A Start-up Plans to Make Mines Safer
Can this workplace-safety company raise $1 million in seed capital?
Greg Ruffing
Elevator Pitch
The Pitch: "The 12 miners killed in the January 2006 mine explosion in West Virginia weren't found in time partly because no one knew where they were. Our wireless radio network can pinpoint a miner within a 10-foot radius. Most mines, if they have a tracking system, use radio-frequency identification. But the RFID readers are often placed hundreds of feet apart and can tell you only that someone has passed by. A federal law requires all underground coal mines to have wireless tracking systems by June 2009, but many mines still don't have them. We plan to install a beta system this year and hope to get regulatory approval by May."
Company: InSeT Systems
Owners: Jay Breeding, Russell Breeding, and Mike Millam
Location: Akron
Employees: The co-founders
Founded: April 2006
2007 Revenue: None
2008 Projected Revenue: $350,000
Raised So Far: $400,000 from business incubator JumpStart
Needed: $750,000 to $1 million
Clients: Mining companies
Recent Buzz: Its product is one of Popular Science's top inventions of the year.
The Experts Weigh In
Explore other uses
InSeT will be able to enter the market rapidly because of the new law. But the technology isn't making a direct contribution to revenue; it's fulfilling a regulation, so the price will probably be driven downward, especially with other competitors in the market. Also, after all the systems are installed, InSeT's revenue will fall off a cliff unless it comes up with a recurring revenue stream, like an annual fee for maintenance. InSeT should explore other applications of the system: It could be used to track items within a warehouse, for instance.
John Kim
Managing director
H.I.G. Ventures
Miami
Start small
This company is addressing a real need in the market. The regulatory drivers support its value proposition, and it has initial traction with customers through the tests it has conducted. One thing: Mine operators may not have the infrastructure to support the system themselves. It would be interesting if this were offered on a managed service model, with the whole system being supported centrally at a location off-site. InSeT should start by marketing to a few small mining operations and then, once the kinks are out, sell to larger companies.
Tom Hawkins
Director
Arcapita Ventures
Atlanta
Sounds promising
InSeT's product promises to be a cut above what is currently on the market. As head of technology at a company that owns three coal mines, I think that having a more precise view of employees' locations in an underground mine is enough to make the product interesting. Once InSeT has approval, mines could conceivably start testing the system immediately. InSeT's main hurdle is gaining commercial approval from the Mine Safety and Health Administration. That's the advantage competing technology has: It's proven.
Bill Brake
Executive vice president and chief technical officer
Cleveland-Cliffs
Cleveland
