In the AERTC, Locked Down Not Out

 

Nowhere is the “pandemic pivot” more evident than the nation’s innovation ecosystem, where inventiveness is always in play.

That’s both good news and bad. For pharmaceutical innovators and those in related pipelines, COVID-19 is something like an interstellar hyperdrive – a lightspeed now! command backed by a sudden wealth of financial and technological resources.

But for other up-and-comers, not so much. Development-stage enterprise across the nation has paused; startups and other early-stage businesses are folding by the dozen.

In the Advanced Energy Research and Technology Center (AERTC), where energy efficiency and sustainability – not pharmaceuticals – set the tone, there’s a mixed mood. Nobody has jettisoned their warp core, yet, though residents share an understandable trepidation, tempered by an entrepreneur’s courageous optimism.

Of course, there’s not many people in the AERTC right now – the center is observing social-distancing protocols along with the rest of Stony Brook University. And that’s Problem No. 1 for many of its clients, mostly hands-on developers who need their laboratories and equipment.

Fortunately, they can still get in: The AERTC is not on total lockdown. Teams can’t congregate and experiment as usual, but scientists can access their materials as necessary.

That’s been the modus operandi for NextSwitch, a startup working on new high-temperature superconductivity applications. Cofounder Slowa Solovyov, who launched the company in 2015 with Brookhaven Technology Group President Paul Farrell, said the company has adopted “staggered shifts” to keep up momentum and keep everyone safe.

“So, only one person works in the lab, to minimize possible exposure while still making progress,” Dr. Solovyov notes.

There’s also only one scientist at work in the laboratory of soil-remediation specialist Allied Microbiota: cofounder and Chief Executive Raymond Sambrotto, who’s finding the going a bit choppy without his everyday team.

“The student interns I rely on are gone,” Dr. Sambrotto says. “I am working with them remotely as best I can and doing some lab work on my own.”

Remote contributions are also in play for ChemCubed, an AERTC client creating new 3D-printing chemistries. The circa-2014 company is exempt from work-from-home (WFH) restrictions – its materials are common in medical equipments – but has still chosen the safety-first route and instituted WFH protocols, according to cofounder and Chief Technology Officer Dan Slep.

Unfortunately for the hands-on developer, remote work has proved a daunting challenge.

“People are at home and not working as much,” Dr. Slep notes. “Many projects are on hold.”

Work at Energystics’ AERTC laboratory “has stopped completely,” according to founder Reed Phillips, though the 2012 startup – and its patented Vibristor technology, designed to harvest “vibrational energy” from surrounding environments – is hardly dead in the water.

The longtime AERTC client, which has zeroed in on maritime uses as its No. 1 potential vertical, is busily working on new patents and a Kickstarter campaign aimed directly at commercialization, Dr. Phillips says.

Commercialization is also foremost on managers’ minds at ThermoLift, the longtime AERTC constituent leveraging the highly adaptable and broad operating temperature ranging Hofbauer Cycle to provide unprecedented control of heating and cooling systems. 

Like most others, the heat pump innovator has sent its workers home – “development continues, but at reduced productivity,” notes cofounder Paul Schwartz. But for ThermoLift, which is further along the development spectrum than most AERTC clients, the bigger hurdles have proven to be ripe business deals delayed by quasi-quarantines.

“Several travel plans have been postponed, and one major business-development opportunity has been delayed,” Schwartz says.

And it could get worse from here for energy-efficiency companies, Schwartz warns. “The environment for energy efficiency will face strong headwinds in the near term, as access to capital will become more difficult on many projects,” he predicts. “Fuel-price declines will also hamper energy efficiency based on long-term economics.”

 No doubt, there are trying times for the clients of the AERTC. But the band of bootstrappers also shares that universal sense of optimism – that sanguine belief that if they muscle through the worst of the COVID-19 crisis, opportunity awaits.

Dr. Slep envisions a best-case scenario wherein “projects on hold start moving again and people start getting back to work slowly,” perhaps with an assist from the federal Paycheck Protection Program, which he’s currently investigating. Dr. Solovyov – who applauded Small Business Administration disaster loans, “guidance from the (Stony Brook) Small Business Development Center” and his Zoom subscription – also envisions a near future where “we emerge as if nothing happened.”

Knee-deep in microbial treatments for toxic pollutants, Dr. Sambrotto notes that “communication with clients is continuing,” and says he’s counting on some old-fashioned patience from those anticipating Allied Microbiota’s progress.

“Best case, the clients provide some forbearance until I can get back up to speed,” he says. “Worst case, they get impatient and bail.”

Either way, the entrepreneur says, he’s learned another vital lesson about small-business development. “We are habituated to peace and tranquility – not always a good strategy,” Dr. Sambrotto says. “We don’t see black swans.”

Dr. Phillips, who plans to re-open Energystics’ laboratory “as soon as the lockdown is lifted,” suggested this particular black swan was more noticeable than most. Not the COVID-19 pandemic, which “could not have been precisely predicted,” but the fact that “economic stressors” were building up and the U.S. economy was primed for a startup-stifling downturn.

“The idea is not so much to try to guess … precisely when, but rather to assume it will occur approximately every 10 years or less,” Phillips notes. “We went about 11 years this time, the longest economic expansion on record. We were unfortunately way overdue.

“If small-business owners want to be prepared for this type of black swan – an economic disaster that comes out of nowhere with total surprise – one has to remember one simple rule,” Dr. Phillips adds. “At least every 10 years, approximately, it is a virtual certainty that no matter how good the economy seems to be, no matter how hard the Federal Reserve tries to keep the party going, a deep economic recession is going to occur.”

And that, perhaps, is the top takeaway of the great 2020 pandemic, for clients of the AERTC and small businesses everywhere: Not predetermined economic cycles and inevitable recessions, but the virtual certainty that at some point during a company’s development, the unthinkable will occur. 

“We have to somehow accept the playing-field rules have changed forever,” Schwartz notes. “So, we control what we can control, we do our best, we call our colleagues and provide as much support as we can, we encourage others, we hope to identify trends, we wake up every day and we go to sleep every night as hopeful and positive humans, with a bit more humility.

“And we hope we do it right,” he adds. “And if it does not work out that way, we know we did our best, and we will survive, and we will live in the greatest country in the world.”