Entrepreneurship team wins top U.S. Department of Energy Award
A team from the Wolff Center for Entrepreneurship won the 2014 National Clean Energy Business Plan Competition hosted by the U.S. Department of Energy.
From a variety of UH-developed patents, the four-person team from the Bauer College of Business selected rare earth element reclamation technology to kick off a start-up company named REEcycle. UH researcher and UH’s Texas Center for Superconductivity Director Allan J. Jacobson developed the technology REEcycle will utilize to gather their product: recycled rare earth elements (REEs).
“My teammates are from the Wolff Center for Entrepreneurship and the program last year started collaborating with the Office of Intellectual Property,” said REEcycle member and Bauer senior Susan Tran. “The collaboration calls for Wolff students to take technology patented by the University and to try to make a business out of it.”
Jacobson, who is also the co-patent holder of the REE technology, has directly collaborated with REEcycle alongside some Ph.D. candidates.
“One Ph.D. candidate we’re working with, for example, has helped us quite a bit understanding the science behind (REE reclamation),” said REEcycle member and Bauer alum Casey McNeil. “None of us have a science background, or any background in chemistry for that matter. Having a good understanding of the science allows us to explain it to other people, getting them to understand and accept the technology.”
Two REEs that REEcycle intends to salvage and sell are neodymium and dysprosium, as explained in a statement by REEcycle. These elements form neo-magnets, which are an integral part of products like hard drives, cell phones and fluorescent light bulbs. Other applications of REEs frequently deal with clean energy, such as wind turbines and thin-film solar cells.
“We know that there’s a need — a huge need (for rare earth elements),” Tran said. “Once we’ve reclaimed the rare elements they can be sold in a ready market. Imagine gold, for instance — you can recycle gold from a motherboard in a computer. It doesn’t matter where it came from, it has value.”
Behind utilizing modern technology is a simple business concept: supply and demand.
“I remember learning about (supply) in my business class,” Tran said. “The professor was talking about how to control the supply. I remembered that when we were choosing the technology. China is controlling the supply for REEs, because it’s so hard to find them outside of China.
REEcycle is not only a team effort on the part of the four members themselves, but of UH as well. According to McNeil, balancing out supply and profit proved a central obstacle.
“We really have put in a tremendous amount of work into combining all the different aspects it takes to compete at this level,” McNeil said. “But, with that being said, a large portion of the knowledge we’ve gained to reach the point we’ve reached is because of the mentors that we have. We have a tremendous board of advisors that are all brought from companies like Siemens and Shell, and many different recycling companies are from the Houston and Texas area. Using their knowledge really brought us to the next level.”
Before hitting the national level of competition, REEcycle netted $100,000 from the National Clean Energy Business Plan Competition’s regional competition. Finances aren’t the only prize REEcycle earned in competition.
“A law firm named Mintz Levin, which specializes in energy, will be helping us form contracts, for example,” McNeil said. “What was crucial about being at the competition was forming connections. Meeting different people from the Department of Energy and the Department of Defense really helped us.”
REEcycle still remains a startup, however. Through their success, they still are on their way to forming a whole company.
“It’s extremely rare to see start-ups succeed in any way, especially the kind of start-up that we’re after,” McNeil said. “It’s easy to see what we’ve done so far and take it as success, but in reality there are still a lot of problems that we have to overcome before we can consider it a true success.”
McNeil isn’t disillusioned by the challenges that lie ahead. As a startup, REEcycle still faces many bumps along the road to sustainability.
“Any of the companies that we’ve worked on, especially REEcycle, could literally collapse at any point and time,” said McNeil. “I would say, if you base it statistically, probably one percent of all start-ups succeed.”