Jim Poss stopped at a Logan Airport newsstand to flip through the June 2004 National Geographic cover story that declared, “The End of Cheap Oil.” Jim's enterprise, Seahorse Power Company (SPC), was an engineering startup that encouraged the adoption of environmentally friendly power generation methods. Jim was sure its first product, a patent pending solar-powered trash compactor, could make a real difference.

In the United States, 180 million garbage trucks consume over 1 billion gallons of diesel fuel a year. By compacting trash on-site and off-grid, the mailbox-sized “BigBelly” could cut pickups by 400 percent. The prototype—designed on the fly at a cost of $10,000—had been sold to Vail Ski Resorts in Colorado for $5,500. It had been working as promised since February, saving the resort time and money on round trips to a lodge accessible only by snow machine.

Jim viewed the $4,500 loss on the sale as a marketing and proof-of-concept expense. But with a 20-machine production run under way, SPC had to reduce component costs and increase production efficiencies.

Jim put the magazine back and walked to the New York Shuttle gate. An investor group in the city had called another meeting, and Jim planned to ask some hard questions about their proposed deal. He thought they should write him the check they had been promising—and let him run SPC the way he saw fit—or decline to invest so he could locate other sources for the company's $250,000 seed round. 

Preparation Questions

1. Analyze this case using the Timmons entrepreneurship framework (entrepreneur–opportunity– resources). Particularly note the entrepreneur's traits and how he gathered resources for his venture. 

2. Discuss Jim's fund-raising strategies. What other options might SPC consider for raising money? Is SPC a good investment? 

3. Discuss SPC's growth strategy. What additional market(s) would you recommend it pursue?