Now, get ready for a cooking oil kiosk.
Yep, that’s right: Bring your old cooking oil to the store, get paid for dropping it off and — this might be the best part — have the peace of mind to know that your oil will be turned into biodiesel fuel.
This is the idea behind Grease2green, a startup founded by three students from the University of Washington that are participating in Thursday’s UW Environmental Innovation Challenge (EIC). The event will showcase the efforts of 23 student groups who will be judged by 180 industry experts and investors, with each of the teams aiming to develop a solution to improve the environment.
The competing teams have ambitious ideas. Loopool, for example, wants to turn reclaimed cotton garments and textiles into high-quality, bio-based fiber. TerraMizu, meanwhile, plans to improve irrigation methods in developing countries. And Powered Walks is transforming U.S. shopping malls into holistic ecological green buildings.
“The thing I love about this is that the students come out of it with really big ideas,” said Connie Bourassa-Shaw, director of the UW’s Buerk Center for Entrepreneurship. ‘”They want to disinfect water and replace the rare earth element phosphors in LED lighting — like, holy hell, that’s a big thing. That’s not like starting a t-shirt company. These are solving big problems.”
Bourassa-Shaw helped start the EIC with the UW’s College of Engineering and the College of the Environment five years ago. Open to groups of college students in the state of Washington, the quarter-long program encourages students to pick a problem they’re passionate about, figure out how it can actually be fixed and then come up with a plan for commercialization.
The program has pumped out a number of impressive startups. Last year’s first-place winner, PolyDrop, went on to land $275,000 in grants to turn regular coatings like paint into conductive substances, while Pure Blue Technologies, last year’s runner-up, was awarded up to $1.5 million in equity funding following the EIC. There’s also LumiSands, winners of the 2012 honorable mention award, which has been moving forward with its plan to use silicon-based nanoparticles for cheaper and greener LED bulbs.
In addition to encouraging students to help clean up the environment, the EIC helps teach these young entrepreneurs learn what it really takes to turn an idea into a full-fledged business.
“When you actually have to build a product, things change,” Bourassa-Shaw said. “What happens is you discover how difficult it is, or that the technology doesn’t work, or that it’s too expensive.”
The cooking oil problem
Grease2green co-founder and CEO Raustin Memon had an interest in renewable energy ever since he learned how to convert algae into biodiesel while working in a Washington State University lab during high school in Pullman, Wash.
“I really liked the idea of renewable energy,” he said. “Generally, waste turns into nothing, but now you can turn it into something really useful.”
When he arrived at the UW in 2011, Memon joined a biodiesel co-operative club on campus and started learning how to convert cooking oil to biodiesel. However, there weren’t many places in public to actually do so.
That’s when a lightbulb went off in Memon’s head: Mobile laboratories could be set up in cities to dump used cooking oil.
But others weren’t so fond of the idea. Memon met with Jeff Haus, CEO of Seattle-based General Biodiesel, who pointed out several problems with his approach.
“The initial idea was interesting, but it didn’t have commercial legs to it,” Haus said.
Haus told Memon about a company in Turkey using kiosks to collect oil and how General Biodiesel had thought about doing something similar. From there, Memon dug through City of Seattle statistics to figure out how much oil was going down drains.
What he found was surprising: The city spends more than $600,000 a year fixing clogs thanks to more than 544,000 gallons of fats, oils, and greases going down drains every month.
“I didn’t realize how bad of a problem this was,” said Memon, pointing to a 2010 video from Seattle Public Utilities showing clogged pipes from fats, oils, and greases.
There were also other issues with used cooking oil. People who threw their oil in the trash were not only adding more garbage to the landfill dump, but also risking starting a fire. In addition, plumbing problems caused by cooking oil were forcing homeowners to spend thousands in repair costs.
A business model emerges
Memon and his co-founder, UW Masters in Public Administration candidate Kate Baker, knew they had a solution to a legitimate problem and came up with a two-pronged approach: Educate people about the damaging effects of used cooking oil, and give them incentives to bring the oil to kiosks set up around town. That way, the environment would be cleaner, people could receive money or coupons for what would have gone down the drain otherwise, and the used oil could be converted into biodiesel — which is how Grease2green would earn a profit.
“This wasn’t just fixing an environmental or municipality issue, but it had huge potential as a business,” Memon said.
But would people actually take the time and effort to bring their cooking oil to grocery stores? Memon and Baker found that ethnically diverse populations cooked with more oil since they made a good amount of fried food. In fact, a pilot program that encouraged oil recycling in a Philadelphia Indonesian community was quickly gaining popularity at local community centers.
“After seeing that, I thought that this was something that could work,” Memon said.
Baker, the co-founder with a background in public policy, worked at Outerwall in a fellowship this past summer that focused on sustainability. She reached out to her former colleagues at the Bellevue-based company, which is well-versed in the kiosk business with products like Coinstar, Redbox and ecoATM, and got a better idea of the manufacturing and design process within the kiosk industry.
Ben Anderson, a commodity manager at Outerwall, advised the startup to go completely digital, as opposed to following the Coinstar model of receipts that you take to the register. That way, customers would receive points in exchange for used oil they bring in, with one bottle typically worth a few dollars or 10 percent off of groceries bought.
“We are also in talks with a vegetable oil company about offering an even greater discount or potentially a free bottle of oil when you return the equivalent volume,” Memon added.
Once they nailed down the economics of the kiosk, the student entrepreneurs found a few potential customers and landed a partnership with General Biodiesel, a company that has the technology to actually turn the oil into biodiesel.
“The idea has a lot of merit, but what remains to be seen is how willing Americans are to take this extra step,” said Haus, the General Biodiesel CEO. “It’s the same question people asked decades ago about recycling cans and newspapers. I think it lies within Americans to do it, but Grease2green needs to do some tests and more marketing.”
Grease2green plans to start with a two pilot kiosks in the Rainier Valley and International District neighborhoods of Seattle later this month. Eventually, the company wants to roll the kiosks out across the country.
“I see this expanding very quickly,” Memon said.
The importance of the Environmental Innovative Challenge
By starting a company, Memon has learned how to better find information, apply for prototype money, manage teams, develop timelines, get in touch with potential business partners and perhaps, most important of all, develop a thick skin.
“There were a lot of people that didn’t think this idea could work, or thought there wasn’t a market, or they didn’t understand the idea or had no interest at all,” he explained. “So a big part of this experience was being able to go through their comments and analyzing their critique, acknowledging what we can fix and improve, but ultimately not letting it bring us down or lose confidence in the idea.”
That’s a big part of what the Environmental Challenge is about, says Bourassa-Shaw.
“At the very minimum, even if these teams don’t continue working on their ideas after this, at least they have experience thinking through the problem-solution part of this,” she said. “Is it appropriate for a consumer market, for an international market, for the developing world, or for somebody who has all the money in the world? That to me is the lesson that comes out of this challenge.”
And even if those ideas never pan out, the connections students make with the larger Seattle entrepreneurial community and what they learn about starting a company can go a long ways.
“There’s no end to the number of environmental problems that exist, so what can smart, motivated and energetic students do about that? That’s the question,” she said. “The fact of the matter is, they can do a lot.”