March 7, 2006 by Kevin Robinson-Avila NMSU News Center
LAS CRUCES – Parents may soon gain remote control over teenage driving habits thanks to new technology that start-up company PaceIgnitions has developed with help from New Mexico State University.
The technology, which allows parents to program the speed, time of day and places that teenagers can drive, among other features, will be showcased at a May 2006 venture capital symposium in Albuquerque organized by Technology Ventures Corp.
This is the first time a company that received NMSU guidance from drawing board to finished product has been accepted for review at TVC’s annual symposium. Every year the gathering attracts dozens of investors looking to finance new technology start-ups, said Kevin Boberg, director of NMSU’s Arrowhead Center Inc. and associate dean of the College of Business.
“NMSU provided engineering support to help this company create its product plus consulting support to assess the market and develop a solid business plan,” Boberg said. “PaceIgnitions has a very promising future and a good chance of attracting the investment capital it needs to get going. It’s a real success story.”
PaceIgnitions owner Mike Phelan has already patented his idea, but last year he requested help from NMSU’s Manufacturing Technology and Engineering Center (M-TEC) to mold his initial concept into a functional retail product.
M-TEC engineers and research assistants spent months writing complicated software that allows parents to program driving rules and regulations for teenagers on home computers. Once programmed, the data is uploaded to a receiving box installed on a car’s dashboard. Global Positioning Systems are used to alert teenagers whenever they break the rules, said Ryan Herbon, an M-TEC design engineer.
“If they drive above the speed limit, forget to wear their seatbelt or drive outside an agreed-upon radius, the device will automatically sound an alarm, toggle the dome lights and turn off the radio until the teenager corrects the violation,” Herbon said. “If it’s past curfew, the teenager won’t even be able to start the car.”
The receiver box, which M-TEC staff designed in manufacturing labs at NMSU’s College of Engineering, is slightly larger than an adult hand and works on all cars regardless of make and model. It has a key pad on the front to enter individual codes for up to 10 different drivers. That will free parents and other adults from the rules and regulations programmed for teenagers, Herbon said. The device will record all driving habits, allowing parents to review a teen’s record on home computers.
“If the teen went above the speed limit, jammed on the brakes or accelerated very fast, parents will see it on the report,” Herbon said.
NMSU’s Arrowhead Center, which provides low-cost consulting and assistance services for new and existing businesses, conducted an Internet-based consumer survey to determine the potential market for PaceIgnitions, said Dawn Hommer, Arrowhead project manager for entrepreneurship and outreach. Arrowhead research assistant Madeline Gillette said the survey confirmed consumer interest and willingness to pay a retail price of about $400 to purchase and install the product.
With 25 million Americans 15-20 years of age and 4 million more teenagers entering that demographic every year, Phelan projects annual revenue could reach $31 million in the first year of operation and climb to $731 million within five years.
“With 8,000 teen deaths every year, automobiles are the number one killer of teens in the U.S.,” Phelan said. “There’s a lot of demand for an affordable product like this one that allows parents and teens to team together to form safe driving habits.”
The product could also be used by courts to enforce sentences against drivers convicted of DWI and other offenses, Phelan said.
To get started, Phelan is looking for $2.8 million in venture capital, something Robert Sweitzer, TVC’s southern New Mexico director for project development and business assistance, believes is realistic.
“We think PaceIgnitions will be a very successful business,” Sweitzer said. “We had a pool of 70 businesses that wanted to enter this year’s symposium, and PaceIgnitions was one of only 18 companies chosen.”
Each year, about 30 percent of companies showcased at the symposium receive investment commitments, Sweitzer said. Many more go on to negotiate contracts or form partnerships with other companies and public institutions that make venture capital unnecessary. TVC has held events for more than 300 companies during the past 12 years, leading to $542 million in funding commitments.
In addition to PaceIgnitions, 10-year-old FLUTe—a company that offers remediation technology for oil wells and pipelines—will also be showcased at the symposium. Arrowhead consultants recently assessed market demand for FLUTe technologies, Sweitzer said.
Phelan paid about $15,000 for Arrowhead and M-TEC services, compared with about $500,000 he says commercial consultants would have charged.
“NMSU provided hundreds of thousands of dollars worth of engineering services, market analysis and consumer research,” Phelan said. “Without them it would have taken many, many years to get where I am now.”