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Universities, public funding and business – a match made in heaven?
Finding funding and getting your business started is not easy for a small start-up company. Add to that the complexity of trying to find a safer alternative to traditional chromium plating and you see the scale of the challenge. We spoke with the Chief Executive Officer (CEO) of a Finnish start-up company Savroc, to find out what it takes to turn a promising green technology idea into a reality.
To reduce the toxic hexavalent chrome used in decorative and functional coating processes, Savroc has developed an alternative multilayer coating method using trivalent chrome-based chemicals. Since the hexavalent chrome is carcinogenic for people who are exposed to it in their work and it is polluting the environment, finding a safer alternative would bring societal benefits.
|Osmo Jahkola. |
According to Osmo Jahkola, the CEO of Savroc, it has been possible to use the trivalent chrome as an alternative for decorative coatings for some time now, but for functional coatings where corrosion and wear resistance is needed, trivalent chrome has not had the necessary technical performance. He says that although Savroc’s innovation cannot replace the use of hexavalent chrome completely, it could be used as an alternative in many industry processes.
Research done at the university
Collaboration with universities and academia is often a way of innovating safer alternatives. Savroc is a good example of that, since the company itself and their alternative technology, would not exist without the Savonia University for Applied Sciences.
The founders of Savroc, Juha Miettinen and Jussi Räisä, were employed by the university as researchers and teachers on material technology until they founded the spin-off company Savroc in 2012. Their work with trivalent chrome-based platings and coatings started already in 2008. “Of course it is possible to invent something by accident, but in most cases, a lot of time and hard work is needed. For our technology, the time consuming research was done at the university,” Mr Jahkola explains.
It was the university environment and mind set that made the innovation possible. The research allowed them to study the issue in a wider perspective, perform many tests and learn from the mistakes during the process. “As an SME or a start-up company, you do not usually have the luxury of making mistakes and learning from them – you are lacking time and financial resources for that. However, having the freedom to fail, brings you closer to the right solution,” Mr Jahkola says.
The university’s network of experts and high-quality premises also played an important role. “The university can provide you with very expensive equipment that a start-up company could not afford to buy. We would have never come up with this solution if the researchers could not have used the university’s facilities before Savroc was founded,” Mr Jahkola adds.
Developing new products and processes is very time consuming. For a small company, this means having the necessary financing in place so that you can focus on the operational work. “You have to map and monitor the different funding programmes but also contact suitable companies and people who can support you,” Mr Jahkola points out. A good starting point when looking for financing are the national agencies that support innovation. “For us, it has been very important to get funding from the Finnish Funding Agency for Innovation (Tekes). Without them, there would be no Savroc today,” Mr Jahkola says. Direct funding and research and development loans received from Tekes allowed Savroc to continue the process development even though they have not had regular income yet.
The European Union also has several funding programmes for SMEs and for companies working on research and innovation. Savroc has been interested in applying for EU funding but, so far, they have not had the resources. “We have understood that it is difficult to get EU funding and you would need to have one person working full time on the application. For us, this has not been possible. We have had our hands full with the operational work and it is very uncertain if the time put into the application would pay off,” Mr Jahkola says. However, applying for EU funding in the future is still something Savroc sees as a possible option.
Find private investors
When it comes to finding private investors, Mr Jahkola emphasises that companies need to be active. However, he points out that it is not only about finding someone who is willing to invest money in you, it is also important to find the right kind of investors who can contribute to the success of the company. “If you only have a few people working for the company, you are all the time lacking expertise or knowledge. You really want to have a Board that has a wide range of expertise from different fields.”
Mr Jahkola encourages small company owners’ to attend seminars and events where they can meet future investors. It is important to get the news out and make investors aware of the new product or technology that you have developed.
The most important thing to keep in mind when meeting possible investors is to be well prepared. The first question they will ask is to see your business strategy and plan. “If you are not capable of doing a proper business plan yourself, you need to use an expert. You need to have good tools when you meet investors. If they understand that you don’t have a proper strategy and plan, you are wasting everybody’s time,” Mr Jahkola says.
However, the bottom line is that your product or technology must be good enough to get the investors’ interest. There are many requirements for new solutions and they are not easy to fulfil. “Your innovation should be cheaper than the existing solution, better when it comes to technical performance and it must be environmentally friendly and safe. It sounds tough, but these are the rules of the game.” At the same time, green technology is something that investors are very keen to see today. Therefore, if your innovation is safer for people and the environment, you have a very good chance of attracting investors’ interest in it.
The other key client that small companies need to convince are the customers – particularly the big companies and important players in the market. Many think that if big companies in the same business have not been able to bring a greener alternative to the market, then how can a small company do it? “To solve the problem, you need to let prospective customers test your solution for themselves. This takes a lot of time, but you have to give customers the chance to test it out and show that your innovation really works for their needs,” Mr Jahkola explains.
Stricter regulation could promote alternatives
According to Mr Jahkola, most companies are afraid of change. The REACH Regulation and especially the authorisation process, can have a great impact on Savroc’s business. “Most companies using hexavalent chrome will only change to a safer alternative when they really have to. That is why we would welcome even stricter regulation, because it would push companies to explore safer alternatives.”
The decision-making process on whether to grant authorisation for certain uses of chromium VI is still ongoing and Savroc has participated in some public consultations, where they have explained their alternative technology. “We are looking forward to hearing what happens next. We hope that if the Commission grants the authorisation, it would not be for too many years. It would be wise to gradually ramp up the alternative technologies during an eventual transition period,” Mr Jahkola concludes.
Savroc is a small university spin-off company based in Kuopio, Finland. It employs three people directly and has altogether around 10 people working for the company.
Savroc develops and markets tough chromium solutions for several industrial applications. Their patent pending technology uses trivalent chrome-based chemicals that are safer for people and the environment.
- REACH authorisation
- Candidate List of substances of very high concern
- Are there safer alternatives
- The Finnish Funding Agency for Innovation
- Horizon 2020 – EU Research and Innovation programme
- Life programme
Interview by Päivi Jokiniemi
Top image: Fotolia
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