A study of a clean energy startup making a “life-or-death” decision about which market to enter first has won the inaugural Berkeley-Haas Case Series Best Case Award.
Presented today (Sept. 30) by Dean Rich Lyons, the Best Case Award was created to raise awareness for the Berkeley-Haas Case Series and promote excellence in case writing among Haas faculty. The award includes a $2,500 prize.
The winning case, “Alphabet Energy: Thermoelectrics and Market Energy,” was chosen among more than a dozen cases published in 2012. Beverly Alexander, co-director of the Haas School's Cleantech to Market Program, co-wrote the case with five students: Adam Boscoe; Mason Cabot; Philip Dawsey; Luc Emmanuel Barreau; and Russell Griffith, all MBA 12.
The objective of the "Alphabet Energy" case is to teach students how to analyze market opportunities and identify the best initial market, while balancing the challenges of a startup with limited time and resources.
The case begins as Alphabet Energy founder and CEO Matt Scullin, who earned his doctorate in materials science and physics at UC Berkeley, ponders the next step for his prototype of a thermoelectric device that can turn wasted heat into electricity on the cheap. The market is potentially huge: 60 percent of the energy generated in the U.S. is wasted as unutilized heat. Harvesting even a small fraction of it means lower costs and big efficiency gains.
Scullin had licensed a solid-state, silicon-based device developed by Lawrence Berkeley National Laboratory that can be produced at about one-tenth the cost of current thermoelectric devices, making widespread adoption attractive for the first time. His research had shown that customers would demand a quick payback to take the plunge.
Scullin narrowed the application to four potential industries: automotive; aerospace and defense; power generation; and manufacturing. All have large upsides but involve significant hurdles. Scullin was not sure whether Alphabet had the resources to pursue more than one, and the decision could make or break the young company.
The case includes a step-by-step analysis of each industry, taking into account market size, development time and engineering costs, gross margins, and even company culture—such as whether an association with cars and motorcycles is more positive for employees than weapons components.
The Berkeley-Haas Case Series was launched in February 2012 to help promote faculty research, create more timely teaching tools, and strengthen the Haas School's ties with the business community.