Entrepreneur of the Year 2009: Kevin Surace of Serious Materials
The founder of Serious Materials wants to save the world and make a billion dollars. And he just might pull it off.
Courtesy company
EXECUTING THE PLAN Kevin Surace schools Vice President Joe Biden on the finer points of eco-friendly products at the former Republic Windows plant.
Justin Stephens
GREEN MACHINE Serious Materials's factory (that's Surace with a handful of slurry) generates just 3 percent of the emissions of most drywall plants.
The Secret Service wasn't thrilled about a last-minute addition to the group sharing the stage with the Vice President. But Kevin Surace was insistent. Upon arriving at his company's Chicago factory on that warm, wet morning in April, Surace had glanced through the speaker lineup and noticed a gaping hole. Where was a union member? How could the resurrection of a union shop be celebrated without an actual worker?
A few minutes later, the motorcade rumbled up a ramp and into a cordoned-off, sharpshooter-patrolled section of the cavernous plant. As Joe Biden toured a production line, earnestly absorbing the esoterica of superinsulating windows, Surace corralled one of the Vice President's aides. The aide was doubtful. Everyone onstage needed clearance, and it was late in the game to perform a background check. Surace didn't care. "It's the right thing to do," he told the aide. "I want it to happen."
Shortly thereafter, Armando Robles, a maintenance worker and president of Local 1110 of the United Electrical, Radio, and Machine Workers of America, joined Surace, Biden, U.S. Senators Dick Durbin and Roland Burris, Chicago Mayor Richard Daley, and plant supervisor Frank Edwards onstage. Speaking before a bank of news cameras and an audience of about 100, Robles related the saga of Republic Windows and Doors, whose rescue they were marking. In December 2008, the company abruptly shut down, cutting workers adrift with just three days' warning and no severance. Furious, employees engaged in a riveting, six-day sit-in that drew national media attention. When it was over (the workers won severance and vacation pay but still lost their jobs), the cameras drifted away, leaving the plant for dead.
That's when Surace, founder and CEO of Serious Materials, which makes carbon-frugal construction products, swooped in. A white knight as well as a green one, Surace bought Republic's crippled assets out of bankruptcy and pledged to restore the factory and eventually rehire all the workers at their old pay levels.
When Robles finished, Biden took the podium. He praised Serious Materials for making "the most energy-efficient windows in the world." Then he turned to Surace, thanking him for "your faith in the people here at this factory, your faith in the country, your willingness to invest here in America." Surace stood silently with his hands clasped before him, taking it all in.
For most CEOs, such a high-profile backslap would be the unquestioned highlight of any year. For Surace, Biden's visit was certainly a highlight. But there were so many other peaks to choose from.
The Biden event occurred just six weeks after Surace basked in comparable accolades from Pennsylvania Governor Edward Rendell during a March ribbon cutting at another Serious Materials factory, this one in the steel graveyard of Vandergrift, Pennsylvania. In Vandergrift, the collapse of Kensington Windows the previous October had stranded 150 workers until Surace bought the factory and committed to bringing everyone back. Also in March, Barack Obama publicly cited Serious Materials as among the "innovators creating the jobs that will foster our recovery and creating the technologies that will power our long-term prosperity." Colorado Senator Mark Udall delivered similar plaudits during his visit to Serious Materials's Boulder plant in April.
And politicos aren't alone in showering endorsements. In November 2008, Popular Science draped a best-new-product sash around EcoRock, the company's environmentally friendly drywall. The following September, The Wall Street Journal named EcoRock the most innovative environmental product of the year. Revenue at Serious Materials, which neared $50 million in 2009, is up 50 percent over 2008. And though other entrepreneurs are running on fumes, Surace in September closed a $60 million round of financing, doubling total raised capital to $120 million.
"It's been a hell of a year," acknowledges Surace, 47. "But it's not like I have a choice. For this to work, we have to be on a world stage. We have to make people care about what we're doing. It's part of the plan. And my job is to execute the plan."
Headquartered in Sunnyvale, California, Serious Materials is a dirt-under-its-fingernails business situated among such giants of the virtual as eBay and Yahoo. Serious Materials aims to save a billion tons of carbon each year by reinventing, of all things, windows and drywall. Those may not sound like environmental supervillains (though tainted Chinese drywall has caused a panic over sulfur emissions). But after crunching some Department of Energy data, Surace estimates that the construction and operation of buildings -- heating; cooling; lighting; the manufacture of cement, drywall, and glass -- produce 52 percent of global greenhouse gas emissions. In other words, says Surace, the "built environment" presents a far greater opportunity than oft-demonized cars and light trucks, which produce 9 percent of emissions. "What we're doing is brand-new-materials science," Surace says. "This is the big play."
The big play, Surace believes, has received short shrift -- an opportunity cost of the IT revolution, which sucked up trillions in research and development investment. "We've all got BlackBerrys on our hips, but we're building with the same materials we used 30 or 40 years ago," he says. And some of those decades-old products are cutting edge compared with drywall, which has been made roughly the same way for 115 years. (Drywall accounts for about 1 percent of emissions worldwide, Surace estimates; heat loss through windows contributes about 5 percent.) "We can do better," says Surace.
That vision of better is spelled out in applications for 30 patents across an array of goods -- including EcoRock, a gypsum drywall alternative made of recycled waste that cuts manufacturing emissions by 80 percent; and super-energy-efficient windows that reduce emissions from heating and cooling up to 40 percent. The company is improving not only building materials but also the way they are produced. In 2008, it installed a drywall production line in its Sunnyvale headquarters that generates just 3 percent of factory emissions spewed out by typical drywall makers.
