Wharton professor Karl Ulrich is a wonderful role model for innovators, not only inventing but constantly tinkering with everything in his life to find new and better ways to do things. He invented an adult scooter called the Xootr. He designed his own personal 'Kyoto Protocol' to make sure he invested at least as much in renewable energy as would offset the driving of his pickup truck, and then he decided to assign innovation to his students:
Link: Getting Credit for a Novel Approach to Offsetting Auto Emissions - Knowledge@Wharton.
Ulrich suspected other people might be willing to pay to offset their auto emissions but realized that most of them wouldn't take the trouble that he did. The key, he knew, was making it easy. Enter TerraPass. Ulrich figured that the company could sell memberships -- the price would be based on the amount people drove -- and then invest its revenues in clean power and pollution reduction. Ulrich didn't have time to work out the details himself... [so] he decided to turn the challenge over to the 41 students in his "Problem Solving, Design and System Improvement" class this past fall. In October, when the half-semester class began, he presented the idea and announced that the students' assignment for the semester was turning it into a business.
Tom Arnold, a second-year MBA student in the class, remembers surprise sweeping through the room. "It was the initial shock of, 'We are not actually going to launch a business in six weeks,'" he says.
On November 23, 2004, TerraPass, incorporated as BenVen LLC, began selling annual memberships. Customers pay $30 to $80 a year, based on how much carbon dioxide their cars emit during 12 months. Owners of gas-electric hybrids pay the least; owners of SUVs and trucks, the most. "We really forced the launch, and it wasn't pretty, but we came out, had a test and got some nibbles," Arnold recalls. By the time the students made their final class presentation on December 9, they had sold 149 memberships, mostly to friends and family members.
Many class projects would have been declared a success at this point and the project would then have been dropped. Some of Ulrich's students, however, decided to continue developing TerraPass. This spring, a group of nine, with Arnold as coordinator, is pushing ahead on the company. By early February, the students had sold about 300 memberships and were aiming to raise money from investors.