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Local Motors Wins Pitch for Change Competition

If you had 30-seconds to make your “elevator pitch,” could you sell someone on your business? How about if you had a little bit longer-2 minutes and 2 slides? That’s what this year’s contestants were up against in the Pitch for Change competition. The goal was to identify business opportunities, both non-profit and for-profit, with the potential for social impact. Contestants were evaluated by three judges, including Jay Coen, Gilbert of Investor’s Circle and co-founder of B lab, Seth Bindernagel of the Mozilla Foundation, and Daniel Weiss from Microfinance International. The criteria included the “level of innovation, magnitude of impact, viability of concept, and overall persuasiveness of the presentation.” There were 70 initial entrants, narrowed down to 24 to make the thirty-second pitch, 7 to make the two-minute pitch, and finally 3 top prizes ($2000 for 1st, $1000 for 2nd, and $500 for 3rd). Local Motors received the top honor.

The idea behind Local Motors is to replace the current auto model (big factory/high volume, limited choice, an outdated dealership model and poor service) with community design, small local assembly, direct sales, and great customer service. The design impacts society by reducing reliance on fuel, not by changing the power source, but by creating a lightweight design that will dramatically improve fuel efficiency. As new green technologies become available, Local Motors will have a competitive advantage through its small flexible manufacturing, to be the first company to incorporate the new technologies. The end goal is for consistently newer, safer, more exciting and efficient cars bought and serviced with a locally tailored experience-in short, a new breed of auto manufacturer with an unprecedented relationship to its customers.

Jay Rogers and Jeff Jones, the team behind Local Motors, officially started the project last fall when they initiated a field study project together. However, they actually met the first week of the RC year and germinated the idea. They knew they wanted to focus on the automotive space, given Jay’s passion for the industry and Jeff’s decade of experience in the Motor City.

When asked why he took on such a huge challenge, Jay Rogers said, “We do not see it that way. We believe that for 100 years, entrepreneurs have avoided innovating in the automotive space precisely because they thought about it as ‘such a huge challenge’. For Local Motors, this project is fun, meaningful, and enjoyable at every small step of the way. If we prepare well enough and keep our eyes on the intermediate goals, someday we will wake up having revolutionized the industry.”

They developed their unique business model as they conducted intense industry research, visiting over 15 manufacturers through research trips from the east to west coasts. The vast resources at HBS have been a great help, including professor feedback, contact generation, brainstorming with classmates, and social enterprise grants. They’ve implemented discovery driven planning, learning throughout the process, and tweaked their plans as they gathered new information. The result has been a strong go-to-market plan which has already begun, but which will be implemented officially upon graduation.

Jeff Jones described why he got involved, “I gravitated toward the project because of the opportunity to make a difference, in society and for the environment. It’s a big undertaking to start a new car company, but we have a unique offering and we’ve seen that low-volume manufacturing can be done profitably.”

Runner up in the competition was Joel Segre with SURx. SURx would help combat counterfeit pharmaceuticals by providing a numerical code on legitimate products that could be validated via a phone call or text message. According to the WHO, 70% of the pharmaceuticals sold in Angola are counterfeit, which may result in death or more drug resistant strains of disease when both real and counterfeit medicines are mixed. Other parts of the developing world have similar statistics. With SURx, a text message of the serial number can be sent to the service and a verification message will be returned indicating the legitimacy of the drug, the correct dosage, and the manufacturer. The business model would not depend on donations. Instead, it would be paid for by pharmaceutical manufacturers wishing to protect brand equity from counterfeit attack, and track product sales around the world.

Joel explains, “The SURx idea came out during my summer internship search. When I learned about the growing problem of counterfeit across Africa, I was both terrified and hooked. Could there be a profitable business that solved this need? Since first thinking about mobile phones as a potential solution, I have teamed up with a group of HBS and HPSH students to think about the project in greater detail through Professor Chu’s field study called Project Antares. If all goes well, I would not rule out the possibility of running a pilot study this summer to test the concept.”

Matt Scherrer placed third in the competition with Beyond Orders. The website (www.beyondorders.org) gathers requests from soldiers abroad who identify local needs and connects them with donors who send them the requested supplies. For example, a soldier may notice that local children are in desperate need of school supplies and enter a request for pencils, paper, and crayons on BeyondOrders.org. Stateside donors may browse the website, and decide this is the request they would like to fill. They make the commitment online and ship the items directly to the soldier, who delivers the items to the children. In this way, donors are able to make choices about their desired contribution and see the impact they have made through the online interface. It is much more meaningful than just sending a check and offers more efficient delivery compared to other non-profits helping in this area. “We are thrilled with the recognition. The cash prize is going directly to our budget and will help us to migrate to a more powerful server.”

The four others in the top seven included Rob Keel with Organic School Lunch Catering (to provide healthier meal options to K-12 schools), Brendan Luecke with Drive Green (a program for individuals and businesses to offset their carbon usage to affect climate change), Britany Martin with Ebility (a website to connect people and resources for those with disabilities), and Shaun Young with Vida Health (a lower-cost, higher-quality program to treat people with chronic medical conditions).

As always, these events are made possible by the students and professors that work so hard to organize them. Thank you Shireen Santosham and the other students who helped coordinate the event, Professor Michael Norton for serving as Moderator and Dutch Leonard for serving as Faculty Advisor.

Congratulations to all of the Pitch for Change participants for dreaming up ways to make the world a better place and for taking action!

March 26, 2007
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