Getting Started as an Entrepreneur/Money/Profile: Student-Run, Their Way
Student-run, their way: EcoTech Marine
Amid all the talk in this section about elevator pitches and equity, burn rate and liquidation, preferred stock and venture fairs, we present to you one simple and reassuring fact: you don’t have to get fancy angel or VC funding to succeed. In fact, in certain situations you might be better off without it. Such is the story of EcoTech Marine: a team of students with enough entrepreneurial spirit and drive to take a product all the way to market themselves, with a minimum of private investment. This profile follows EcoTech’s story from idea to prototype to successful company, detailing exactly how they got the money at each step along the way.
But first we need to back up—way up, to when EcoTech co-founder Tim Marks was in eighth grade. After getting “fish fever” and maintaining freshwater aquariums for several years, Marks set up a ten-gallon “reef” aquarium, nurturing live corals and other organisms in a saltwater environment. But Marks soon discovered that maintaining a reef aquarium is a complex task that practically requires a chemistry degree, to say nothing of time and effort invested. When the demands of the tank overwhelmed his eighth-grade education, Marks dismantled it and quit the hobby altogether.
Fast-forward to his senior year in high school, when, thanks in part to the Internet, Marks caught fish fever again. He was mentored online by Rick Dickens, webmaster of reefs.org, a popular online resource for reef keepers. The following year, as a freshman at Lehigh University, Marks met Justin Lawyer, a physics student at Oklahoma State University, in a chat room for reef enthusiasts. The two students realized they shared a vision of equipment that would automate the difficult task of reef aquarium maintenance, and they traded ideas and 3-D models of potential products. Before Marks finished his freshman year, using nothing but small amounts of their own personal funding he and Lawyer launched a full-fledged company, calling it EcoTech Marine.2 Their goal? Become a provider of innovative, high-end, automated equipment for serious aqua hobbyists.
Hard work and grant writing
There was much work to be done, however. Doing most of the prototyping in the basement workshop of Marks’ home, the team built a prototype of its first product: the Kalkwasser Reactor, a device that automatically replenishes and maintains an aquarium’s calcium and alkalinity levels, vital to the health of corals.3 It was a rough alpha version, though: they needed several thousand more dollars to develop the device fully. “We’d been funding the venture ourselves for several years,” said Patrick Clasen, a fellow student entrepreneur at Lehigh who quickly caught reef fever and joined EcoTech. “But that was no longer cutting it.”
The team decided to submit the reactor in the Invitation to Innovate contest sponsored by the Integrated Product Development (IPD) program at Lehigh. IPD is a comprehensive entrepreneurship training program in which teams of engineering, arts, and business students collaborate for one year to make and market products. EcoTech won the contest, getting $2,000 and the chance to work with business and engineering students for two semesters, all in preparation to submit an NCIIA Advanced E-Team grant proposal.
They did submit, and received $8,380 in NCIIA funding, mostly for prototyping. By the end of his sophomore year at Lehigh, Marks and his team had sold twenty reactors and seemed well on their way. But at the same time Marks knew that EcoTech needed more than just one product to be a viable business. “As it turned out,” says Marks, “the reactor project didn’t go as far as we hoped. But it did get our foot in the door in terms of business, manufacturing, and design experience. And, most importantly, it was the stepping-stone in terms of the next product we developed, which has been very successful.”
VorTech™ to the fore
Like so many other entrepreneurial successes, the turning point for EcoTech came when it made contact with an industry player. At a local reef club meeting Marks met Andy Howard, President of IceCap, Inc., a well known name in the reef aquarium hobby. Marks and Howard connected, and Marks mentioned an idea for what he called the VorTech, a new circulating pump for aquariums that would mimic a natural wave-like water flow and minimize the intrusion of heat and bulky equipment inside the tank. Howard, it turned out, was working on an idea for a battery-powered backup circulating system for aquariums, which would require a pump. The two ideas meshed: as a new company, EcoTech needed industry support to launch the product successfully, and IceCap wanted a discrete, high-end pump for their backup system. Marks and Howard arranged a formal meeting, signed nondisclosure agreements, and Marks brought to the table two different pump ideas. Says Marks, “IceCap immediately gravitated toward the VorTech, saying, ‘We want that, build us that!’ That’s when we really turned it into high gear and started product development.”
In the meantime the EcoTech team members had completed their undergraduate degrees. But the project was far from over: they both stayed at Lehigh and continued to work on EcoTech, with Marks enrolled in the master of engineering in mechanical engineering program with a focus in IPD, while Clasen pursued a master’s in materials science and engineering. Their tuition was paid for, and they received stipends. Marks even became an IPD teaching assistant, helping undergraduates with their entrepreneurial projects.
More news came in on the money front: EcoTech received another Advanced E-Team grant from the NCIIA, this time for $18,738; through Lehigh they won a $9,000 “Agile Manufacturing” grant to help with tooling and production; they won $15,000 from the State of Pennsylvania as part of the Keystone Innovation Zone (KIZ) program, designed to prevent brain-drain and keep Pennsylvania-based ideas within state boundaries; and lastly, they secured a line of credit from a local bank. The line of credit, Marks says, is especially nice as a fall-back plan. “Because of the line of credit, we’re assured that if we need more money, we can get it. If we need to increase production quantities, or if things slow down, the line of credit gives us that insurance. It’s a good thing to have.”
And while not every team at Lehigh receives free office space and lab equipment, EcoTech did. According to Marks, EcoTech secured the space and equipment “just based on the fact that we had been doing this so long and were so dedicated.”
In partnership with IceCap, EcoTech developed a polished prototype of the VorTech pump and debuted it on the market successfully in 2005. The specialized pump is now sold through a variety of online reef equipment companies, and the future of the product and the company is bright. “We’re getting our first product out the door now,” says Marks. “Product has shipped and more product will ship soon.”
And EcoTech isn’t stopping at the VorTech. “We’re developing a remote control for the VorTech right now,” says Marks, “and we have a number of other products in mind. Eventually we want to launch a complete line of products for advanced aquarists, a line of products that will completely automate the reef-keeping experience.”
Using a mish-mash of funding sources—NCIIA grants, personal money, Lehigh prize money, State of Pennsylvania money, bank money, and finally corporate partner money—EcoTech grew their venture from the ground up, their way.
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