domain Experts– Prof. Ruby Ghosh– Prof. Anita Spetz– John Matsumura– John Crofton– Former employee of hydrogen sensors company– Dr. Harpreet Gulati– I2T Consulting Services– Chevron Advanced Technologies
23Interviews1. C/A Partner
1. Global Director of Technology Seek,
2. Regional Engineers, Senior C/A Client Manager
2. Dr. Peter Foller, Former Director of R&D chemical and Optical, PPG
3. Tim Fogarty, Former Director of IW Energy
4. Ann Truschel, Corporate Insurance Broker
5. Gerald Driggs, Ground Floor Consulting
6. Custom semiconductor grower
7. Funding organization
Emerging Markets Interviews1.Dr. Gary Hunter, NASA Glenn Research Center2.Frank Stienke, Schlumberger Affiliate3.Eilis Rosenbaum and Jonathan Levine, Hydrate Researchers4.Pine Liu, Entrepreneur in Smart Sensor Monitoring5.Jim Miller, CMU Researcher
Drying Towers
Liquifaction
Each step process has different risk premium associated Detection limit of the sensor required is different for each
step of the process. Discussions are in cell technologies
Price the same product differently based on what we protect as opposed to an agglomerate value add.
#GOAL
Cell Technologies
Current MeasurementGas chromatograph
25
Safety
Efficiency
Environmental
Severe Environment
Operators
Provide infrastructure
Component sourcing
Direct
Domain Specific Suppliers
Distributors
Sensor SalesMonitoring Services
Royalties
Suppliers/ Manufacturers
Research Institutes and
Journals
Contract Design Shops
Domain Suppliers
Regulatory and Government
FixedSupplier
Economics
Sales and Marketing
Product Development
Production
IP and Expertise
Capital Assets
Chlorine Production
H2/HC Monitoring In Severe
Environments
Applications
26Potential Product Offerings
Diaphragm Membrane Membrane Header
Sensitivity 0.1 vol.% 0.5 vol.% ?
Response Time < 5 sec. < 30 sec. ?
Data Transmission Wireless N/A ?
Power Supply Scam + Batteries External ?
Display LCD LED Indicator ?
Longevity 1 year 1 year ?
Assay H2, H2O H2 ?
Price $2,000 $250 $8,000
27
Diaphragm Membrane Membrane Header
Price $2,000 - $2,000
World (include US) 26,400 - 2,900
Total Revenue for
is $58,600,000
Year Type % Revenue [/year]1 Innovators (US) 2.5 $271,500
Operating costs for 1st year projected to be $350,000
2 Early Adopters 16 $9,376,000
3 Early Majority 50 $29,300,000
4 Late Majority 84 $49,224,000
C/A Distribution Partner Margin = 20%
Laboratory Industrial
1. Hydrate research2. Micro-temperature
measurement and heating
3. Wireless smart building control
1. C/A2. Transformer gas
monitoring3. Wireless smart building
control
Achieve sales in both ends of the spectrum and all other applications fall within possible demonstrated capability
#GOAL
#KILLER APPChlorine production
29H2/HC Monitoring
In Severe Environments
Safety
Efficiency
Environmental
Severe Environment
Operators
Provide infrastructure
Component sourcing
Direct
Domain Specific Suppliers
Distributors
Sensor SalesMonitoring Services
Royalties
Suppliers/ Manufacturers
Research Institutes and
Journals
Contract Design Shops
Domain Suppliers
Regulatory and Government
FixedSupplier
Economics
Sales and Marketing
Product Development
Production
IP and Expertise
Capital Assets
Applications
Chlorine Production
30H2/HC Monitoring
In Severe Environments
Efficiency
Severe Environment
Operators
Provide infrastructure
Component sourcing
Direct
Domain Specific Suppliers
Distributors
Sensor SalesMonitoring Services
Royalties
Research Institutes and
Journals
Contract Design Shops +
Suppliers/Manufacturers
Domain Suppliers, Regulatory and
Government
FixedSupplier
Economics
Sales and Marketing
Product Development
Production
IP and Expertise
Capital Assets
Regulatory/Insurance
Minimum Viable Product
Reliably detect species of interest
Easy to use
Sync with other cycle
Wireless(if volume)
Domain Specific Suppliers
(especially if R&D is needed)
Applications
Chlorine Production
Oil and Gas
Power Infrastructure
…
31H2/HC Monitoring
In Severe Environments
Efficiency
Severe Environment
Operators
Provide infrastructure
Component sourcing
Direct
Domain Specific Suppliers
Distributors
Sensor SalesMonitoring Services
Royalties
Research Institutes and
Journals
Contract Design Shops +
Suppliers/Manufacturers
Domain Suppliers, Regulatory and
Government
FixedSupplier
Economics
Sales and Marketing
Product Development
Production
IP and Expertise
Capital Assets
Regulatory/Insurance
Minimum Viable Product
Reliably detect species of interest
Easy to use
Sync with other maint. cycle
Wireless(if volume)
Domain Specific Suppliers
(especially if R&D is needed)
Applications
Chlorine Production
Oil and Gas
Power Infrastructure
…