You may have seen Mark Shaw by now. On morning TV. In YouTube videos. At auto events. Explaining his proposed new auto technology in a TED Talks lecture.
Shaw is the guy who dumps mud, chocolate syrup, motor oil and paint onto the hood of a car to demonstrate how his "self-cleaning car paint" lets the mess roll off like it was never there.
In demonstrations worthy of late-night TV spots, Shaw is trying to do the same thing countless entrepreneurs have done since the days of Henry Ford -- get a foot in the door of the rich auto industry.
It can be a struggle for newcomers and unknowns to win business in an industry where suppliers are consolidating into a few, ever-larger corporations with global factory footprints. But one expert says the window of opportunity is now open a bit wider than before.
"A decade ago, there was still clearly a sense of 'not invented here' working against small startups," says Arjun Kakkar, a principal with the Cleveland office of management consulting firm Strategy&. "Today, the big auto companies are realizing that they need innovators from outside, and they're often actively looking for them. So many technologies are changing that those guys just can't do it all themselves.
"Not to mention the cost," he adds. "Why spend the money on r&d when a new venture has already done it for you?"
With automakers and many big suppliers still operating with reduced personnel after the 2008 economic crash, outside innovators may find an interested ear.
David Johnson is banking on that.
An 18-year powertrain program manager with Ford, General Motors and Navistar, Johnson, 47, is now CEO of Achates Power of San Diego. The venture is proposing to license its technology for opposed-piston two-stroke engines to automakers in search of fuel efficiency -- a sales proposal that challenges the core of auto company expertise.
Achates has at least two rivals -- Pinnacle Engines and EcoMotors International, both of which also are marketing opposed-piston engines.
Johnson and Achates are spending $90 million in investment capital. Achates is hiring engineers from Detroit, Europe and Asia; acquiring equipment; testing performance and durability; publishing data in scientific journals; and presenting its findings to the industry.
"It's shocking to auto engineers to be told there is something better than what they have," Johnson says. "In auto engineering, novelty in and of itself is not appreciated. But if you really are offering something like a substantial gain in fuel efficiency -- as Achates is -- they are listening."
Makers of opposed-piston engines claim a fuel efficiency increase of 30 percent or more over other internal combustion engines, although the technology has had emissions problems. Those companies slowly are gaining ground in their efforts to prove their engines' capability and win automaker contracts.
Last year, Achates signed a joint development and licensing agreement with Fairbanks Morse Engine, a Wisconsin business that builds opposed-piston engines. Achates also has a joint contract with AVL Powertrain Engineering to develop the next-generation combat engine for the U.S. Army Tank Automotive Research, Development and Engineering Center in Warren, Mich.
EcoMotors, meanwhile, has signed several agreements for engine plants and development centers in China. Pinnacle Engines has said it is "launching our first products in 2014 with a major Asian vehicle OEM."Racking up business by listening to customers
Advances in infotainment, chemistry, engine management, electronics and materials are moving faster than carmakers' own r&d teams. Last year, automotive patent filings jumped 18 percent globally, according to the World Intellectual Property Organization.
Tech players such as Google and Apple are entering the auto business. SGL Group, a German producer of furnace linings, has begun supplying carbon-fiber body parts to BMW's electric cars.
There also is opportunity in the ashes of the 2007-09 economic crash. Some small firms that experienced financial duress then are still gun-shy about expanding.
That attitude was creating a problem in Alabama, where Mercedes-Benz and its supply chain have been expanding to launch their first U.S. small-car production line this year. Mercedes needed a local company to work closely with its Tuscaloosa-area plant to supply industrial racks. Auto plants use hundreds of specifically engineered portable racks to carry parts to the assembly line, and supply chains need thousands more at their parts plants. The Southern U.S. auto corridor has a painful shortage of rack suppliers.
Enter Mark McClanahan.
The 57-year-old Alabama native spent 20 years working with GM's steering gear operations and managing plants in the United States, Spain and Germany. Recent years found him managing operations in the food services business in Chicago.
But a friend at the Alabama Automotive Manufacturers Association urged him to come home to solve Mercedes' problem.
"I heard there was opportunity back in Alabama," McClanahan says. "And I always believed that if you weren't in the auto business, you were nothing."
After his efforts to bring two different rack suppliers to Alabama from Michigan and Indiana were unsuccessful, he decided last September to simply do it himself.
He talked friends, family members and local venture capitalists into ponying up approximately $1 million in startup capital. He accepted an offer from county officials in Fayette, Ala., to renovate an abandoned T-shirt manufacturing plant into a rack factory. He wowed Mercedes with a pledge to do the menial job that large rack-suppliers rarely are willing to do -- repair broken racks rather than simply deliver new ones. And he hired six workers and welders to do the job.
Last January -- just four months after deciding to plunge -- McClanahan's startup Fayette Fabrication began supplying Mercedes. His first order required him to borrow a truck to deliver his racks. He now has 14 employees, and last month, he retained a five-rep sales company to arrange additional business.
"I can't return all the calls that are coming in," he says. "So, yes -- there's opportunity out there for startup companies. But you have to listen to what it is customers need."Real-time weld inspection gets going on a fast track
Robert Watts is listening keenly as he bids to become a supplier.
Watts, 61, makes his principal living as a financial adviser in Etowah, Tenn., in the foothills of the Great Smoky Mountains near Chattanooga. His second business, Advanced Measurement Systems Inc., supplies laser-inspection tools used by auto collision-repair shops to ensure body alignment.
But a former GM executive recently sparked a new opportunity for Watts.
Jack Sisk, the former supply chain and supplier development manager for GM's now-defunct Saturn Corp., had gone on to work for the University of Tennessee and a state business-development group, the Southern Middle Tennessee Entrepreneur Centers.
Sisk brought Watts into a meeting with an automaker in the region that Watts declines to identify. The automaker wanted to hear about Watts' laser-inspection systems for possible use on vehicle assembly lines by scanning parts to ensure they meet specs.
Watts and the automaker quickly realized that the proposal probably wouldn't work. But the manufacturing executives proposed a second plan.
The automaker was having trouble confirming that body welds were correct. Traditional inspection requires a plant to pull a body off the line and rip the welds apart on a spot-check basis.
The automaker asked: Could Watts' company use its infrared laser systems to inspect welding joints, in real time, as the welds are being made?
Instantaneously inspecting body welds "could be a grand slam home run for us," Watts confides. "It's huge. Of course we can do it."
The secret to Watts' technology is a science he doesn't own. It is based on laser-scanning procedures patented by the Department of Energy's Oak Ridge National Laboratory, not far from Chattanooga. Watts has licensed the technology.
This summer, he incorporated a separate business, Aplair Manufacturing Solutions, to supply the weld-scanning systems. He said he expects to be in operation with it by the end of this year. That timing is being dictated by the automaker's desire to get the technology up and running.
"It's a fast track," Watts marvels. "I went into a meeting about parts inspection. I ended up talking about a new business."
Watts says that he has no clear idea how much additional investment it will cost to get Aplair up and running because Oak Ridge will bear the primary cost of the required software development.
Seventy miles away in Knoxville, Tenn., another entrepreneur is looking at spending about $900,000 to bring another venture to market. The product is an environmentally benign odor neutralizer, developed and launched by Clodico Inc.
The $27 jar of chemicals about the size of a container of lip balm would be placed overnight into a closed used car. By morning, all odors will have been erased, and the jar is thrown away.
The idea was helped along by the commercial laboratory in Virginia that developed the chlorine-based compound. A woman who worked at the lab happened to be the wife of a local used-car dealer.
"Odor is a key issue in the value of a used car," says Clodico CEO Joy Fisher. "Cigarette smell, animal smell and fuel odor can reduce the price of a used car by 10 percent. That's a serious issue for retailers, especially when they deal in big volumes of used cars."
Fisher, the former head of technology commercialization at the University of Tennessee's Center for Entrepreneurship and Innovation, has been beta testing the odor-eater this year at a new-car dealership in North Carolina, a luxury dealership in Nashville, an exotic car store in south Florida and a daily rental chain.
Fisher, 55, has gone without a salary for the past year as the product moved through r&d. Now, she says, customers are asking for the product, investors have committed much of the funding, and a manufacturing plan has been worked out with a third-party plant.
She is awaiting official government safety regulatory approval before launching sales and expects no surprises.
"If it doesn't pass regulations," she says, "then we move on to a Plan B market approach. But this will work."YouTube paint demos open door to Nissan
Paint entrepreneur Mark Shaw, 56, is equally confident -- and equally surprised by the welcome he has received.
"You always hear about how difficult it is to break into the auto industry," Shaw says. "But my company works with the Department of Energy on nuclear waste. I think we have some experience with tough customers."
His company, UltraTech International Inc. in Jacksonville, Fla., proposes to supply its Ultra-Ever Dry paint to automaker factory lines. "We think there is an enormous opportunity," he says.
UltraTech holds 60 technology patents, represents 500 products in different fields and uses a network of 1,800 distributors. Shaw's introduction to automotive has been far from difficult so far.
A marketing manager at Nissan Motor Corp.'s European operations happened to see one of his paint demonstrations on YouTube and invited him to paint a Nissan Leaf for marketing purposes.
Nissan's U.S. operations found out and invited Shaw to come demonstrate the paint. On a hot afternoon in early July, Pierre Loing, Nissan's vice president for product planning in the Americas, for the first time witnessed a chocolate syrup and motor oil demonstration with some of his product planning managers. On the spot, Loing instructed the managers to begin testing the paint for possible use.
"It's not just paint," Shaw points out. "It's a coating, and it can also be used for fabrics." That means a child's grape drink can be spilled onto a tan cloth seat and will slide off without leaving a trace.
"It's a new nano-technology coating," Shaw says. "We're all going to be hearing more and more about nano products in the economy."
But there is a challenge: The coating on the Leaf is as rough as fine sandpaper and gives the car a dull matte finish.
To make Ultra-Ever Dry suitable for production use, Shaw admits, "We have some more work to do."
Still, Shaw has been approached by two other automotive customers about using the coating on truck wheel wells and vehicle glass.
The auto industry represents a big potential new market. But what if Nissan hadn't noticed his YouTube video, he is asked. How would he have gotten in front of potential buyers?
"I have no idea," he admits. "We've never dealt with anybody from automotive before.
"I suppose I would've just called car companies and left all my information with a receptionist and never heard back."