[Rhodes22-list] The Nerd Gets His New BSME Degree

Wed Sep 8 10:23:43 EDT 2004

Ed,

I graduated from SVSU on August 20, 2004 with my new BS degree in mechanical
engineering.  My final cumulative GPA was 3.806.

I'm still cleaning up a few details regarding the Drying Kinetics Apparatus
which I designed and built as my ME-480/481 Senior Design Project.  Before I
leave, I'm training a new graduate student to use the system because Dr.
Schilling is anxious to publish drying kinetics parameters for a wide range
of biomass materials in the open literature.  Plus, assuming I ever get to
start my company, the drying kinetics parameters for each biomass
application will have to measured on the Drying Kinetics Apparatus in order
to get reliable scale-up design data.

Dr. Schilling & I have filed a patent disclosure as coinventors with the
SVSU legal dept. for our biowaste energy recycle process.  The university's
patent lawyers are still reviewing the current art to see if there are any
infringement issues.  As you might imagine, this area of technology is
pretty heavy with prior art & the review is taking quite a while.  But,
we're quite hopeful the patent will fly.

As part of my MSTP 531 Entrpeneurship Seminar during the winter semester, I
prepared a complete business plan for launching my company which would use
this patented technology.  The company is to be called Bio-Energy Corp.
Bio-Energy Corp. will be an engineering, construction, consulting  company
that will build package turn-key systems for energy recovery in the biomass
industries.  Start-up costs will be in the 1.7 million dollar range.  An
"average" Bio-Energy Corp. system would cost about 1.25 million in terms of
1st quarter 2005 US $.  I've identified a suitable manufacturing site in
Sanford, MI about 6 miles from my house.  Business plans are full of
assumptions & are really a house of cards.  But, according to my best
efforts, Bio-Energy Corp. would have a slight + cash flow by the end of year
1, would break even in year 2, & would start paying quarterly dividends to
the venture capital investors in year 3.  By the end of year 5, the company
would be making about 4 million US$ profit on about 14 million US$ gross
sales.  By the end of year 5, Bio-Energy Corp. would create about 50 high
tech manufacturing jobs.  That would make me the largest employer in
Sanford, MI!  Pretty cool, eh?

Right now, the entire process is on hold as we wait for the patent attorneys
to finish their work.  Because the work was done at the university under
research grants from the Michigan Corn Grower's Association, SVSU "owns" the
patent rights, even though Dr. Schilling & I are the coinventors.  In
addition the contract between the university and the Michigan Corn Growers
Association grants them a piece of any royalty stream from this intellectual
property.  Actually, it feels like everyone else has a piece of this
invention but me!  I've been trying to negotiate an exclusive license to
practice from the university.  There has been an offer from me to the
university on the table since April, 28, 2004.  This offer would basically
pay the university a flat royalty fee, indexed to the rate of inflation per
system sold for the life of the patent.  So far, there have only been
unofficial discussions with the university regarding this offer.  They
wanted me to give them 20% of the company's profits including R&D
expenditures for the life of the patent!  Since R&D expenditures come from
company profits, the university wanted them included in company profits
before computing their cut.  The fellow that was handling this matter for
the university up and quit in the end of July.  His replacement has finally
been named.  As of right now, he is still reading my business plan &
otherwise getting up to speed.  Because I plan to get into other areas
besides biomass, giving 20% of corporate profits + R&D expenditures is
completely unacceptable and unworkable.  In addition, this project put me in
the middle of an "uprising" among the SVSU Science & Engineering College
faculty & students regarding the university's patent policy.  In response,
supposedly, the university is "studying" their patent policy with an eye
towards reforming it in a manner that is more supportive of entrepreurship.
We'll see what happens.  Usually, these kinds of changes have a time
constant which is measured in years.

But, in the meantime, I need to find a job.  I've been finding these
contractual entanglements with the university seem to have actually made me
less marketable within the biomass industries.  Some of the major players in
the corn-to-ethanol market have told me they don't want to even talk to me
or allow visits to their facilities until these issues are settled.  The
Michigan Corn Grower's Association has not been very helpful either.  They
don't return any of my phone calls or e-mails.  When Dr. Schilling & I
presented a progress report to them in August, the director took us aside
afterwards & told us to be very careful who we talked to about this - we
were stepping on some very big toes.  I'm not sure what it all means.

So, I've been looking for work.  The job market is still very tight.  So
far, I have no offers.  It's pretty discouraging.

Thank-you for the article about the corn waste-to-ethanol plant.  I welcome
the coming of plants like this because they still produce huge quantities of
byproducts per lb of ethanol produced.  My process efficiently converts
these byproducts into energy, which makes the entire process more profitable
to run.  In addition, my process makes these plants more able to stay
profitable given the volatile up & down price/supply fluctuations in the
energy, animal feed, & grain commodity markets.

Roger Pihlaja
S/V Dynamic Equilibrium

----- Original Message -----
From: "ed kroposki" <ekroposki at charter.net>
To: "'The Rhodes 22 mail list'" <rhodes22-list at rhodes22.org>
Sent: Tuesday, September 07, 2004 5:48 PM
Subject: [Rhodes22-list] Roger to Ottawa

> Roger:
>
> We have not had a school report lately.  Or a project report for
> that matter.  When do you graduate?
> Are you planning to move to Canada?  See attachment.
>
> Ed K
>
>
>

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