Executive vice-president Mary Burnett, a former executive-search consultant, runs the marketing side. Already she is contemplating private-label Goldfires, to be distributed through companies like Deere & Co., for the agricultural market. She's written a job description for a national account manager, someone who "could walk into corporate McDonald's, corporate Sears, and corporate WalMart" for mass orders. Product ads in such trade publications as Environment Today and The National Oil and Lube News should produce some leads.
But the backbone of the marketing effort, as she plans it, will consist of a nationwide direct-sales force of 600, working strictly on commission. Sunny Decker, now the Southeast regional sales manager, predicts he'll have no trouble attracting quality people -- his classified ad for sales reps in an Atlanta paper netted 87 inquiries.
Paul Lathrop, the sales manager for Florida, had previously sold automotive-service equipment. He joined Waste Energy because he sees such tremendous potential for Goldfire. "I know the problems car dealers have with waste oil, because I've sold them equipment to handle it," he says. "Everybody who generates waste oil knows the situation is going to get worse before it gets better. Right now they give the oil away, at best. When I say I can make a gallon of that oil worth $1.35 in electrical savings, I get serious interest."
In fact, once Lathrop explains the machine's benefits, most prospects say they could hardly afford not to have it. "They don't want to be hassled with getting permits or with the installation," he says. "So I tell them we are going to do this turnkey for them, and that's what they want to hear."
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The issue of getting permits, however, may not be so cavalierly solved. Woody Mason, a jack-of-all-trades at Waste Energy, spends several days a week trying to decipher a bewildering morass of state environmental codes. His biggest problem is that the Goldfire falls into a gray area of technology.
"Not many people know how to classify this machine," he says. "It's not a burner or an incinerator or a boiler, so it doesn't fit into the normal categories. What we really have is a mini oil refinery. It filters and refines the oil to remove contaminants -- the emissions are probably no worse than what comes out of a car. And the natural gas from the solid waste is as clean a fuel as you can get."
All that will have to be demonstrated, and in the meantime just figuring out who needs what proof is a vexing challenge for Mason. Some states, he explains, grant exemption from air-quality regulations to any machine that produces less than 1 million Btus per hour -- that would exempt even the largest Goldfires. Other states want a permit for everything in sight.
"In California," he says, "you've got a real can of worms, because there are 33 separate air-quality-management districts, each with the authority to implement emissions standards stricter than the minimum required by the state. In Texas air-quality standards are first handled by the water bureau, and it passes its decision on to the air people. If water quality finds a unit exempt, then air quality has to pass judgment on it."
Dealing with the public utilities, another of Mason's roles, is no piece of cake, either. There are some 7,200 power companies in the country. Despite the federal law requiring them to purchase cogenerated power, they are hardly champing at the bit to get it. They regard systems like Goldfire as a threat to the well-ordered status quo, Mason says. Their electrical engineers are used to dealing with megawatts and gigawatts of power from huge cogenerators. "We're just a pain for them to fool with. We're like a gnat -- swat, and we'll go away."
"Most utilities are playing it straight with us, but others have a knee-jerk reaction that they need to protect their revenue base," says Burnett. "So they do whatever they can to slow us down. We had one utility tell us that it would need a design review before approving an interconnect. They said it would cost $25,000 and would take two years."
But Burnett seems largely unfazed by such obstacles. Eighty percent of Goldfire users won't generate more power than they themselves can consume, anyway. And Burnett knew all along that a company like his would need a strong customer service department to handle bureaucratic resistance. There are no problems, he says, that can't be solved.
Such are the pangs of launching a new industry. "I knew we'd run into some real hard walls, and we have," says Mary Burnett. "We're just going to have to break them down or crawl over them. But it's hard. I'd rather have another baby than go through this again."
EXECUTIVE SUMMARY
THE COMPANY
Waste Energy Inc., Bradenton, Fla.
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Concept: Manufacture and sell small machines enabling companies to convert their trash and waste oil to electricity to run their businesses. Excess electrical capacity could be sold back to local power companies. Eventual expansion into residential market
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Projections: Sales of $46 million in the first year, $161 million in the second, and $394 million in the third. Total U.S. commercial market seen to be $22 billion. Aiming for pretax operating profit of 25%
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Hurdles: Obtaining U.S. and foreign patent rights; controlling materials costs as production gets under way; winning permits, where required, from state environmental regulators; maneuvering through bureaucratic intricacies of the country's 7,200 public utilities
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THE FOUNDER
Keith G. Burnett
Age: 40
Family: Divorced; remarried; three children by first wife
Personal funds invested: $40,000
Equity held: 72.5%, together with spouse, Mary Burnett
