FloDesign Has Innovation Down to a Science

By GEORGE O'BRIEN

04/29/2008- Business West

"There's change in the wind." That's one of the marketing taglines currently attached to FloDesign Wind Turbine Corp., a Wilbraham-based venture currently advancing a development that could dramatically alter what is perhaps the largest and most promising segment of the sustainable-energy market. The concept is the latest innovation from a team of entrepreneurial inventors, and it is has succeeded in capturing attention (and venture capital) from Al Gore.

Stanley Kowalski III says his father always promoted a strong sense of curiosity among his children, and found some intriguing ways to fuel it - literally.

For example, the elder Kowalski, long-time Business School dean at Western New England College, let his son have a car at the age of 12. It was an old VW Beetle essentially donated by a professor at the school. Stanley was permitted to operate it in the backyard and on a trail in the woods behind the house.

"I would drive it around, and it would inevitably break down," he said. "And it would be up to me to fix it; if I didn't, it would just sit out in the woods. This instilled a natural curiosity for all things mechanical - I remember cutting the roof off that car and making it into a convertible. It was the ugliest one you ever saw, but I had my own convertible."

Today, Kowalski, coincidentally one of this year's Forty Under 40 (see his profile, page A19) remains fascinated by the mechanical. He's blended it with a strong business sense, also instilled by his father, in an intriguing venture that focuses on what is known as disruptive technology, or innovations that dramatically alter the course of events - and market share - in a given industry.

Wilbraham-based FloDesign, a company he acquired from founder and former WNEC Engineering professor Walter Perez two years ago, is working on a number of projects - all in the 'disruptive' category, to one degree or another - with products ranging from silicone breast implants to jet-engine suppressors to so-called non-lethal weapons for police departments and the military. (The prototype Kowalski showed BusinessWest, designed for the U.S. Marines, shoots bursts of air at people, not bullets.)

And while work will proceed on these initiatives, the time and attention of Kowalski, Perez (he remains with the company as chief technology officer), and others will be focused primarily on a different product, a wind-power turbine, and a recently launched company to bring it to the marketplace - FloDesign Wind Turbine Corp.

That venture has procured a $500,000 loan from the Mass. Technology Collaborative to develop a prototype of the turbine, which features aerospace technology designed to generate more electricity at a lower cost than conventional turbines. But the bigger news came just a few weeks ago, when the company secured several million dollars in first-stage financing from Kleiner Perkins Caufield and Byers. That's the massive U.S. private equity firm that Al Gore joined as a partner late last year with the goal of finding, funding, and accelerating 'green' business.

Kowalski said there is a champagne toast scheduled for May 12 in New York, with Gore and other KPCB executives in attendance, and then it's back to work on the new wind turbine, which he believes could be ready for the marketplace as early as 2010. Doing some quick math, he projects that FloDesign Corp. could take 10% to 15% of a projected $23 billion wind-turbine market, or perhaps $3 billion in sales.

"This is a hot market to be getting into," he said with a dose of understatement as he talked about the sustainable-energy market and, specifically, wind power. "There are enormous growth opportunities."

In this issue, BusinessWest looks at one of the more intriguing business stories taking shape in the Pioneer Valley, one that blends entrepreneurship, innovation, 'green' thinking, and some potentially big numbers in terms of sales and profits.

Powerful Arguments

Kowalski said that, before signing on the dotted line with KPCB, FloDesign Wind Turbine Corp. heard from a number of other venture-capital firms - some of them many times - that wanted a piece of the action and the company.

"We had opportunities with some huge VCs ... some of the biggest companies in the country were vying to give us money," he said. "One of our secretaries was getting badgered by a billionaire; he wouldn't stop calling."

Such was - and is - the interest in what is called a "mixer/ejector wind turbine," or, as those at FloDesign call it, an MEWT. It takes mixer/ejector technology previously designed by FloDesign to more-effectively convert wind energy into usable power than traditional wind turbines.

The MEWT looks a jet engine on a pole, and represents a radical improvement over the horizontal axis wind turbine, or HAWT, according to a brief synopsis on the FloDesign Web site.

"For a given wind velocity, a MEWT having a maximum diameter 50% smaller than an existing three-bladed HAWT can potentially generate more than 50% more power, and can potentially cost 25% to 35% less than the same HAWT," it reads. "The MEWT uses cambered ringed airfoils (shrouds) and an efficient mixer/ejector pump to draw in more wind flow through the machine. A stator-rotor turbine cascade design is used to more effectively extract energy from the flow. This new concept allows small, more-durable rotor blades that can withstand high wind gusts and turbulence."

This is more information than most people need or can understand, but slicing through it all, the MEWT hits at the essence of what Kowalski and Perez call aerospace technology and what Harvard business professor and author Clayton Christensen termed "disruptive technology" or "disruptive innovation" - concepts that disrupt, or overturn, the status quo in a given market (more on both those concepts later).

And the new wind turbine epitomizes the kind of innovation Perez wanted to stimulate when he created FloDesign in 1990 as a contract-engineering firm that would utilize the talents of WNEC engineering students to handle projects for clients such as Hamilton Standard, Pratt & Whitney, and Sikorsky Aircraft. Over the years, Perez, students, and scientists hired mostly on a contract basis have engaged in problem-solving endeavors that have yielded new products and improvements to old ones in the aerospace field and, more recently, many others.

The walls in Perez's office are covered with plaques, each one commemorating a patent he has earned involving everything from noise-suppression equipment for jets to ejectors and mixers used in aerospace and other sectors.

Among the students who helped amass this track record for innovation was Kowalski, who worked for Perez while earning his Engineering degree at WNEC in the early '90s. His award-winning senior project involved work for Sikorsky, specifically development of a suppressor system that lowered the heat signature of attack helicopters, making them less susceptible to heat-seeking missiles.

"That was an incredible project to work on," he recalled. "We had generals walking around the lab looking on as we worked; it was a great experience."

And it was work that would eventually help Kowalski blend his passion and talent for both science and free enterprise that he started honing before he started driving that old Volkswagen.

"When I was young, if I wanted something like a new bike, my father would tell me to go out and earn the money for it," he explained, adding that he did as he was told, through a number of entrepreneurial ventures such as mowing lawns and delivering newspapers.

With the latter, however, he got creative - he hired another kid to deliver the papers for him, giving him a percentage of the take. He would collect the money, thus getting all the tips, and used the time he would have spent tossing papers onto porches for other profitable endeavors.

Developing Interest

After graduating from WNEC, Kowalski eventually took a job with a Palmer-based photo-finishing lab called Source Two, where he created and led an engineering department that helped develop new products for the industry.

It was while at Source Two that Kowalski got an up-close-and-personal look at just what disruptive technology is and how it can change an industry. He was an eyewitness to the emergence of digital film technology - he first saw it a trade show and immediately declared it unimpressive and impractical - and how it essentially put Source Two out of business in 2006.

"I got out just in time," he said of that company and the financial collapse it suffered. "Other people were not as lucky."

The self-described inventor/entrepreneur then began looking for companies to buy, and eventually knocked on Perez's door. "Some of the prices on the companies I looked at were just out of sight," he explained. "I eventually approached Dr. Perez, we talked, then we negotiated, and we worked it all out."

With Kowalski at the helm, FloDesign has gone from a small consulting firm to a million-dollar corporation that is working to develop disruptive technology in several fields, including aerospace, defense, biomedical, and sustainable energy. A quick tour of the lab area provided a good sampling of the work the company is doing.

First, Kowalski stopped at a picture of the V-22 Osprey, the controversial tilt-rotor, multi-mission aircraft being developed for the U.S. Marine Corps. FloDesign has been contracted to reduce its heat signature, or the hot gases it emits that can ignite ground cover. Next, he went to the prototype of a non-lethal weapon being developed by FN HERSTAL, one of the world's largest manufacturers of small arms for defense and law enforcement, for the Marines. This product, for which FloDesign is working to reduce the acoustical signature, is an air cannon that essentially shoots bursts of air at a target, thus disabling it without killing it.

"This is a device that you can tune, which is really the Holy Grail of weaponry," he explained, noting that users can adjust it to alter its impact on the target. "It's like a phaser in Star Trek that you can set on 'stun' rather than 'kill.'

From there, he stopped at a silicone breast implant being developed by the biomedical firm Mentor Corp., one of the leading manufacturers of the product. Flo-Design was contracted to develop technology that will make the implants easier to manipulate.

These and other projects in the pipeline will eventually be turned over to others at FloDesign, said Kowalski, as attention is focused on the wind turbine and its vast potential to disrupt that market.

The Tide is Turning

Perez calls it "moon power."

That's not a formal name - although he's thinking about it, and also about copyright options - but something he's attached to what he believes will be the next wave, literally, in sustainable energy: harnessing the tides through underwater turbines.

"That's what coming next, and we want to be at the forefront of it," he said, providing a good example of how those at FloDesign keep one eye on the present and the other on the future. "Look at the Hudson River and its tidal basins ... there are enormous amounts of energy out there that are not being tapped."

While looking ahead to the vast potential of tidal power, Perez, Kowalski, and third partner/chief scientist Michael Werle are clearly focused on FloDesign Wind Turbine Corp. and the course that this venture will take over the next few years.

With the first-stage financing from Kleiner Perkins Caufield and Byers (the partners didn't divulge the specific amount or the percentage of the company they relinquished in exchange for the venture capital), the company will move ahead aggressively with prototype development, said Perez.

This is a process that will take 18 months, he continued, and the company will undertake the assignment in the same manner that it has previous and current work - meaning in a style that approaches (sort of) that of a virtual company Perez said he worked for in California.

"This outfit was the epitome of lean and mean," he recalled. "It had no real staff or offices, no overhead ... when they had a project, they brought in the best talent money could buy and just got the job done.

"I became enamored with that company," he continued. "That's the way things should be done in this business, and how we try to do them here."

Elaborating, he and Kowalski said FloDesign, when given a project by a public or private entity, will hire the best engineering specialists available (some of them making $750 or more per hour for their knowledge and talent) and, in all other ways, keep overhead as low as possible. The FloDesign headquarters building is a good example. It is non-descript, functional, and modest.

To bring the MEWT to the marketplace, FloDesign Wind Turbine Corp. will need a much larger facility, Kowalski explained, adding that there will be a comprehensive search for appropriate space, with the hope that it will be found within the 413 area code. "We really want to stay in this market - that's our primary objective," he said. "But we have to do what is practical for us and makes sense."

Meanwhile, the partners continue to assemble the team that will bring the turbine to fruition. Hiring will come in stages, said Kowalski, with perhaps 15 to start, and more added as the project advances.

Team members will be employing what those at FloDesign call 'aerospace technologies,' in the MEWT project. This is not a technical term, per se, but rather a phrase used to describe the focus of development in that realm, meaning work that will improve performance while reducing cost.

The MEWT can do both, said Kowalski, adding that the technology has the vast potential to bring wind power to areas where it is currently impractical - meaning regions where there is too little wind or, in other cases, too much.

"We're going to bring wind turbines into the jet age," said Perez.

Keeping Current

Today, Kowolski has a real convertible - a few of them, in fact. He has a collection of cars that speaks to his passion for the mechanical, as well as his strong business sense - most have turned out to be good to great investments.

His everyday car is an old Longmeadow police cruiser that he bought at auction. It will do 130 mph, although he doesn't approach that, and when he parks it near the street it will inevitably slow down the traffic. "It works every time," he laughed.

The cruiser is just another example of how Kowalski's goal is to be, well, disruptive. He's succeeding with traffic on Main Street in Wilbraham, and also in business, where the MEWT holds enormous potential to turn that market inside-out.

As the marketing line says, there's change in the wind.

George O'Brien can be reached at obrien@businesswest.com