INFORMATION #1 EDSR 09-11-2006 - Laserfiche WebLink

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cover hile most people would be content to retire at age 50, build their dream home and perfect their blackjack skills, this slower pace wasn't cutting it for Twin Cities entrepreneur and inventor Bob Walker. Walker is best known for inventing the Sleep Number bed in 1987 and founding Select Comfort Inc. a year later. He set out co design a better mattress to help cure his insomnia, resulting in the highly successful, adjustable comfort air mattress system. Select Comfods sales in 2005 were nearly $700 million. Walk- er retired as chairman and CEO of Select Comfort in 1993, par- tially because running a company isn't as much fun to him as starting one, and he and his wife, JuAnn, set out to build their 12,000-square-foot dream home. "What gets boring is when you're building a business and then al] you're really doing is adding zeros on the end of the sales fig- ures," he says. "Thais when it ceases to be fun. I like creating something, putting form to something, because not everybody can do is It's a real discovery thing." Walker's retirement didn't last very long. Walker was in search of a new product co develop and market. This time it would be a whole new industry -that of alternative fuel sources. "I got into it quite by accident," recalls 4~alker, who turns 64 in September. "We were in our new house, and in the first winrer months our heating bills were running $1,675 a month! That was the surprise of our lives. "I said, `Wha~s wrong with this furnace?' I soon began to real- ize that there was nothing wrong with the furnace. It was the price of energy that was so high, and it's going to go even higher. I said, `I need to do something' "I built this beautiful bed, but it's a small consolation if I'm sleeping in my bed but I'm freezing to death. So I said, `I got another problem to solve."' With escalating ,energy costs, walker believed other consumers also would be interested in cheaper fuel options. For three years, he researched alternative fuel sources and studied biomass technology. Biomass is any plane-derived organic matter available on a renewable basis, including agricultural food, wood waste, aquatic plants, animal waste, municipal waste and other waste materials. He concluded that biomass as a renewable energy source had tremendous potential for cutting energy costs. He started with dry shelled corn, because it's acost-effective method of generat- ingheat. "We looked at what types of corn-burning furnaces were on the market," he says. "We interviewed dealers and customers to find out what they liked about the existing products and what they didn't -everything from their operation and how user- friendly they were to the delivery and installation process - to get a clear understanding of what the customers wanted," Walk- ersays. "In order to understand the business, you have ro research and become an expert in the industry" Walker's research and work with a team of engineers led to the design and development of ahigh-efficiency corn-burning stove that can heat an entire house. He raised $22 million from private investors and launched Bixby Energy Systems in June 2001. The stove, called the 50,000-BTU MaxFire, retails for $3,995, and Bixby sells them through dealers around the country. His stove holds 106 pounds ofcom-that's about $5 worth-which Walker says heats a rypica12,500- to 3,000-square-foot home for more than three days. "You can heat your home for $1.50 a day," Walker says, adding that the stove is designed to be used with a conventional furnace's central fan system to circulate the heat. Sales are booming and Bixby has a backlog of orders. In 2004, the first year the stove was on the market, sales were $1.6 million. "Our goal for fiscal year 2006 was $3 millioq" Walker says, about the year ending May 31. "We did $8.3 million. Our goal in 2007 is to do $40 million. We're confident that we're going to make that. I can tell you we have $23 million in orders right now." With rising energy prices, he says the timing is perfect. "Consumers can cut their energy costs by 70 percent," he says, adding that the stove burns corn at a more efficient rate than wood stoves or other biomass burners available on the marker. It's a pure corn burner, he says, and doesn't require consumers to buy any special burn additives to help the stove burn the corn. And because it burns so efficiently, he says, there's less ash to handle. He says his "MaxYeld" system incorporates high levels of oxy- gen for 99.7 percent combustion efficiency "What this means is more heat per dollar, less ash and no burn enhancers." It's also a consumer-friendly stove that features an on-board computer for easy diagnostics. To meet the growing demand for his stoves, Walker needed to ramp up production. He moved in May from a 16,000-square- foot facility in Rogers to a 91,000-square-foot plant in Brooklyn Park. The company has more than 70 employees and runs two shiks, but will run production 24/7 in the next couple of months. "Eventually we will produce 1,500 to 1,800 stoves a month," Walker says. "This company is developing twice as fast as Select Comfort did." f course, Bixby has plenty of challenges. One is the rising price of corn. Demand from ethanol plants is increasing corn consumption, reducing supplies and pushing tip prices to some of the highest in a decade. (Corn is the primary ingredient used For ethanol, which is mixed with gasoline to produce moror fuel). Corn prices have reached more than $3 a bushel on the Chica- go Board of Trade. That's more than double the price at some grain markets in fall 2005. According to the US. Department of Agriculture, by 2010 U.S. ethanol plants will use 2.6 billion bushels of corn per year; that's 1.2 billion bushels more than 2005. "The more corn that ethanol plants use, the more corn prices will go up and that reduces the value of our product," Walker says. "That's why we continue working toward our pelletization process," which will allow Bixby to produce biomass pellets to 38 UVSIZE SEPTEMBER 2006 www.upsizemag.com