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July 24, 2014

SHELBY SHARES: Entrepreneurs compete for cash, prestige at Minnesota Cup

About 10 years ago, a couple of Minnesotans got together and decided it was about time to honor and encourage local entrepreneurs and help them get their businesses off the ground. So Scott Litman and Dan Mallin came up with the idea of The Minnesota Cup. It would be a contest of ideas. Scott and Dan went out and found businesses and schools that would put up prize money. This year, at the eighth annual Minnesota Cup competition, they handed out a total of $200,000 to the winners.

Aside from the money, which is always useful to people trying to carry their ideas to market, the Minnesota Cup carries prestige – and it attracts more attention and money.

There are six divisions open to anyone with a new idea, product and business plan. Awards are given in clean technology, biosciences, social and high tech. There is even a general business category, and one specially designed for student ideas. Altogether, there are nearly 100 judges. Finalists must make presentations and withstand an often withering review process.

More than 1,000 entrepreneurs entered the competition. Only six made the finals.

Julie Gilbert-Newrai won the grand prize this year. Her new company is called PreciouStatus, and like so many entrepreneurial enterprises, it arose from personal experience.

She and her husband had an 8-week-old daughter when her husband suffered a brain hemorrhage.

“It was during those months that I learned firsthand how difficult communications with loved ones can be during times of crisis,” she said. She couldn’t get the information she needed. There was no system. So Julie invented one.

With her technology, hospitals, daycare providers, care facilities and doctors can communicate in real time with families. Julie won $25,000 for winning her division, and another $40,000 for being judged best in the field.

I participated as a judge in this year’s competition in the category of Clean Tech and Renewable Energy. The three finalists were impressive, each with a valuable new idea. One involved enlisting farmers to grow algae as a cash crop. Another had created a computer-based monitoring system for businesses and buildings that could pinpoint inefficiencies. But the winner was a carpenter.

Paul Schmitt and Don Shelby

Paul Schmitt has been building houses and barns for years. He also built an impressive background in science. He became a contractor, and when the building economy went south, he knew it was time to ramp up an idea he’d been working on for 10 years.

Paul said it all started when he was building horse farms.

“Everyone wanted those plastic fences,” Paul said. “But, when it gets cold, that plastic gets brittle.”

So he started studying plastics. He discovered, and this is a simplification of what he told me, that there are two types of plastic: the kind you can recycle and make new things from, and the kind that resists any attempt to monkey with it.

He wanted a substance that could hold up in cold weather. He discovered fly ash. It is a byproduct of coal-fired power plants. He found that if he added some fly ash in different proportions to recycled plastic, he could make about anything he wanted. He could make foundation and landscaping blocks with a lot of fly ash or use less of it and make siding for homes.

And, so, Envirolastech – his company – was born.

Along the way he found that his process created a new way for the plastic to bond with the fly ash. He invented machines to pelletize the recycled plastic.

I asked him if he has patented the process. He said that the patent office told him that he’d have to submit patent applications for each of his processes. There are so many, he says, he couldn’t afford a patent on each.

“So, how are you going to protect your invention?” I asked him. He may not have to.

“I took the product to labs and scientists and asked them to reverse-engineer what I’d done. They couldn’t do it,” Paul says. His process so radically changes the components of the material that, he says, no one can duplicate it.

So Paul won his division at the Minnesota Cup. Investors are interested. He thinks his siding product alone could take a large chunk of the existing market. It has some unique selling points. It can’t be damaged by hail. Bugs won’t eat it. It just might last forever. It never has to be painted because the color is molded into it. And it is made of material people don’t want anymore.

It is, in short, a winner.

If you would like more information on the competition and how you can get your idea heard, go to www.breakthroughideas.org.