Passion Triumphs at DFJ Contest
Red Herring
May 31, 2007
By Herbert A. Sample
$250K prize goes to idea to replace Third World kerosene lamps with LED lanterns.
Sometimes, saving the world can be lucrative.
Or so hopes Sam Goldman and Ned Tozun, who on Wednesday bested 13 contestants to win $250,000 from the prestigious venture capital firm Draper Fisher Jurvetson for their plan to replace smoky kerosene lamps in developing countries with $12 battery-powered LED lanterns.
On its face, their notion did not appear to promise an overthrow of Google’s Internet dominion, diminish Microsoft’s software prowess, or to otherwise disrupt high-tech’s status quo. But in an age when “clean tech” products are all the rage in the venture capital world, Mr.Goldman and Mr. Tozun’s dream won the hearts and minds of the DFJ judges.
“Your passion, energy and determination to change the Third World and light it up” swayed the day, Tim Draper, DFJ’s founder and managing director, said in announcing the winner.
The annual competition, held down the street from DFJ’s Menlo Park, California, headquarters, was touted as the nation’s largest winner-take-all contest for startups led by university students. It was the third such event DFJ has held for teams that won preliminary contests at California colleges; the firm also recently held similar contests for students on the East Coast and in India.
Fourteen teams competed in Wednesday’s initial round, offering business plans that ranged from the eye-popping to the eye-glazing. A team of University of San Francisco students used recent media reports on food safety to bolster their concept of simple, litmus paper-like swabs that detect the presence of E. coli bacteria on meat and fish. Another offered a website geared toward ethnic food aficionados. Others focused on business-to-business software, home robotics, low-power electronic switches—even an all-natural fertilizer made from algae that collects at waste treatment plants.
The intent behind the contests, DFJ officials admitted, was not just to assist starving college students who happen to have dreamed up great ideas. The contests also give the firm a way to spot young talent with striking ideas before rivals do so at a time when venture capital and private equity money is flooding the market.
“It’s one spot to really champion early-stage start-ups, which is what we do, and that gives us good brand presence across a lot of these universities,” Raj Atluru, a DFJ managing director and a competition judge, said in an interview.
Win or lose, Wednesday presented a chance for the teams to gain significant face time with one of Sand Hill Road’s most influential VC firms. “This is Draper. Enough said!” laughed Barbara Domingo, a leader of BioFresh, the team behind the E. coli swab.
A couple of competitors used humor as part of their presentations, which to the judges may have been entertaining but not necessarily persuasive. The elements Mr. Draper said he looks for are the technology, the business model, and the size of the market. But there is one intangible, he says—passion.
“If it’s a personal thing, the entrepreneur will never let go of it,” said Mr. Draper, who noted that many entrepreneurs during the dot-com boom were simply looking for a financial killing. Passion demonstrates “that these guys are really dedicated to what they are doing, and they’ll stick it out through thick and thin, and that’s where all the great entrepreneurs are made.
Mr. Goldman and Mr. Tozun, whose company is called d.lightdesign, certainly have zeal. Both spent several years in Pakistan, India, and several other countries where most of the population have no regular supply of electricity and instead rely on kerosene lamps. They spiced up their presentations by lighting a lamp, which emitted wisps of smoke, and with pictures of people they lived with in South Asia who loved their prototype.
Mr. Goldman and Mr. Tozun also didn’t ignore hard-headed business calculations. For example, the pair demonstrated how their lantern could generate revenue from consumer sales and international carbon credit trading markets. Still, what may have touched he judges’ hearts was Mr. Goldman’s resolute objection to selling their product in the U.S. to improve d.ligthdesign’s sales outlook.
“It’s an atrocity that in 2007, one-fourth of the world is still living with a kerosene lantern,” Mr. Goldman explained later. While they could produce a product for U.S. consumers, he added, “That doesn’t really motivate me and that’s not going to motivate the cutting edge employees that we’re going to hire in the next year either.”
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