June 14, 2018
When Scott Massey’s dreams of a tropical internship dried up in the Texas dust, a bigger dream materialized. The Evansville native and Ivan Ball of Owensville founded Heliponix to tackle the challenge of global food insecurity through their GroPod appliance. The problem, as Massey explains it, is this: “We already allocate 50 percent of American land use and 80 percent of our freshwater consumption to agriculture, but the United Nations is predicting we need to increase global food outputs by 70 percent by 2050 to avoid a global food crisis.”
To help them go after their idea, they pursued funding through the Elevate Purdue Foundry Fund. Heliponix received an Elevate-funded $20,000 Black Award in 2017 and an $80,000 Gold Award in May 2018.
Massey’s telling of how the two-man Southwest Indiana team uncovered the root of the problem, developed a marketable solution, and are gaining financial momentum and credibility is an entrepreneurial story many founders will relate to and can learn from.
Tell me your business story so far. How did you get where you are with Heliponix?
I was introduced to CEA (controlled environmental agriculture) in 2017 at Purdue University during my junior year as a mechanical engineering student. Ivan Ball and I were working on a NASA-funded research study under Dr. Cary Mitchell. CEA is a hydroponic farming technique that is three times faster and uses 95 percent less water year round than conventional farming. There were still a number of technical hurdles to be overcome for this technology to have a meaningful impact in yields of food production, the largest being the outrageous energy cost. The indoor lighting needs prevented indoor agriculture from being a financially viable enterprise without dependence on government subsidies.
After coming to grips with the unfortunate reality that the technology wasn’t ready for mass adoption, I went to the career fairs at Purdue looking for a summer internship. I thought I had finally gotten my break after receiving an internship offer as a project engineer in Hawaii. Although the location on the contract I signed said “TBD,” I was told the final details of my housing arrangements were being finalized — I was dumb enough to believe that.
I was instead reassigned to renovate Section 8 government housing in El Paso, Texas, along the border to Juarez, Mexico. My primary responsibility was to oversee a Spanish-speaking workforce for labor jobs such as toxic asbestos removal. Many of the workers had previous gang affiliations, and narcotic use was rampant. The section of El Paso I managed was called the Angel’s Triangle, situated between the Franklin Mountains, the US Army’s Fort Bliss, and a border wall to Mexico. This portion of town was originally called the “devil’s triangle” due to the gang activity, narcotics and prostitution.
The city of El Paso is a desert in more ways than one — it’s also a food desert.
Needless to say, I wasn’t thrilled about my reassignment from Hawaii at first, but it was a very enlightening experience that I’m glad I went through. The city of El Paso is a desert in more ways than one — it’s also a food desert. A food desert is where a low-income, inner-city area is so far away from grocery stores with fresh food that the residents resort to fast food for every meal. The result? Higher obesity rates and health complications. I began to ask myself, “Why do food deserts exist?” The simple answer is that low-income areas aren’t profitable places to run a business, such as a grocery store. However, the root reason behind this is much more complex. I began to look into why fresh food was too expensive for these food deserts, and the results were alarming. Farming is very expensive in terms of resource consumption, and it’s the consumer who ends up paying the price.
In the United States, we throw away 40 percent of the produce grown. What’s most alarming is that we’re producing at capacity, but we’re failing to deliver before it perishes because food goes bad over time. I realized that food deserts could be the tip of an iceberg that would only become more common as urban centers grow with the human population.
It was at this moment that I truly became aware of the perpetual cycle of food deserts.
- Residents are placed into government housing in a food desert.
- Residents become obese due to poor food options nearby.
- Residents become more dependent on government funding for medical care for obesity-related health complications.
If the funding existed to purchase these appliances, would it be so crazy to think that an appliance that could grow fresh produce could break this cycle?
The cycle was ironic. We were installing brand new appliances in government housing complexes, and shipping out the functional appliances. If the funding existed to purchase these appliances, would it be so crazy to think that an appliance that could grow fresh produce could break this cycle? What if a recurring revenue business model could be built on subscriptions to seed pods? That’s when my fire was truly lit. I began researching prior art patents, existing products, and meticulously cataloging customer complaints for competing devices on the market to devise a turnkey appliance that grew food with the same level of maintenance as a Keurig coffee machine.
I discovered that there was a flood of cheap novelty devices in the market that served more as decorations than useful products that actually gave the user legitimate yields. Essentially, they were flower pots disguised as “groundbreaking devices” that required users to buy their own lights and HVAC equipment. Additionally, many of these low-quality products — some made of cardboard — had major food safety concerns because of the cheap materials that acted as perfect growing mediums for toxic E. coli or fungi.
This highlighted the importance that the world did not need another decorative flower pot, but instead needed an appliance that serves as an automated, miniature greenhouse. This would be no small undertaking. The knowledge requirement for design for manufacturability, software architecture, electrical engineering, fluid mechanics and industrial design was steep. Although Ivan and I were capital poor when we founded the company, we were rich in ambition and human capital at our disposal at Purdue.
What have been some pivotal moments in the development of Heliponix so far?
We’re competing with the financials of soil and sun farming, so what became the Heliponix GroPod had to be very energy efficient to be cost competitive. In my research, I discovered that vertical farms were the only financially viable method. We needed to be able to place a vertical aeroponic tower inside of a miniature greenhouse, and the tower had to rotate, with plants accessible 360 degrees around it.
I filed multiple utility patents on this concept we affectionately call “rotary aeroponics” (now a trademarked name). During our growth trials, we thought we were miscalculating our growth rates. Our device demonstrated a 300 percent increase in efficiency compared to other factory farms and was 500 times more efficient than conventional soil farming, which is typically limited to one harvest a year. These results that have been repeated time and again.
Our first break occurred when we unexpectedly won our first business plan competition at Ball State University in the fall of 2017. After walking away with a nondilutable $5,000 check, I asked myself, “Why stop?” Ivan and I applied to every business plan competition we could find, and were featured at the Forbes AgTech Summit. To date, we have won under close to $200K in funding from business plan competitions in the form of grants or convertible note investments.
Some figures in the entrepreneurial space looked down at us for not raising a massive investment round. But after solving all technical hurdles, and selling the first GroPods, we’ve proven that this isn’t necessary. I’m a firm believer in bootstrapping a startup until the critical mass has been established. Nondilutive funding mechanisms or convertible debts were a much better strategy for Heliponix. Revenue is truly the cheapest form of capital.
The moment I began eating most of my own food from my GroPod was the inflection point that I realized we would be OK, and we were ready for sales.
However, this wasn’t achieved without extreme commitment and emotional testing to overcome all technical hurdles. The worst problems in a product design are long-term problems that only occur after several months of continual use because you thought it wasn’t a problem anymore. Fortunately, our perseverance paid off by not quitting. The moment I began eating most of my own food from my GroPod was the inflection point that I realized we would be OK, and we were ready for sales.
What do you think the value is of having resources like Elevate in Southwest Indiana?
The primary reason we’ve been able to launch Heliponix without a major investment to date is because of our ability to leverage our network. Eric Steele [Elevate Entrepreneur-in-Residence, Southwest Indiana] has made instrumental introductions to former Whirlpool engineers who possessed an intimate understanding of appliances with fluid control systems, among many other influential business developers. At times in our product development process, we felt lost. While we had the skills to make a physical product, a simple conversation with an individual rich in intellectual capital proved to be incredibly valuable.
The Purdue@WestGate [an economic development accelerator formed by the partnership between WestGate Authority, Naval Surface Warfare Center Crane Division (NSWC Crane), Purdue University and Purdue Research Foundation] location and Innovation Pointe are the two of the most overlooked resources for starting a business to make all of these introductions and find funding mechanisms for new businesses.
Why focus on a problem that seems far in the relative future? Why is it important or interesting to tackle a huge problem like global hunger?
My biggest fear is a life played safe, wondering what could have happened if an opportunity was pursued fully.
Working in Texas was a lower point in my career. I woke up one day and could see my entire career in front of me doing the exact same job until the end of my life. At that moment, I asked myself, “Would I be happy on the day I die with the life I lived in this career?” The answer was no, and I realized I had a unique opportunity to risk failure for the opportunity to change the world for the better. My biggest fear is a life played safe, wondering what could have happened if an opportunity was pursued fully.
The timing couldn’t have been any better for a product that makes consumers self-sufficient for produce production. Droughts and food safety concerns are predicted to become much worse with a growing population expected to reach 9.7 billion in 2050 — an additional 3 billion humans. I was always aware of the daunting task to bring the GroPod to market, but I also knew that the world needed a practical solution to food insecurity, and our persistence would pay off.
Entry into the mainstream agriculture marketplace is daunting. The discussion of food insecurity has become political with polarized sides offering biased data vs. anecdotal evidence. Agriculture (one of the oldest professions) is ripe for disruption, and requires an outsider’s perspective to design an entirely new solution that eliminates the entire supply chain in an industry that is inherently resistant to change.
To put this in perspective, we already allocate 50 percent of American land use and 80 percent of our freshwater consumption to agriculture, but the United Nations is predicting we need to increase global food outputs by 70 percent by 2050 to avoid a global food crisis. The California drought was caused by the sheer volume of water consumption for its massive, growing population. At Heliponix, we see this as an opportunity to thrust mankind into the third generation of agriculture of farming appliances as we begin to hit the guard rails of the human population limit.
Food insecurity is not a future problem. I have personally seen the overwhelming evidence in the food deserts plaguing inner city areas in the USA, and children suffering from extreme malnutrition while working overseas in West Africa to build low-cost hydroponic farms. I strongly encourage anyone skeptical about this to accompany me on my next trip to Africa, or volunteer at a local food pantry. It has been a challenge to convince decision makers in the U.S. that famines are not unique to the developing world, but it is difficult to convince someone to invest in water conservation technologies who has never experienced a drought. A population explosion combined with drought could just as easily put a developed nation into a food insecure state.
Fortunately for us, I don’t need to convince most decision makers of the facts. What we focus on is selling a product to solve food deserts one home at a time as a scalable solution. In the not-so-distant future, we will have scaled to solve an entire city’s food desert with our current business trajectory.