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Meet Joe Wallace: Man of Many Hats

A comprehensive look at the people and companies that make up the iHub partners

Joe Wallace likes to shoot the breeze, and it’s usually from under the brim of a hat. “I probably own 50 hats,’’ Wallace admits with a Southern accent that’s a cross between Hoosier country and his ole’ Kentucky home of Sturgis. “I like hats. People give me hats. I’ve got a Panama hat, a beret. I’ve got sports team hats. Straw hats. I have a Fedora, too. I mean, the hat as a fashion accessory is pretty much history, isn’t it?”

But don’t let the jovial conversation, creative musing, and casual stride fool you. Wallace can be all business, too. You won’t catch him wearing a hat in the board room, a business meeting, or the company conference room during working hours as managing director of Coachella Valley’s iHub for Renewable Energy. The hatless Wallace calls it a sign of respect. “Hell,” he says with a light-hearted snap. “I’m not Abraham Lincoln.”

Wallace is a Stanford-groomed, guitar playing adventurist who took a technology company from his bedroom to NASDAQ in the 1990’s and helped 30 start-up ventures in Evansville, Indiana, before he arrived at the Palm Springs based iHub in January 2012. He is the perfect example of the working man’s success story: the son of a school principal who chipped out enough money working in the coal mines as a teen to work his way through a Master’s Degree in Mechanical Engineering from Stanford University.

On his road to Palm Springs, Wallace wore many corporate hats and developed a resume worthy of respect: he founded various successful tech companies; he helped companies like Zygo grow from a common stock price of $2.33 to $40 per share and HomePros (a subsidiary of Hadannah Corp.) grow to yearly net margins of 25%; he was Chief Executive of Innovation Pointe in Indiana, a new business incubator; he was President and Chief Executive of GAGE, the Growth Alliance of Greater Evansville, the city’s economic development arm; and he secured ownership of the term “Living Outside the Box.”

When asked what brought him back to California, Wallace says,
What good is there to Thinking Outside of the Box if one does not have the courage to Live Outside of the Box? When it comes to Living Outside of the Box in the field of renewable energy, California’s Coachella Valley is the best place in America to be. When the opportunity to lead the CViHub came my way, I saw it as a great way to make a profound positive impact on a region and a family of technologies in the last stages of my long and varied career. To get ahead, you have to stay mobile. I like changing hats.

Aurora Energy Systems

Lenny Caprino is often seen tooling around Palm Springs in a golf cart. But the “Life is Good” image that describes Palm Springs is not what drives Caprino to wake up at the crack of dawn. He’s behind the wheel of Aurora Energy Systems, a true start-up venture in the area of energy storage.

Founded by a team of successful entrepreneurs, Aurora has produced the NRG Smart Eco-Cell, which stores renewable energy instantly and eliminates one of the barriers to mass acceptance of battery electric vehicles (BEV’s) toxic inefficiency plaguing electric utility vehicles like golf carts.

Pop the lid on Aurora’s souped-up 1987 Yamaha cart, and Caprino’s latched onto a generation of e-cart believers. Nestled under the padded seat is a light weight, eco-cell storage system that looks like two shiny six-packs bearing the NRG logo. “I call it ‘Red Bull’ in a can,’’ Caprino says with a grin.

It could revolutionize golf cart sales, as the battery never has to be replaced. Taken a step further, Aurora co-founder Vincent Palmieri is confident the NRG super capacitor system will replace or compliment conventional batteries, and it can be expanded for off-grid commercial and industrial applications.

One applied use for the NRG system may be indoor and outdoor LED light kits that could be marketed through world-wide electrical distribution agreements. The non-toxic, copper-free, and lead-free system would charge instantly, making existing solar and wind technologies work 100 times more efficiently.

COACHELLA VALLEY iHub:Virtual Reality

In addition to the resident start-up companies,
the CViHub assists 4 virtual incubator ventures:

Attune RTD

Trading stock under the ticker, AURT, Attune RTD was admitted after the Palm Springs company was nearly wooed from Palm Springs to Texas. CVEP turned the tide to retain Attune and assist with its plan to grow a staff of 5 to 50 by 2017.

Attune executives Thomas Bianco and Shawn Davis say the BrioWave, an energy management circuit device controlling large electrical loads, will soon be released to monitor and manage pool pump operations through the Internet. Available locally, it can optimize energy use by as much as 60%.

“We have a local vendor we’re working with,’’ Bianco said. “We’re at the point where we’ll be rolling out the technology. We hope to sell 500 units over the next 90 days.”

What Wallace Thinks: It didn’t make business sense for them to go to Texas. It was only the incentives offered that had Attune considering a move in the first place. The Coachella Valley is a fertile place to sell an energy management solution to swimming pool owners; West Texas is not.

Futurity Cloud Services, LLC:

Futurity is an enabling business to the renewable energy industry in the field of cloud computing. In many ways, it acts as “Google apps reseller,” helping companies use Google’s cloud computing services and products, in lieu of their own company server.

What Wallace Thinks: Futurity’s main office is in San Diego, and it’s looking to expand. Though it is outside the energy realm, cloud computing and access to Google gives us the ability to reduce the carbon footprint of iHub and other businesses in the Coachella Valley.

Indy Power Systems:

Led by Steve Tolen, Indy Power Systems (IPS) is in the energy management and storage business. Currently based in Noblesville, IN, it is developing an “energy blending” technology to store energy for commercial customers at off-peak times, thereby lowering electricity rates. So far, IPS has been asked to submit a storage system RFP to a solar manufacturer. It is delivering a prototype for battery recycling to another client. A 50-kilowatt system is in operation, and the company is developing a peak shaving system.“We believe we have the best product for a company that has a need for energy storage and management,’’ Tolen said. “To us, energy storage is a matter of resource allocation.”

What Wallace Thinks: IPS has revenue and has found rapid acceptance from companies with peak energy charges. Its products, one being a multiflex energy router, are patent-protected. IPS has raised $1.5 million in private capital, mostly in Indiana, and it has a backlog of orders. The company is on the cusp of going from potential to serious profitability with significant revenue.

W2 Energy:

Operating primarily out of Santa Barbara, W2 Energy has patented technology to harvest wind and water energy in a non-traditional way. Gene Kelley, founder and CEO, says the WindWing he invented may look like a stacked biplane, but it can extract 40 to 60% of available wind. It’s more efficient than conventional wind turbines and can be installed and managed at half the cost.

The WaterWing, similar in design, extracts energy from water with predictable, consistent rates. Water is 800 times denser than air, and its flow is gravity fed, making this a viable energy production alternative.

What Wallace Thinks: It’s a novel device an alternative windmill that doesn’t spin. W2 has prototypes in Ventura County and in Hawaii, and is seeing a way to move one to the San Gorgonio Pass for real world testing. The iHub is helping Kelley find a partner who can bring industry knowledge to the table and can get W2 product into real-world operating conditions. Intuitively, W2 has the potential to be as big as any other major wind energy supplier.

“The system we’ve designed is as critical to electric storage as a hard disc drive can be to your computer,’’ Caprino attests, and adds that Aurora Energy Systems is on a roll: “We set a goal to hit the $500 million mark in annual sales by our fifth year.” This is a company that may be poised to do just that.

What Wallace Thinks:

Novelty: It could be an ideal application for off-grid municipal light poles or billboards. To use solar energy at night, you have to store it somewhere. A super capacitor can do that job.
Potential for Success: The entrepreneurs have a solid track record, and believe in this product so much they’ll get into a fist-fight with you if you tell them it’s no good. These guys are on fire for this device.
Hurdles: The massive installed base of battery storage in the golf carts; and the fixed price contracts that municipalities have for light poles.

Divvali, USA Division

Where there’s light at the CViHub, there’s Lisa Olson. As general manager of the USA division of Montreal-based Divvali LED lighting and design, Olson says she has never second-guessed the decision to pick the CViHub for the company’s first base of operation in the states. “I was sold the first day I took the tour,’’ Olson says.

Divvali had given Olson the green-energy light to locate anywhere in the United States. After scoping out San Diego, Houston, Las Vegas, Boca Raton, Chicago, and Portland, Olson chose the iHub for reasons beyond its hospitable spirit: The valley’s warm desert clime, near year-round need to keep cool, and higher-than-average electricity rates. Besides lasting anywhere from 25,000 to 50,000 hours longer than incandescent or concentrated florescent bulbs, LEDs create less heat. For example, a 6-watt LED is equivalent to a 60-watt light bulb. “I knew I could show that LED lighting is not only the green-thing to do; it can save consumers and businesses money over the long-haul.”

Since Divvali moved into the iHub, Olson said the USA division has had managed growth. Attention has been largely focused on assessments for restaurants, banks, commercial companies, and light industry. “I’m finding that selling through distributors is working well.”

However, “LED lighting systems require a lot of education right now,’’ Olson explains. “People are still getting used to the idea—LED is still out of their paradigm, so training is important.”

What Wallace Thinks:

Novelty: Divvali USA is a solutions provider to use LED lighting to save energy.

Potential for Success: LED lighting generates less heat and costs less to operate. It’s a step-forward in a lighting solution.

Hurdles: The only thing to prevent the USA base of Divvali from succeeding is the company itself.
company itself.

Electric Vehicle Enterprises

Forty nine years have gone by since Ben Lizardi worked on the “Twenty Mule Team” commercial for U.S. Borax as an art director for the Los Angeles marketing giant McCann Erickson Advertising.

Products and mode of travel have dramatically changed since then, but Lizardi’s tendency to promote a product he believes in hasn’t.

Enter, EVE: a Coachella Valley iHub based company set up to recycle 3,000 pounds of steel, plastic, and glass in one fell-swoop into an all-electric EV Cruiser. The company, led by its president Bill Schlanger, has the capability of converting almost any car, pickup truck, or Land Rover to vehicles propelled by a lithium-ion battery: No engine noise. No tuneups. No gunk.

The journey of Lizardi and Schlanger to EVE is one large zero-emission step from the days when the spirit of America was fueled by the power of a 20-mule team.

The company’s converted PT Cruiser is greener than a Nissan Leaf. Converting vehicles, as opposed to building them from scratch, also costs less. The circa2004 PT Cruiser that EVE rolled out as its model sells for about $25,000—a little more than half the price of a Toyota RAV4, with the added bonus of a smaller carbon footprint.

Unlike the new hybrids or EV-cars that roll off the assembly line with newly made plastic and steel, EVE gives new meaning to the word “sustainable” through its innovative modifications to existing vehicle bodies. Further, as Schlanger explains, “We have a solid business plan.” Vice president Lizardi agrees, adding that “We welcome drive-ups.”

EVE’s free office at the CViHub has provided a cozy spot to develop a top notch website and marketing materials, and establish key relationships like with Malcolm Gochioco from All Custom Golf Cars, which provided EVE with a temporary spot for vehicle conversions. EVE’s currently eyeing a locale within the iHub area for full-scale production.

But it’s not relying on retrofits, alone. EVE’s been set up to sell batteries, a charging station that Schlanger designed, and other proprietary products available through its website. “We’re making money on the components,’’ Lizardi explains, and creating a niche market for do-it-yourselfers. Lizardi should know, as he was one himself.

“I’d been retired, but I have this tendency to help people—especially if they set out to do something entrepreneurial,’’ Lizardi explains. “When my son-in-law acquired an auto detail shop in Sierra Madre that got caught in the economic downturn of 2007, a game-plan was formulated to get into the electric car business. I was patched in.”

Lizardi invested $75,000 to produce a prototype. “Then I was motivated,” he recalls. “I’m out to reclaim that money, and I thought we were off-and-running until we took the car out for a drive.

The motor had so much torque it tore away from the body of the car. We tried lead-acid batteries next, but they were so heavy it added 600 pounds to the weight of the car, which ruined the suspension. The best we could do back then was
25 miles on one charge.”

Soon after, Lizardi met Schlanger, who attented UC Riverside, has an electrical engineering background, and a Flagstaff-based company called Electric Blue Motors. The entities merged. A battery switch to lithium-ion was made. Together, the company picked the PT Cruiser and Palm Springs to make its premier. “We know there’s a market here,’’ Lizardi said, “the future is electric.”

What Wallace Thinks:

Novelty: I drove the PT Cruiser around and it sounded like a car; it felt like a car. This business model for electric vehicles could give the e-car industry a reputation all good.
Potential for Success: They’ve had their nose to the grindstone. They’ve got the technical as well as the marketing capability. Because they’re not planning to go head-to-head with Toyota, this could grow to be a $20 million to $30 million company.

Hurdles: To do this and be successful, EVE has to build their cars for substantially less money than they can sell them for. Car insurance for the buyer is tricky, too. The market may be receptive; and it may not. But this is a company that doesn’t have to have a runaway success to be a financial success. It could very well be our first iHub graduate.

TILLING THE FIELDS: Mobile Farming Systems

While most families were stoking up the barbecue to observe Memorial Day, Richard O’Connor, CEO of Mobile Farming Systems, was on a road trip to Salt Lake City to collect the prototype for a patio-sized system to grow hydroponic vegetables with nutrient-pack seedlings. It could be to the home garden industry what Gevalia is to coffee.

Armed with the system now going under the name of “VegBuddy,” O’Connor and his team of investors hope to be producing an infomercial with actress Denise Du Barry Hay and her direct marketing firm, Kaswit Inc., by the fall.

Earlier in his career, O’Connor took Rawlings Golf public in 1992, and in 2002 was one of four to start a venture that became Mail.com (the e-mail portion of the business was sold to Germany’s United Internet Group in a deal reported to be in the $50 to $100 million range). He is sold on the VegBuddy concept because of the ease with which a full system of vegetables, fruit, flowers, and herbs can grow.

The hydroponic system is designed much like a terra-cotta herb pot. Nutrient packs and seeds supplied in individual coffee-sized containers are set in the receptacles for speedy, controlled growth. The VegBuddy is also designed with affordability in mind—an important factor in today’s economy.

Mobile Farming signed a deal months ago with Los Angeles-based Phototron Holdings Inc., an R&D graduate of the University of Arizona’s Controlled Environment Agriculture Center that was featured on the Martha Stewart show for its acumen in grow system technology, to develop prototypes for the VegBuddy nutrient packs.

Besides the VegBuddy, Mobile Farming is ramping up to sell mobile shipping containers, pods or bumper-pull type box trailers to produce an acre of food, regardless of climate. A computer system regulates the water, pH levels, light, and temperature. Amy Cooper, vice president of business development sees hydroponic farming applications for government, business and private entities at disaster sites, military sites, schools, or commercial growing centers.

A New Jersey and Palm Springs-based investor, Hershey Spitz, is eyeing the enclosed trailers, as well, to determine if the units can grow kosher produce. If Mobile Farming meets the test, Spitz sees numerous spots in New York City where the 32-foot-long, self-contained box units could be parked to grow and sell kosher produce. “We haven’t eaten a kosher strawberry in Brooklyn for years,’’ he says.

What Wallace Thinks

Novelty: The premise to supply people with the solution to grow better food whether through the ‘VegBuddy’ or a trailer that can grow an acre of food is sound.

Potential for Success: It’s an action oriented business and one bombarded with opportunity. If they can get the flock of ducks to fly together, they’ll have a family of products and success.

Hurdles: This is a company with potential to hit a home run, along with a single, double – maybe even a foul ball. But if it wants to succeed, it’s got to weed out distractions.

SIZING UP EARTHQUAKES: Seismic Warning Systems

To Scott Nebenzahl, Vice President of sales for Seismic Warning Systems (SWS), the earthquake reports filtering in from around the globe are constant reminders of his company’s priceless net worth. “We’re in the business of saving lives,’’ he affirms.

The Scotts Valley based company was among the first to put its calling-card in the Coachella Valley iHub in November 2011. Ever since, SWS says it has had measured gains in exposure from the San Fernando and Imperial Valleys to the Fujian province of China.

The immediate mission of SWS is to deploy patent-protected P-wave technology called QuakeGuard throughout the Coachella Valley to equip over 120 sites, primarily public schools, with the nation’s first regionally based earthquake warning system.

So far, the company has more than 16 locations, including five fire stations in Palm Springs and two Sun Line transits, which are outfitted with the QuakeGuard system. Since 2000, it has set detectors along fault lines in 45 California locations.

SWS plans to use the Coachella Valley as the showcase to launch itself into a billion dollar emerging market. Led by George Dickson III, SWS plans to sell subscriptions to a proven technology connecting businesses hotels, schools, government offices, and private ventures to technology to provide clients with an advance warning of 10 to 60 seconds of a potentially destructive earthquake.

The company hopes to have 85 clients signed in the first year and 325 after three years; they would be served by a system that is hard-wired to two main data centers, one in the San Francisco Bay Area and one in Los Angeles, as well as several regional data centers.

The world is starting to notice. For example, SWS received favorable press at the China Public Security Expo in October. In May, company representatives flew to China to meet with the Fujian Earthquake Authority on a provincial-wide earthquake system. To Nebenzhal, it was a company milestone. “They were impressed with the technology, devices, and our subject matter expertise.”

What Wallace Thinks:

Novelty: This is the only American company I know of that’s offering a solution for an early warning of a potentially deadly earthquake.

Potential for Success: It fills a need all the way up the California coast and in earthquake zones. Japan and China were early adopters of this technology; it’s paid off in several situations there.

Hurdles: To make this work, SWS needs to install sensors along the fault line. That takes money. One way is to go to venture capitalists; the other, is to get orders. We’ve helped SWS put together a plan to pair Coachella Valley schools with business sponsors. If the schools get on line, it will be well on its way to creating that regional model.