The Kenan-Flagler blog provides a behind-the-scenes look at the UNC Kenan-Flagler MBA program. In the blog post highlighted below, Tristan Handy (MBA ’10) provides an inside look at his work leading a Kenan-Flagler STAR project where he and his team are consulting for a local entrepreneur.
I’m currently leading a STAR project. STAR (Student Teams Achieving Results) is a Kenan-Flagler program that sends student teams on consulting projects for corporations and not-for-profits seeking to strengthen their global competitiveness.
My team is developing a feasibility study for a local entrepreneur. He had a couple of ideas he was kicking around and wanted to figure out if either was worth the investment of his time. One was the manufacturing of a standard set of products using gypsum, a byproduct of coal firing in power plants. This went nowhere; as our team quickly learned, gypsum manufacturing is an established and capital-intensive industry; definitely not the place for a startup.
The other potential idea was biomass pelletization. North Carolina has significant biomass resources and pelletization allows a wide variety of biomass sources, from wood waste to switchgrass, to be dried and transformed into a shape that enables easy transportation and consumption. Pellets are primarily used in heating applications as a fuel for pellet stoves. Unfortunately, pellet stoves are not popular in the southeast; they are present in the northeast and more common in Europe, and the costs to transport the pellets would turn the business opportunity into a volume game. This would again squeeze out the opportunity for a startup.
Enter a process called torrefaction. Torrefaction was new to me and to the team, so we had quite a bit of research to do. What we found was really very interesting. To summarize, torrefaction:
- Is brand new, with only a few firms developing and/or commercializing the technology.
- Reduces biomass weight by 30% while retaining 90% of its energy density.
- Causes biomass to be hydrophobic, significantly improving its storability.
- Allows biomass to be co-fired along with coal in traditional coal-burning power plants, at rates of around 90% coal to 10% biomass.
The implications of the last bullet point are fairly significant from a carbon perspective. The US has over 600 coal-burning power plants, none of which currently utilize this technology. These power plants emit 2,142 million metric tons of CO2 annually. If torrefaction and biomass co-firing were done at every power plant in the US, that would work out to a reduction of 214 million metric tons of CO2 annually, assuming that the biomass feedstocks were grown as part of a closed loop carbon cycle.
No one on my team has any experience in this industry or in a startup environment. When we started down this path we had literally no idea where it would lead us, and two months in we still don’t know what our final conclusions will be. But wow! are we learning a lot. Here’s a quick explanation of how STAR works for any of you who might be considering participating in the future:
- The STAR program office lines up prospective clients on an ongoing basis. Students submit applications in the middle of first semester. The STAR folks look through applications and try to establish a fit between clients and students and try to create teams with well-rounded experience and skills. The percentage of students selected depends on the number of applications received and the number of clients lined up, but this year most of the students who applied were matched with projects.
- Teams are matched with paid advisers who are responsible for meeting with the team on a regular basis and providing guidance. Advisers’ roles are not to lead the team but rather to prod it along in the correct direction. My team was lucky enough to get paired up with a very good adviser.
- The project itself is run like a consulting engagement. There is an engagement letter that defines to scope of work, regular status meetings, deliverables…everything that you’d expect. In this way, it’s great training for individuals looking to move into consulting from another field.
- There is a weekly STAR class that teaches consulting skills and provides a forum for teams to share ideas and talk through issues with one another.
- Teams meet internally at least once a week and typically more often. Frequent communication is critical because with all of the other things that each of us have going on, it’s easy to let time slip by without realizing it.
- There are four official client meetings but teams are free to meet with clients more often. At the fourth meeting, results of the team’s analysis are presented to the client and all deliverables are turned over.
All in all, I’ve truly enjoyed my STAR experience so far. It’s also looked great on my resume to have experience in the renewable energy industry since I’m trying to change careers into that field; many students find the program valuable for the same reason. A word of warning however: STAR is not for the faint of heart. It’s real work, and your performance has real consequences for real businesses. Plan to commit a significant number of hours every week if you apply.