Whole Tree taking a wholly different approach

Baylor University E-Team building a business from the bottom up

A standard approach to dealing with problems in the developing world is to develop a specific solution to a specific problem: if people lack access to potable water, you develop a water filter for them to buy and use. Need lighting? Manufacture and sell solar lamps. While there’s nothing wrong with this approach, Whole Tree, Inc., a former Baylor University E-Team and the first recipient of Venture Well investment funding (see sidebar on page 4), is using a different tactic: alleviating poverty by providing access to huge markets in the US and abroad.

The challenge, of course, is identifying products that a) US markets want in large quantities, and b) can be supplied by people in the developing world.

That was precisely the challenge facing Baylor engineering professor Walter Bradley a few years ago, when he and post-doctoral student John Pumwa sat down and tried to figure out how to help the rural poor in Pumwa’s home country of Papua New Guinea and countries like it.

Their solution? Find an abundant, renewable resource grown exclusively in countries where the vast majority of people are poor and try to significantly increase the market value of that abundant resource.

The resource they hit on? Coconuts.

It’s not as nutty as it sounds. The coconut palm is ubiquitous throughout the tropical belt that runs around Earth’s equator, and while many uses have been found for the nut the tree produces, as well as the husks that encase the nut’s hard shell, they are currently of such meager commercial value that a typical coconut farmer in the Philippines, the world leader in coconut production, earns only about a dime for every coconut.1

Bradley and his team set out to increase that number. After a couple of months of research, and backed by a 2004 NCIIA E-Team grant, Bradley’s team came up with a suite of coconut-based products designed to up their value: bio-diesel (from coconut oil), pig and chicken feed (from the white “meat”), particle board (from the shells), and anti-erosion matting (from the fuzzy fibers on the shell).

None of the products were quite up to snuff, however. The average coconut farmer makes $500 a year, and Bradley’s team wanted to find uses for the coconut that would bring farmers triple what they made, but none of the envisioned products could accomplish that; for instance, the sale price of coconut oil for cooking was a little more than the price they could sell bio-diesel, so they were actually going backwards.

But as is often the case in entrepreneurship, failure can breed success. Bradley’s team soon switched tracks to focus Bradley, Jim Kephart (Director of Program Development at Baylor Advanced Research Institute) and a local Waco company that supplies unwoven fiber mats to four major automotive companies resulted in the big innovation: using coconut husks for automotive interiors.

That’s right: the coconut car. Bradley and his team partnered with the Waco company to develop technology that converts coconut husk fibers into a safe and suitable replacement for the synthetic polyester fibers used to make trunk liners, floorboards, and interior door covers on cars.

This is potentially a huge market, and investors and grant-makers are paying attention. After incorporating as Whole Tree, Inc., and taking on Baylor graduate students Elisa Guzman-Teipel and Stanton Greer as key leaders, the team won SBIR Phase I funding (Phase II is in the works), and recevied funding from private investors, NCIIA’s Venture Well included.

The market is proving receptive as well; Whole Tree is now working with several major car companies and tier 1 parts-makers to incorporate coconut fiber composites into car parts. “The automotive industry is one of the hardest industries to penetrate,” said Guzman-Teipel, “but we’re almost there.”

They’re also working out their supply chain, with Stanton Greer taking the lead in the SBIR Phase II proposal to develop Whole Tree’s supply chain and Guzman-Teipel working in the field to “make sure that our partners are up to par, make sure everyone’s on the same page, and make sure we get high quality materials no matter what country they’re coming from.”

With as much as 100 million pounds of coconuts potentially going into cars per year and 95% of the world’s coconut supply grown by poor farmers, Whole Tree is nearing its goal of helping the poor by providing them with access to major global markets.

“From the beginning, we’ve wanted to affect the people at the bottom of the pyramid first,” said Guzman-Teipel. “The way that we’ve gone about it isn’t simply to say, ‘Ok, here’s a problem and we’re going to fix it.’ We believe both the US and the developing world can benefit if we design the right products.”

Whole Tree is also an ideal example of how a team can achieve success using NCIIA’s programs to their fullest. Whole Tree has participated in nearly every NCIIA offering, earning two E-Team grants, attending March Madness for the Mind (twice), attending an Advanced Invention to Venture workshop, and ending at the pinnacle: significant investment funding through Venture Well. “NCIIA hasn’t just influenced this project, it’s enabled it," said Bradley.

1. From “Is a Coconut Car Coming Your Way?” by Lee Dye, abcnews.com