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Fueling a vehicle with natural gas is not currently convenient or cost effective. But Onboard Dynamics is hoping to change all of that. And that could be a billion-dollar idea that changes the future of transportation fuel.

“The idea is natural gas compression onboard vehicles,” said Rita Hansen, CEO of Bend-based Onboard Dynamics, Inc.

“We are only four months into really launching the company, working through our milestones, doing the technology development, and making sure that we come up with a commercially viable product in 18 months.”

The spark

Chris Hagen, an assistant professor at Oregon State University-Cascades and the chief technical officer of Onboard Dynamics, has developed a natural-gas refueling system for vehicles. An internal combustion engine is modified so one of the cylinders is dual purpose: It can power the vehicle and also compress natural gas coming from a low-pressure supply line at a home or business and send it to the fuel tank to be stored for later use.

Hagen, who previously lived in Colorado, developed his idea as a response to a funding announcement from the U.S. Department of Energy/Advanced Research Projects Agency-Energy (ARPA-E). ARPA-E was looking for technology that would move the needle on transportation fuel, reducing the dependency on gasoline and diesel. He submitted his idea and received $700,000 in funding, which ultimately grew to $1 million, to build a proof of concept to show natural gas compression onboard a vehicle could work.

About a month later, OSU-Cascades hired Hagen.

Finding a natural fit

Natural gas, a clean-burning alternative fuel made predominantly from methane, has a number of advantages as a transportation fuel including its domestic availability, widespread distribution infrastructure and low cost, the U.S. Department of Energy’s website states.

Only about one-tenth of one percent of natural gas is used for transportation fuel, according to data from the U.S. Department of Energy. Roughly 150,000 vehicles are powered by natural gas in the United States and there are just over 800 public natural gas refueling stations.

The issue was not Hagen’s technology. It was the ability to commercialize that technology.

“Hagen was hitting the ball out of the park on the technology side, but he needed help commercializing it,” Hansen said. “ARPA-E does not want to fund science projects. They actually want to see if there’s a way to get it into the marketplace.”

Because Hagen was new to Bend, Deschutes County Commissioner Tony DeBone suggested Hagen reach out to Economic Development for Central Oregon for help. Jim Coonan, the EDCO venture catalyst manager at the time, gave Hagen a list of names from his stable of experts in energy and engineering and Hagen started making calls.

Hansen and Jeff Witwer met with Hagen to help bring his concept to life.

“Our number one goal in the beginning was to help Chris get back on track in the commercialization effort,” she said. “At the time we weren’t thinking about starting a company.”

Gaining momentum

In June 2013, Hansen, Witwer and Hagen gathered with a number of experts in the industry to hold a business strategy planning session. Using the lean startup model, they brainstormed to determine the right business model, who the target market would be, how to launch the technology, and what resources they would need.

Onboard DynamicsIt was after that meeting Hansen and Witwer fully realized the potential of Hagen’s idea. In August they formed a team, named the company Onboard Dynamics, and applied to the Bend Venture Conference – which is now one of the largest angel-investment conferences in the Pacific Northwest.

The ARPA-E program director met with the team the day before Thanksgiving 2013, outlining a path to more potential funding to help take Onboard Dynamics to the next level.

“I thought he was talking like hundreds of thousands of dollars and he was talking millions of dollars,” she said.

Pouring fuel in the tank

At that point, Hansen said Onboard Dynamics realized it had potential access to significant funds through the ARPA-E program to really launch the company based on the success of Hagen’s work. The funds would allow Onboard Dynamics to create a commercially viable product.

“What they realized is that we were still not fundable. We couldn’t go out and raise traditional capital because there were still so many risks. All we had was a proof of concept,” she said. “We weren’t looking for seed money, we were looking for significant funds for continued technology development. Traditional capital funding sources are conservative and don’t typically fund at that stage.”

Over the next five months, Onboard Dynamics/OSU worked on the next generation of the technology and the presentation pitch for the additional funding from ARPA-E. And on April 8, the company received a phone call from ARPA-E announcing Onboard Dynamics had been selected for a new award of $3.6 million total.

ARPA-E agreed to put in 80 percent, $2.88 million, but Onboard Dynamics had to come up with the other 20 percent of the award.

“At this point … I knew I needed to go out and find $720,000,” she said. “And that’s where Oregon comes in.”

Weathering the storm

Hansen said she had been discouraged every day by rejections because the company wasn’t developed enough. But she knew in order to fully launch Onboard Dynamics and its technology, she needed more capital.

“We’d already been pitching and had gotten no’s, no’s, no’s from other private sources,” she said. “I don’t know how many rejections I’ve gotten … too many to count.”

RefuelingHansen kept going with $3.6 million on the line. She reached out to Oregon BEST, which has a gap funding program up to $150,000, and Oregon Nanoscience and Microtechnologies Institute (ONAMI), which has a $250,000 gap funding program.

“I was being very selfish, thinking I could go after both of those; and I did,” she said. “It was the first time that they actually came together at the exact same time to invest in a company.”

But Hansen had to go through a few hoops to be able to accept both investments. The rules, established by the Oregon Innovation Council, prevented ONAMI and Oregon BEST from collaborating on their funding. Hansen called up Senator Betsy Johnson. Senator Johnson listened to Hansen’s story and the obstacles Onboard Dynamics was facing and revised the way the rules were written in 48 hours so Onboard could receive funds from both organizations.

“If these two programs didn’t exist I would have never been able to execute on the ARPA-E award,” Hansen said.

Continuing the journey

In the history of ARPA-E, she said this is the second largest award given to the state of Oregon.

“I needed to feel like Oregon wanted this. It would have been easy to walk away,” she said. “I guess I was driven by a sense of accomplishment and having this legacy to say we got this $3.6 million dollar award for the state of Oregon, in Central Oregon no less.”

Hansen said her formula to success has been her tenacity, her ability to pivot, and her network of support throughout the state.

“I always use mountaineering analogies because I’m a climber. You don’t lose sight of the summit, but you may have to change your route when you come up against an obstacle,” she said. “You may have to figure out other ways to get around or overcome those obstacles, but [you can’t] lose sight of what the end goal is and you [have to] stay clear about that and stay focused.”

Tapping every resource

Hansen said her summit was to execute on the ARPA-E award, but she couldn’t have reached that summit without team work.

“I’m a 50-something-year-old entrepreneur, but I still needed help. You have to not be afraid to ask for help and leverage your network and leverage your rolodex,” she said. “Obviously I am very, very proud to have made this happen, but there’s no way I could say I did this alone. I have to credit our entire team for complementing my weaknesses.”

Onboard Dynamics is projected to become a $25 million company in five years, Hansen said. But there are still challenges the startup company is facing.

On the roadLike most startups, Onboard Dynamics is still fundraising and will continue to be as the company progresses. But a bigger hurdle is the company’s loss of its vice president of engineering, Witwer. Due to health reasons he is no longer able to be a full-time member of the team.

“I’m trying to recruit somebody to be his replacement, which is a huge challenge,” she said. “Jeff was in this boat with us for the last 18 months. I talked to this person every day, multiple times a day, and to now not have that person in the boat is a little scary.”

Over the next few years Onboard Dynamics anticipates being able to double its workforce. To date, there are 14 paid employees, contractors, postdoctoral scholars and students working on the Onboard project.

Consistent improvement

Part of Hansen’s goal is to help develop an energy cluster in Central Oregon with Onboard Dynamics serving as one of the anchor companies.

“We have a whole energy engineering department that’s teaching students to do this work,” she said, referring to a program at OSU-Cascades, of which Hagen is an integral part. “Right now [students] have to leave the area after they graduate to go find jobs. That’s not what we want. We want to create an industry here.”

As the region develops its energy engineering industry, she said it will attract more funding and other companies. This will in turn fuel the sector’s growth and place Bend, as well as Oregon, on the map.

“We already have this reputation with the [U.S. Department of Energy] for getting stuff done; coming up with innovation and new ideas and actually seeing them through,” she said. “I was at the right place at the right time for this opportunity. It is a success story. The story is not done yet, but this whole community came together to make this happen.”

For more information, visit http://www.onboarddynamics.com/.

Navigating a confluence of technology and sustainability

Charles Steinback still remembers the day a San Diego fishermen read him the forty-five minute riot act.

It was over breakfast. And the conversation was a heavy one: Regulators were mapping the fishing grounds off the coast of California. And while the end-goal was to carve out habitat protections that would make areas off-limits to fishing, it fell to Steinback to assure they did the least amount of damage to fishing towns.

At the time, Steinback was relatively new to Ecotrust, the Portland-based nonprofit focused on ecosystem and civic resiliency. Fresh-faced and fresh out of college, he had hoped his efforts would be welcomed. Instead, what he got was a proverbial finger in his face. And a nearly hour-long lecture about the meaning of community—from a man who questioned whether Steinbeck even knew what the word meant.

“I took that to heart. It was years ago, but I remember literally walking away from that conversation, going back to my hotel room, and sitting there for three hours writing a ten-page email to Pete about community and what it is, and here’s what it means to me, and here’s why I want to work with you, and why I need you to work with me.”

The email earned the critic’s respect and buy-in. It was a moment that showcased what Steinback would bring to the business of ocean conservation: deep roots in a fishing community, a collaborative approach, and a strong belief that information-sharing can make ocean management—often a divisive, heart-wrenching business—better than it otherwise is.

Combining disparate disciplines

Flash forward, and Steinback is now managing director and cofounder at Point 97. (Pronounced Point Nine Seven, a nod to the percent of the earth’s water in the ocean). The for-profit company, launched as an Ecotrust subsidiary in August 2013, is Steinback’s next career iteration of fresh-faced optimism. It still has him doggedly focused on bettering ocean management.

In its rebirth as a startup, however, Point 97 has taken the former ocean planning division at Ecotrust and made it into something more likely found in the Silicon Valley.

It’s a three-way marriage, if you will, among techies, data geeks, and conservationists.

Stacy Fogel, marketing director at Point 97, puts it this way: “We create technology solutions for ocean management, because these tools enable these communities that depend on the ocean to take care of it.”

Finding the right person

Steinback was the obvious choice to take the reins. “Charles is a smart guy. He’s a really good listener. He’s low-key. But he understands the big picture,” said Ed Backus, Ecotrust’s former vice president of fisheries. When people in fishing towns work with him, they don’t feel like they’re being pushed to acquire something they don’t need. They feel like they’re learning the things they need to pay attention to.

Charles Steinback

Charles Steinback, cofounder and managing director, Point 97

In that way, Steinback hasn’t come so far from his roots. Raised in Astoria, he isn’t from a fishing family. In fact, both of his parents are teachers. But he grew up in an era of mill closures and constrained fishing, and was eyes-wide on the fact that most of his friends’ fathers were unemployed during his middle school years. For him, that competing pressures on natural resources could make a whole town ache wasn’t something he ever had to learn. He knew it. And when he brought that perspective to ocean conservation, he brought something the movement had often lacked.

Though he was in tune enough with his own constitution to know he wasn’t a fisherman, wasn’t going to be a lumberjack, he said always knew he wanted to lend a hand to communities like Astoria. He arrived on the doorstep of Ecotrust in 2001 having just earned a degree at UMass Amherst.

“I literally just walked in, handed them my résumé and said I would do anything,” said Steinback.

Ecotrust embodies something uniquely Oregonian

Why Oregon? The simple answer is Ecotrust, a leader in sustainable fisheries management, which has provided the vision and resources to support Point97.

At a time when much of the regulatory environment—and nonprofits with ocean missions, really—were focused on the idea of “overfishing” as the root of all evil (90s and 00s, mostly), Ecotrust was really successful at plugging into fishermen as a resource and getting at deeper truths about our oceans. Yeah, we’ve overfished. But there are fewer fish for other reasons. Migratory changes related to ocean acidification and rising temperatures have also produced the troubles we see. And Ecotrust was among the first to approach fishermen and fishing communities in an inclusive and collaborative manner to solve problems around these issues.

When states first began to look at carving out ocean areas for marine conservation and renewable energy, for example, Ecotrust was deploying guys like Charles to figure out how to keep those new rules from just gutting fishing towns and family fishing operations. And Ecotrust was also among the first to recognize that some systems designed to prevent overfishing, however environmentally sustainable, are so capitalistic that they have the effect of locking a lot of people out, including whole cultures, while funneling money to people who don’t actually fish.

Ecotrust’s approach is sadly far from typical. There are a great many nonprofits and a whole lot of government regulators too, who until recently viewed fishermen as pests to be gotten rid of, and those fishermen are such a small constituency that they were easily rolled. Now, as conservationists come around to the idea that fishermen have deep knowledge about our oceans, and, oops, wait a minute, we actually also need these people to eat, Ecotrust is way ahead of the game.

Ed Backus, Ecotrust's former vice president of fisheries

Ed Backus, former vice president of Ecotrust fisheries

Now, if other groups want to get any meaningful conservation work done – work that isn’t just knee-jerk simplistic and actually includes preservation of fishing culture and communities – they need a Point 97. What that brand is selling, more than anything, is trust. It was hard earned and carefully built through years of closely listening to real people affected by change. That would not have happened without the respect and expertise guys like Charles and Ed, both of whom really know fishing towns and fishing people, offered fishing people. They learned that in Oregon. You can think of Backus as the godfather of this stuff, and of Charles as his successor, nonprofit or none. And now Point 97 has the secret sauce: they truly believe that American culture is better off if we preserve the culture of fishing people, even if we’ve got problems to solve, and fishermen know they are allies.

Mapping the future

Over more than a decade, he has helped Oregonians map the territorial sea, carving out space for energy development. He’s assisted fishermen like Pete from San Diego in protecting their communities when marine protections came about. But it was his hand in designing an online planning application as part of that California-effort that ended up branding him someone who could use technology to facilitate conservation. That his planning tools paired community needs with habitat protections, and helped achieve more nuanced goals than push pins on a map, got attention. The money seemed to follow.

Now at the helm of Point 97, he says what’s flowed from the company’s launch fifteen months ago is a “lot of interesting growing pains.”

“Growing up in a nonprofit doesn’t necessarily prepare you for running a company,” said Steinback. In that way, he went from a structure that was always chasing money, and stretching its own capabilities, to learning that what works in business is the opposite of that: a model with a tight focus and careful, managed stewardship of limited products.

“We’re full of good ideas. But good ideas that people pay for? And that can support a business? That’s what you have to figure out,” he said.

Point 97 on the job

Though he’s struggled to find examples of for-profit companies that sprung successfully from nonprofit parents, and combat similar issues, he says he’s getting good guidance from the Portland startup community, where its not at all odd to pair funding and development goals with social impact missions. In that sense, being in Portland is giving Point 97 the support it needs to grow from within a model that might make it an outlier elsewhere. And that assistance is unlocking potential.

“I can go meet with a CEO of another startup that’s maybe four or five years along,” for advice and mentorship not available in the conservation community, he said. “I don’t think I would be experiencing those things if we were still operating from within the ENGO.”

Next on the menu?

Software and data portals. Tools for data collection, analysis, and synthesis. And a healthy dose of people-products like civic engagement and advisory services.

The outcome is that Point 97 has turned rugged, no-nonsense fishermen of Oregon’s Dungeness Crab into iPad-toting data junkies, now testing, with the Oregon Department of Fish and Wildlife, the viability of real-time harvest reports on crab. It’s a platform that also aims to offer the fishermen business tools. Other projects have been deployed in the Mid Atlantic, where surfers are mapping recreational use of the ocean as wind turbines stake out space, and in the Solomon Islands, where a new mobile app is tracking fish as they head to market.

Whether mapping boater activity in the Northeast, or building a monster database to underpin planning in the U.S. Virgin Islands, the thirteen employees at Point 97, six of them developers, are busy. They were already a revenue positive division before becoming a company. Now, they’re looking for growth.

“When you’re out there providing tools to help people make decisions, to do that on a global scale, you’ve got to get to scale,” said Backus.

That’s why Ecotrust turned its ocean division loose as a for-profit. It was an effort designed to address the fact that, to really have impact on ocean issues, those impacts had to be wide-ranging.

“It carves out a section of space where people have different performance standards, the pace is different, there’s more decision-making power given to the CEO, and things can happen in a much more rapid-fire pace, and that’s what’s needed,” he said.

Continuing to refine

For Steinbeck, his Sisyphean contest still lays ahead. Likely, 2015 will see Point 97 continuing to refine its focus. Though he’s aware the company is doing too much—something he called an “old habit” from the nonprofit days—Steinback said its test is how to tweak a for-profit model in a way that still resonates with longtime partners while attracting customers for the company.

The solution will come from the entire team, one he describes as a group that wins together, loses together, and sometimes wants to rip each others hair out, but always comes back the next day committed to solutions and moving forward.

Steinback says they are realizing that the company may have to limit its direct work in communities in the future. Though working with people is a practice that, in the past, allowed the ocean planning division to gather ideas, solve problems, and measure direct results at Ecotrust, Steinback says its also a practice that’s been expensive and time consuming for Point 97, and is unlikely to scatter the company’s social impact as intended.

“There’s this tension or struggle between working in communities with people and trying to make a profitable company. That’s our biggest challenge. It’s trying to figure out what that transaction will look like,” he said.

When they answer that question, Point 97’s team will be bringing the most successful of the tools they’ve built in their backyard to the world.

“We’ve just barely tapped into that,” Steinback says. And when he talks about really plugging into that success, the characteristic zeal turns on. It’s easy to hear that fresh-faced kid from Astoria.

And it’s easy to understand why he’s still got work to do.

For more information, visit http://pointnineseven.com, follow Point 97 on Twitter, or like Point 97 on Facebook.