Case Study #4: The Enlightened M.B.A.

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The Start-up: GreenPrint

The Founder: Hayden Hamilton

Portland, Oregon

The business proposition: Software that reduces printer waste by eliminating pages in a printer queue that have only a footnote or a banner ad on them and can strip out all images from a print job. The corporate product costs $70 per user; a stripped-down consumer version retails for $35. Besides good environmental stewardship, the company promises users that GreenPrint will pay for itself in eight months through lower paper and ink spending--at a time when ink can cost as much per ounce as a 1988 Chateau Lafite-Rothschild.

The founder: Hayden Hamilton loves the outdoors. He spent his first year out of college trekking around Nepal. After graduating from Oxford's Saïd Business School, he worked at Ford (NYSE:F), where he saw just how much paper a big corporation uses. That gave him the idea for GreenPrint. Though he is 30, this is his fourth start-up. His most recent company, which imports pharmaceuticals from the Far East, grosses $700,000 a year, but Hamilton has given up day-to-day management.

No. of full-time employees: 4

Capital raised to date: $200,000 from savings and from friends and family. GreenPrint is now trying to raise $250,000 to $500,000.

Market potential: Depends on whether you think of GreenPrint as software or a green product or both. According to the research firm IDC, worldwide software spending will reach $327 billion by 2010, increasing at a compound annual rate of 7.5 percent over five years. In terms of green products, consumers spend $157 billion a year on sustainable and ecological products, according to Lifestyles of Health and Sustainability, an advocacy group.

Revenue projections:
2006: $47,000 (actual)
2007: $10 million
2008: $30 million

Cash-flow picture: GreenPrint's ability to break even on a cash-flow basis hinges on landing two corporate sales, which could bring in close to $5 million each, Hamilton says. Currently, the company is conducting free trials at 22 corporations. Hamilton says a small deal with a major financial institution is as good as done, but he isn't ready to announce it yet.

Competition: A San Francisco company called FinePrint sells a similar application starting at $50 per user. When asked by a reader to compare the two programs in The Wall Street Journal, tech columnist Walter S. Mossberg called FinePrint "a niche product for a class of user willing to invest time and effort" while "GreenPrint is for mainstream users who want to save both paper and time."

Growth strategy: Partnerships could provide the breakthrough for which Hamilton is looking. Three printer manufacturers are testing programs in which they bundle GreenPrint with their products. Hamilton is also talking with two office supply stores about handing out trial CDs. In the meantime, consumer sales are providing a stream of much-needed revenue. A version of the product that can be downloaded online has sold about 2,000 copies at $35, for $70,000 in revenue.

Challenges: As with any company that is trying to create a whole new category, GreenPrint has to convince buyers that they need a product they've never heard of. Without heavy marketing, "I don't see the home-user market exploding," Hamilton says. "People don't go into Office Depot looking for software that will save you toner and ink and paper." Plus, Hamilton is eschewing an on-the-shelf offering for now: Packaging a paper-saving product in a disposable cardboard box seems hypocritical.

On the corporate side, once one large company signs with GreenPrint, Hamilton thinks his sales cycle will improve dramatically. "We've got, now, about 1.5 million potential license sales," he says. "It's just a matter of closing those deals."

Opportunities: The interest in ecofriendly products is, if anything, stronger overseas. Hamilton is pursuing deals with software makers in Asia and Europe. They would create and support local language editions of GreenPrint and would pay GreenPrint a percentage of sales.

What You Can Learn From GreenPrint

1. If you're going after corporate business, be prepared to endure a long sales cycle.
   
   
2. Packaging green products poses a creative challenge.
   
   
3. Work with partners to enter overseas markets.

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