Looking to spur entrepreneurship and encourage student and faculty enterprise that could boost the regional economy, Binghamton University’s School of Management last week played host to an event that seemed guaranteed to do both.
Three undergraduate teams competed for $2,500 in start-up funding for their proposed businesses, while a fourth team of graduate students detailed the feasibility of commercializing the research of faculty member Ronald Miles-technology they said has multi-million-dollar potential in a number of arenas.
Miles’ work with digital directional microphones has attracted significant attention from civilian and defense agencies because it significantly improves on current microphone technologies. Digital and directional microphones are employed in everything from hearing aids and cell phones to military surveillance equipment. Miles has developed a prototype device based on the ears of a small parasitoid fly. His digital, differential microphone diaphragm creates significantly less self-noise and responds very well to a significantly broader frequency spectrum than any current technology.
SOM Dean Upinder Dhillon said the event was designed to capitalize on the technologies and expertise available on campus by pairing those resources with energetic students who embody the entrepreneurial spirit.
The undergraduate competition saw three competing teams presenting business plans before a panel of off-campus judges, including a venture capitalist, a private investor, and a regional business leader. The plans included:
- a proposed debit-card service that would make it easier for parents to monitor student food spending and would encourage students to eat at off-campus restaurants participating in the MealCash plan
- a custom-designed Indian furniture import business that would allow online selection of woods and carving styles as well as providing a centralized showroom somewhere in Westchester County
- a residential cleaning service that would hire BU students, giving them access to relatively high-paying, part-time jobs, while providing Southern Tier residents with access to more affordable housecleaning services.
Winners of the competition were the Co-Ed Cleaners team comprising Kristen McTiernan, Linda Ni, Joy Westby, and Julie Nuba. Team members said they are trying to secure the number 1-800-LUV-DIRT for their business and hope to actually open their doors in the fall.
The Co-Ed Cleaners will receive $2,500 to be used for their start-up and will receive another $2,500 if they survive for one year. If they remain viable at the end of their second year as a local business they will receive an additional $5,000 for a possible total award of $10,000. All the prize money must be invested in the business and cannot be used for salaries.
The entrepreneurship program, which is the culmination of a venture course taught at BU by Angelo Mastroangelo, former owner of Adirondack Beverage Corp., was established through a six-figure gift from Barry Goodman, Dhillon said. Goodman is a principal and executive vice president of Milburn Ridgefield Corp., an alternative investment management firm with assets of $800 million. He graduated magna cum laude with a bachelor’s in economics from Harpur College in 1979. In addition to chairing the entrepreneurship program’s Board of Advisors, Goodman plays an active role in alumni outreach and fundraising for the School of Management. The Botnick Foundation also committed a six-figure donation for prize money, Dhillon said.
The MBA team presenting on Miles’ research is part of BU’s Advanced E-Team Pilot Program initiative. That program has already committed to similar feasibility studies on the commercialization of non-invasive pathogen detection technologies developed by BU faculty member Omowunmi Sadik and of nanotechnology and electronics packaging technologies developed by faculty members Bahgat Sammakia and Wayne Jones.
According to the feasibility study on Miles’ research, his differential microphone should command a price premium in the sizable hearing-aid market. Also, because many people who could use them don’t buy hearing aids because they expect to be disappointed in them, the team said the “significant improvement to hearing devices that Dr. Miles’ technology represents should encourage entry in the market by previously reluctant consumers.”
Projecting a conservative 10 percent initial market share, the team projected sales revenue of $7.2 million annually, even without the probable $500 per unit price premium the technology could be expected to command over competing technologies. Again assuming a 10 percent market share of current sales levels and presuming the manufacturer would command 20 percent of the total price premium, could be expected to result in an additional $60 million in revenue to the manufacturer, the team reported.
Annual revenues for the technology in the cell phone arena were projected at $15 million based on a 10 percent market share of the 100 million cell phones expected to be sold during 2003. Cell phone market sales are expected to be twice that in 2004 and to continue to increase exponentially since global market penetration is currently only 18 percent, the team said.
Bottom-line recommendations for Miles were to pursue a license agreement, probably to industry specific companies, hearing aids, cellular phones and defense industries among them, and to trademark his microphone to distinguish his technology “through the use of words, logos or even sounds.”
The team also suggested Miles consider corporate partnerships with a Southern Tier company capable of helping to bring the technology to market on a mass production scale and that he continue to pursue patent and business strategies with BU’s Office of Technology Transfer and Economic Development, headed up by Donald Colbert.
Members of the MBA Advanced E-Team reporting on Miles’ work included: Erin Yetsko, Kindra Oddy, Amy MacDonald and Cynthia Gordineer.
Miles said he was impressed by the thoroughness of the team’s study. He said he will seriously consider the recommendations, which are extremely timely in the development of his technologies.