In 2006, the movie An Inconvenient Truth publicized a timetable for global annihilation. For Surace, the film was a road-to-Damascus moment. He dug into the numbers, consulting with a friend from NASA, and concluded that some of Al Gore's models were too conservative about the rate and impact of climate change. Suddenly, Surace found himself with a cause transcending -- though never replacing, he cautions repeatedly -- making money.
"It's this huge thing that's overtaken him," says Lalonde. "All of a sudden, he's driving an electric vehicle. He's my only customer who wants business cards printed on 100 percent recycled paper with soy-based ink. He educates people about their carbon footprint."
Despite his public eloquence about climate change, Surace is almost curt when discussing his own conversion, as though the subject makes him uncomfortable. "Of course I'm more passionate about this than soundproofing, because this can have a fix-the-world good result," he says. "That said, I'm still just executing a plan."
It seems too big for the room it inhabits: a 180-foot assemblage of platforms, elevators, rollers, and vats, hanging like huge steel udders. The machine is just a baby, though, able to produce only a limited line of EcoRock, which is being beta-tested by a number of Northern California contractors. Once the operation is perfected and the debt markets improve, the company plans to install larger lines in new plants around the country. Each facility, Surace says, should achieve carbon savings equivalent to taking 65,000 cars off the road. Most customers -- who will begin installing the product next year -- are contractors working on LEED projects. (Leadership in Energy and Environmental Design is an industry certification system for green buildings.)
Unlike traditional drywall, which is made of gypsum, EcoRock is produced from the recycled waste of steel and cement plants. That means there is no mining, no calcining (a thermal treatment process), and no baking (the calcining and baking of gypsum produce as much as 200,000 BTUs per 4- by 8-foot panel of drywall). The formula that keeps EcoRock dry, eliminating that trip through the ovens, is among the company's most significant breakthroughs. In addition, waste used in EcoRock production is waste that doesn't end up in a landfill. And EcoRock itself is recyclable -- into new EcoRock or other building materials. EcoRock panels cost $14 or $15 -- close to twice the price of ordinary drywall.
Serious Materials has also pumped dollars into improving technology that layers glass, coated film, and inert gas to make windows more energy efficient than almost anything else on the market. Energy Star, the U.S. standard for efficient consumer products, "is actually a really low bar," says Ian Sullivan, Serious Materials's vice president for windows. "There's a perception it's a good thing, but we have opportunities to do so much better."
Public-policy winds are blowing the company's way. The American Recovery and Reinvestment Act of 2009 is shoveling nearly $13.6 billion toward housing programs, many aimed at improving energy efficiency. Serious Materials recently formed a government sales group to exploit such opportunities. Even without a penny of federal money, which is only now sluicing through the pipeline, the company has increased revenue 50 percent over last year. More than 200 new leads roll in each day in response to corporate marketing that stresses saving money as much as saving the planet.
The 260-employee company is not profitable, though Surace says it would become profitable "almost instantly" if it wasn't investing so much in R&D and production capacity. "We specifically decided to continue to invest in growth," he says. "We're building this to go public."
Surace, meanwhile, sits atop the sales pyramid, negotiating commercial deals with large property managers and others that he plans to announce early in 2010. He spends much less time in the lab, though when R&D is too snowed under to explore tantalizing new technologies, he will often investigate on his own. To feed his invention jones, he also devotes some weekends to experimenting with sausage recipes. The current challenge: a maple breakfast sausage made from chicken or turkey and sweetened without syrup to prevent scorching. "It's been complex to get the texture and the taste right," says Surace. "I've gone to an artificial maple and used Splenda to sweeten it up. The Splenda won't melt like sugar will."
Surace also spends more time than most CEOs fine-tuning his presentations, a task he refuses to delegate. One recent production consisted of 125 slides displayed over half an hour. ("Basically, a movie," says Surace.) He debuted it before 36 VC firms over the summer and scored $60 million from four new sources -- led by Mesirow Financial in Chicago -- and five repeaters. "When it comes to fundraising, a lot of CEOs make excuses," says Holland. " 'The recession. The building industry. It's hard.' Kevin never does any of that. And he's getting a very good price for the company."
Adds Lalonde: "Kevin knocks on doors, and if that doesn't work, he knocks them down." Nowhere is that persistence more evident than in the events that transpired last winter in Chicago.
The lunchroom at the former Republic Windows plant is shrouded in shadow. The yellow tabletops are bare; the kitchen, a dark void; the only sound, the distant clanking of air-circulation machinery. But a year ago, this nondescript room looked more like an emergency evacuation center. For six days, more than 200 union workers and their families camped out here to protest what they considered an egregious injustice. On December 3, the workers received three days' notice that the 40-plus-year-old plant would close. Severance and accrued vacation pay would not be forthcoming. The summary dismissal violated federal law requiring 60 days' notice before the shuttering of a company.
