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This article was prepared for the November 28, 2001 edition of
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Life in the Fast Lane
In preparing for a power outage, should a business
spend a lot of money to prepare for the worst case scenario? Or, like
an ostrich, ignore the one-in-a-thousand risk? The four young partners
in Princeton Power Systems Inc., all June graduates of Princeton
University,
think they have a cost-effective middle ground: a less expensive way
to fend off power interruptions.
Princeton Power Systems (PPS) is licensing a patent for a power
conversion
technology that can be used for an uninterruptible power supply (UPS)
device, like a giant voltage regulator. The patent is for software
that controls the device and enables it to protect against brief power
flickers as well as uneven current. In the event of a prolonged
blackout
it will not help.
In the larger versions it is about the size of a refrigerator, and
it will sit outside a building and modulate power for a high tech
manufacturing
operation. PPS is designing and manufacturing this power conditioning
device, which costs significantly less — $100 to $300 per kilowatt
hour less — than its competition.
The four-person firm is tapping people power — friendships and
connections — for its startup. Good friends and roommates all,
they moved into a house on Wilton Street in Princeton when they
graduated
from the university’s engineering school last June. All four had taken
the entrepreneurship course taught by Ed Zschau, the university’s
guru on that topic. Zschau picked them to occupy his incubator space,
the New Enterprise Laboratory, located in the university’s former
power plant on the Forrestal Campus. Their current diet consists
mainly
of hot dogs, but they are getting the company up and going.
Zschau also introduced them to an angel funder, Greg Olsen. Olsen
knows a thing or two about startups, having started and sold one
(Epitaxx)
and flourished with another (Sensors Unlimited, at Princeton Service
Center). He took a liking to the four engineers and made a substantial
investment in time and money. “I invested in them because they
are four really bright guys with integrity and a great idea,”
says Olsen. “Electric power will be a very exciting industry
during
the next decade. These guys are on the ground floor of an industry
that is undergoing rapid change. What better place for a startup?”
The patent for their device is held by one of the
partners’
fathers, Dr. Rudy Limpaecher. “We have an exclusive license to
the patent, written by Dr. Limpaecher and Erik,” says Darren
Hammell,
the young CEO. “We hope to research this, develop it, and have
a product out in less than a year. We hope to build up this product,
sell a bunch, and keep researching for more products.”
Erik Limpaecher wrote the business plan in Zschau’s class; he is
director
of technical development. Limpaecher and John Lerch, the COO, were
electrical engineering majors. Lerch hails from Fair Lawn, and his
father runs a paper mill. Mark Holveck, director of engineering, was
a mechanical engineering major. He grew up in Mountain Lakes; his
mother works for Telemark and his father had been vice president of
Footlocker. Hammell, a computer science engineer, grew up in East
Lyme, Connecticut, where his mother taught high school and his father
has a human factors engineering consulting firm.
In spite of their age, the four have been received well by executives
in the power industry. “Being young so far has helped us out a
lot,” says Hammell, “especially in the power industry, where
there are not many young people at all. Everybody is excited to try
to get us involved.” It helps, he says, that they are working
with three mentors with wide experience.
“We are all completely equal,” says Hammell. “But our
board of advisors — Ed, Rudy, Greg — told us we needed
somebody
to be president, and said `You guys know better than we do who should
do that.’ Since I had focused on the business aspects, we figured
I would play that role.”
“Greg has been learning about the power industry and passing all
the information he gets to us. We see him at least weekly, and
sometimes
when we meet with people, he comes along.”
The company has raised $550,000 from private funds, and most of this
is currently going for salary and R&D expenses. “I invested
alongside
Greg on the same basis that he did,” says Zschau. A 1961 Princeton
graduate with a PhD from Stanford, he has founded a company and been
(successively), a Congressman, a venture capitalist, an IBM executive
and a Harvard Business School teacher. His facility, decidedly
downscale,
is rented space in an old power plant on the Forrestal Campus. The
other current tenant in Zschau’s incubator space is a dotcom, Onclave
(U.S. 1, April 25).
“This summer we were working out of a dorm room in Pyne Hall to
do the market research and talking about how hot it was,” says
Hammell. “Ed said to check out his lab, that it had air
conditioning.
He told us a couple of times and we finally said it was a good
idea.”
The four Princeton Power partners were able to scrounge excess
equipment
from a company where Limpaecher’s father had worked. Into a
dilapidated
area that used to be the kitchen, they put down a carpet and brought
in some almost free office furniture. Additional electricity had to
be brought in to run the prototype.
The firm’s corporate attorney is Tom Dalton at Drinker Biddle. To
market their product, they are talking to utilities and going to
conferences,
such as the IEEE convention in Atlanta in October. The four men plan
to do their own assembly for a while.
Through the New Jersey Commission on Science and Technology they
applied
for a “springboard” loan worth from $250,000 to $300,000.
“We are also looking at Small Business Innovation Research
funding,”
he says.
The first prototype: a voltage regulator for an uninterrupted power
source (UPS) device. All the UPS devices now on the market require
the use of a powerful battery — in case the power goes out —
and this eats up an additional $300 per kilowatt upfront cost.
Hammell’s
company would start out making voltage regulators that can cover brief
outages of from 350 to 1,000 kilowatts.
“The UPS business is very big and established,” says Hammell.
“We solve the problem at half the cost. But a lot of facilities
are averse to installing UPS, because the batteries can cost up to
$50,000 and have to be replaced every three years,” he says.
Products
made by two competitors, SoftSwitching Technologies in Wisconsin and
S & C Electric in Chicago, are based on older technologies and cost
twice as much, he says.
Yet a manufacturer who ignores the problem will run an expensive risk.
“Losing power can knock out a lot of machines and interrupt a
continuous process,” says Hammell. “If they are making
semiconductor
chips or cars, and the voltage sags, it will damage all the chips
and the machines will have to be stopped and cleaned and recalibrated,
resulting in as much as five hours of downtime.” Nevertheless,
Hammell’s voltage regulator would not take care of extended outages.
For these, batteries are needed. But Hammell insists that his
battery-less
regulator will take care of outages amounting to just a fraction of
a second, and these comprise 95 percent of the problem. “We could
be the redundant system, so the battery-supplied system could be used
as little as possible, which would save money.”
PPS would also use its patent to make variable speed
drives. Variable speed drives control the speed of the motors that
run in almost any mechanical device, from the fan in an air
conditioner
to the fan in an industrial pump. “It’s a $10 billion market,”
says Hammell. One major user would be makers of central air
conditioning
for an entire building. “The fan that pushes that around is
enormous,”
says Hammell. “You need a big drive to power that fan, and with
ours you can create energy savings of 30 percent.”
“The old motor drives run at a constant speed. They are either
on or off,” explains Hammell. “But since variable speed drives
save electricity and money, California has mandated that all new
drives
will have to be variable speed. Ours would be able to protect against
power fluctuations, whereas competitive devices would have to add
that feature as an extra.” A third potential product for PPS’
power conversion technology will be new windmill technologies, which
convert the power from the blade and connect to the utility grid.
“Our box will do that much more efficiently than what is out there
right now,” he says.
The fourth product might involve distributed generation. “Instead
of relying wholly on utility power, you can put a fuel cell next to
a facility. Our device would be used to take the fuel cell energy
and convert it into usable AC power,” says Hammell.
“Our big decision is about which market is really right for the
taking right now,” says Hammell. “We’re all pretty stubborn,
so we have a lot of debates on which direction the product should
go, but there is nothing we can’t work out. We’re such good
friends.”
— Barbara Fox
Princeton Power Systems Inc., 100-C Forrestal Road,Forrestal Campus, Princeton 08540. Darren Hammell, CEO. 609-258-5994;fax, 609-258-7329. Home page: www.princetonpower.comTop Of PageHome HealthIt doesn’t take much demographic knowledge to determinethat healthcare is a growth industry. So when Ian and Marie Griffithswanted to open a family business, that’s where they started. Mariehad been a home health aide in her student years, so she knew whatthat entailed.And they had first-hand experience with the need for home health care.”My uncle was dying in the hospital and wanted to have care athome. Unfortunately he didn’t get it,” says Griffiths. “Butthe need was definitely there.”Unlike many family businesses, this one did not need bookkeeping help,because both the Griffiths are accountants by profession. They hopeto break even in the next three or four months.After looking at buying a franchise they decided the margins weretoo small. “We didn’t need another agency to tell us how it shouldbe done,” he says. They are on call 24 hours a day, seven daysa week. “We are the actual ones who are responding,” saysIan. “It is a dream we have always pursued, but nothing in lifeis easy, whether you work in the corporate world or for yourself.”Ian Griffiths was born in Jamaica, where his father worked for ShellCorp. and his mother did social work, government services for elderlypeople and children. He met his future wife at Rutgers Newark, andthe pair graduated in 1996. Her post graduation jobs includedaccountingstints at Panasonic in Secaucus and RCN, and her current full-timejob is at the Federal Reserve Bank in Newark.Meanwhile Ian worked long hours as fund accountant at OMR Systemsin the Bloomberg complex on Route 518. “It was a very demandingschedule,” he says, “because we maintained the same hoursas the stock market.”So when son Nathaniel was born in January, 2000, they started to dosome serious research. “We spoke to people in the industry. Wewent to the libraries and visited websites and found that it was thefastest growing field in the health care industry,” saysGriffiths.Months of paperwork later, the company had a license from theDepartmentof Consumer Affairs.Idam has some private clients but also has contracts to provideservicesfor the state and county. “The typical care need is for homemakersto do personal care — bathing, dressing, and grooming — andsome meal preparation and light household chores. The typical visitvaries from two to four hours,” says Griffiths.The Griffiths have a 10-person nursing staff. Suzette Gray handlesthe health matters and training, and Dania Salerno, the nursingsupervisor,handles some of the assessments. But they were surprised at theshortageof good care professionals. Home health aids must go through atrainingprogram and be licensed; unlicensed caregivers are restricted as tothe level of care they can provide.”Because it is a family-oriented business, we understand the needsof the client and the caregiver,” says Marie. “They want toknow that the agency cares.””We try to be positive about everything,” says Ian. “Wetry not to get too low. It is a part of my faith, that God wouldn’tbring us this far to leave us.”Idam Home Care Services, 1607 South Olden Avenue,Hamilton 08610. Ian Griffiths, manager. 609-888-4844; fax,609-888-3443.Top Of PageNational RowingBeginning next year the U.S. Rowing Association willbe able to use Mercer Lake and a new boathouse as a national trainingcenter, and recreational rowers will also be able to use the improvedfacilities there.Improvements had been made to the lake, part of the Mercer CountyPark system, for the 2001 Zurich Rowing Cup that was hosted by thePrinceton International Regatta Association. Now the regattaassociationis renovating and expanding the boathouse to provide a fullyfunctionalnational and Olympic facility. The coaches’ office for the nationaland Olympic rowing team is on Emmons Drive, but the team isheadquarteredin Indianapolis (317-237-5656)The expanded boathouse will be used by teams from the Hun School,Lawrenceville School, Peddie School and students from public schoolsin Mercer County and also by PIRA sponsored rowing camps, clinicsand lessons.The $1.5 million expansion includes three additional boat bays(allowingspace for scholastic and recreational rowers in the county) and 2,000square feet of office space. When completed, the boathouse will havesix boat bays, office space, training rooms and shower facilities,says Finn M. W. Caspersen, former CEO of Beneficial, who chairs theassociation. Construction is expected to be completed by summer, 2002.Princeton International Regatta Association, Box880, Princeton Junction 08550-9998. 609-915-1107. Home page:regatta@princetonregatta.orgU.S. Rowing Association, 29 Emmons Drive, SuiteF-40, Princeton 08540. Mike Teti, head coach. 609-419-1936; fax,609-419-1951.Top Of PageManagement MovesNew Jersey Community Loan Fund, 16-18 WestLafayetteStreet, Trenton 08608-2088. David M. Scheck, executive director.609-989-7766;fax, 609-393-9401. Home page: njclf.comDavid M. Scheck succeeds Anne Li as executive director of New Jersey’sonly private, statewide community development loan fund.Scheck went to the University of Delaware and has an MBA from Fordham.He has been a VISTA volunteer, helping affordable housing developersand community development corporations in North Carolina. He alsoworked at PNC Bank in an entrepreneurial unit focused on communityeconomic development, and as research analyst for a Wall Streetinvestmentbank. He came to NJCLF from the NJ Redevelopment Authority, wherehe was in charge of loan pools for community development projects.Opera Festival of New Jersey, 29 Emmons Drive,Suite G-50, Princeton 08540. Douglas Rubin, executive director.609-919-1003;fax, 609-919-1008. Home page: www.operafest.orgDouglas Rubin and David Agler have replaced Karen Tiller at the helmof the Opera Festival. Tiller was general director; Rubin is the newexecutive director and Agler serves as artistic director.Rubin has an engineering degree from Princeton and a Wharton MBA andmost recently worked at ALK Associates Inc. on Herrontown Road. Aglerhad been resident conductor of San Francisco Opera and music directorof Vancouver Opera.Top Of PageDeathsBernard Miller, 74, on November 16. Until 1996 he wasvice president of research at the Textile Institute in Princeton.A memorial service for Janice B. Stonaker, will beSaturday,December 1, at 3 p.m. at Montgomery Cultural Center’s 1860 House,124 Montgomery Road, Skillman. A municipal and land use law attorney,she died on November 19.Jacob Landau, 83, on November 24. He was aninternationallyknown illustrator, printmaker, and painter whose work is currentlyon view at the Princeton Theological Seminary’s Erdman Hall Gallery.(U.S. 1, November 14).Next StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
