How a young entrepreneur is turning wasted energy into profit.

Simple Sum

Quick math test. If an average passenger car gets 22.5 miles per gallon, but only uses about 15% of the energy from fuel to move the vehicle, its passengers and power its accessories, how far could a perfectly efficient passenger car travel on a gallon of fuel? In case you don’t happen to have a calculator handy, the answer is an even 150 miles to the gallon. Sounds pretty good. But what happens to the other 85% of the energy? Some is lost to heat. Some is lost to aerodynamic drag. And some forms the basis of entrepreneurial opportunity.

Impactful Idea

As a student at MIT in Cambridge, MA., Shakeel Avadhany had plenty of chance to consider these facts while idling in Boston area traffic. But it was the infamous Boston potholes that launched his current venture, Levant Power. Bouncing down the street, Avadhany realized that these bumps not only cause headaches, they also cost fuel efficiency. The shock absorbers in his car were turning vibration into lost heat. His solution? Capture the energy. Build a shock absorber that cycles hydraulic fluid to generate electricity for the battery or the accessories.

Harnessing Harvest

If Avadhany can achieve the midrange of the 1-6% efficiency he hopes, his idea could cut fuel use by more than 250,000 barrels in the US alone. Every day. More math says that if every automobile in the world were equipped with Levant GenShocks, it would save drivers US$28 billion per year (oil cost of US$75/bbl). Small solutions to big problems can generate enormous opportunities. And though Levant is still tiny, early results are positive. The firm has already received two rounds of investments during challenging economic times, is working on a contract with the US military to supply its GenShock to military vehicles, and received an Innovation of the Year award (2009) from Popular Science.

Harvest or Conserve?

In addition to potentially smoothing our ride and soothing our wallets, Avadhany introduces us to a larger debate about how to deal with growing energy consumption demands. One alternative is simply for people to do less. Conservation has long been advocated, and in some areas mandated. A driver forced to cut her activity in half by definition also cuts her consumption in half. But the same driver, harvesting twice the output from the same amount of fuel also consumes half, and still enjoys her current activity level. The difference? Conservation is a regulatory tool of government or activist groups. Harvest is the result of successful entrepreneurial activity. And looking historically at examples from paper recycling (see “A Profit From Waste, June 2010) to hybrid vehicles, entrepreneurial harvest has achieved both broader adoption and better efficiency results than conservation.

Open Road

Should entrepreneurial ideas at the intersection of energy and automobiles intrigue you, it might be interesting to know where the remaining opportunities lie. According to the California Energy Commission, if you allocate 100% of fuel energy into where it is consumed in the average automobile, it looks like this:

Operating a Combustion Engine System
62.4% Engine Loss
17.2% Standby and Idle
5.6% Driveline and Transmission

Propelling the Vehicle and Powering Accessories
2.6% Areodynamic Drag
4.2% Rolling Resistance
5.8% Braking
2.2% Accessories

If universally adopted, Avadhany’s Genshock could take Œ_ of one percent out of the “Rolling Resistance”ù figures. Leaving 99.5% of the harvest open to other entrepreneurs with clever solutions. Certainly there will be bumps, but it is the job of the entrepreneur to turn those into opportunity.

Written by Stuart Read, professor of marketing at IMD and Nick Dew, associate professor at the Naval Postgraduate School and also available at Business Life.

British Airways Business Life
Stuart Read
Nick Dew
Relevant Principles:
Bird-in-Hand (Means)
Pilot-in-the-Plane (Control vs. Predict)

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