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Kwa-Sur Tam has discovered
that some ideas can be better developed in the commercial world
than in academic research laboratories.
A noted expert in power systems, Tam has worked with the electric
power industry for more than 15 years. Although the current process
of opening up the electricity market for competition was not
one of Tam's primary research areas, he was intrigued with the
possibilities and challenges involved. In particular, he was
certain there had to be an efficient way to aggregate residential
and small commercial customers to form buying blocks in the newly
developed competitive market.
"Usually in an open market, the small customer does not
have as much leverage as big customers," Tam explained.
"The customer who doesn't have as much volume usually pays
a higher price." After wrestling with the concept at home
in his off-hours, Tam developed a system that enables small customers
to aggregate their electric loads over the Internet. "Not
only would the system help groups of customers negotiate better
terms, but it would allow other businesses to have access to
these customers to provide additional services."
Tam is convinced that his system will help small power customers
and wants to see it implemented. After exploring several avenues
and meeting with research funders, investors, and venture capitalists,
he realized that his technology is best suited to a commercial
venture. "The financial support I found was from investors
who want a return on their money, rather than grant money,"
Stephen Spry of NewGotham VC introduced Tam to Anand Katragadda,
an information technology consultant who had developed a residential
gateway system that would work synergistically with Tam's system.
Last fall, Tam and Katragadda formalized a partnership and later
incorporated PowerA to commercialize their joint product.
The new Internet company has lined up investors and clients.
"We are still in the early startup phase," Tam said.
"Unlike many Internet startup models, we plan to be profitable,
or at least self-sustaining, within a year," he said, "and
in about three years we plan to grow to the point that we either
tender an IPO or merge with another company."
Even though Tam's contribution to PowerA was developed without
university resources, he is hoping Virginia Tech can benefit
from this venture. "We would like the university or its
foundation to invest in PowerA as a part owner," he said.
The university's benefit would not be just investment return.
Tam said that if Virginia Tech were a partner, the company could
become part of a program to help attract top U.S. students for
graduate studies. "The students could work for the company
with a salary and stock options while going to school for their
advanced degree," he said. "Right now we are losing
students to the dot coms. However, the country needs greater
numbers of technological experts." If students can earn
their Ph.D. without losing financial opportunity, Virginia Tech
would be able to continue to contribute to the country's technological
expertise, he said.
Tam's full-time position on the faculty has restricted his time
commitment to the company. State law specifies that a faculty
member can spend up to one day per week on consulting. "As
the company develops further, it will obviously require more
of my time," Tam acknowledged.
The issue of faculty-owned businesses is very complex and filled
with issues of conflict of commitment and conflict of interest,
he said. "In this beginning stage when a comprehensive university
policy is still being developed, a faculty member has to walk
a very narrow line with very good balance," he said. "The
safest way may be to take unpaid leave."
He said he is hoping that a framework within the university can
be developed in which PowerA could buy out his time in a way
similar to that of a sponsored research project. "Otherwise,"
he said, "I may have to take a leave of absence."
Tam is interested in PowerA not only for its business opportunities,
but also because the technology he developed can serve the public.
"It's not just the monetary profit," he said, "but
we are serving consumers who otherwise do not have the volume
to negotiate for better terms for their electricity."
Tam also said that his involvement in PowerA is a way to open
his research to more practical opportunities. "After you
get in the real world, you can better see what is needed by society
and can develop the technology to meet those needs. Often things
may look good academically, but when we apply them, they are
too expensive or not practical to be effective solutions. I'm
hoping my experience with PowerA will provide me with more practical
"We became engineers to solve society's problems,"
he said. "It's very exciting when our work can directly
benefit the public."