The Next $1 Billion Business Idea?
Posted by: Olga Kharif on October 14, 2008
Today, my colleague Rachael King is guest-blogging here. Check out her entry:
Anna Gossen, a graduate student in Germany, has plenty of cause for celebration, but it has nothing to do with the Oct. 13 global rally in stocks. Cisco Systems just selected Gossen and her team as the winners of the I-Prize contest and a $250,000 award. Cisco began the I-Prize contest last fall as a way to find its next potential $1 billion business idea. Cisco received about 1,100 ideas that poured in from contestants in 104 countries on six continents.
Gossen’s idea is a new system that will let Cisco enter the so-called “smart power grid” market, which involves the modernization of the electrical grid using digital technologies. The system uses hardware and software that will go in businesses and homes to help control energy consumption so that utilities can better forecast customer demand and even prevent blackouts. Gossen developed the idea with her husband Niels Gossen, also a computer science graduate student, and her brother Sergey Bessonnitsyn, a systems engineer in Russia.
The main idea, she says, is that every electric device such as a stereo or dishwasher would make a request for the energy it needs to operate before it starts working. This would let utilities control the energy consumption of businesses and homes at peak energy times, say on hot summer afternoons. This request and approval process is not unlike the algorithms that Cisco routers use to shepherd data across the Internet. “In many cases, people use routers and switches to implement part of the [control infrastructure for electric grids] today,” says Guido Jouret, chief technology officer for Cisco’s emerging technologies group.
Cisco initially had said it would pick the winner of the I-Prize competition in June but that announcement was delayed more than 3 months as Jouret and his group waited to present the winning idea to higher-ups at Cisco. The wait was agonizing for some of the competitors who had spent a considerable amount of time developing business plans.
Even though there was only one winner, some contestants are planning to go on to create their businesses anyway. Cisco only claims rights to the winning idea, not any of the others so contestants are free to build them into businesses. Doug Karr and his teammate Bill Dawson are working to get funding for their new company, Koi Systems. The goal of Koi Systems is to sell software as a service for restaurant touch-screen cash registers, known as point-of-sale systems. “The feedback and experience that Cisco provided us was critical to us reviewing our business plans,” says Karr.
For its part, Cisco says the company got more out of the competition than just a great business idea. Says Jouret: “It encouraged us to think big.”