With his companies Metaloy, MAR Systems and now MET Innovations—which was named a Charter One Launch100 Leadership Circle honoree in May—serial entrepreneur Claude Kennard has brought innovative technologies and business models to the world of industrial ecology. In this blog, the career CEO and scientist lets us in on his startup stories and shares advice for budding entrepreneurs.
Since entering into the entrepreneurial world with Metaloy, Claude has been passionate about finding ways to recycle waste generated from industrial manufacturing processes. MCAT Services and MAR Systems—two Metaloy offshoots—are also dedicated to this goal. Yet while Metaloy is focused on finding a second life for “catalysts” used by the hydrocarbon industry to create materials like gasoline and aluminum, MAR Systems instead repurposes these spent catalysts to remove arsenic and mercury from water.
It was while Claude was employed at Standard Oil (which later became BP) in procurement that he first began thinking entrepreneurially. Claude surmised reusing catalysts could be both environmentally friendly and profitable. Meanwhile, BP began cutting staff in preparation for an eventual move from Cleveland to Chicago and Claude found himself contemplating his next career move. With a little nudge from his network, Claude decided to take the leap into entrepreneurship.
“One of my customers and suppliers back then was Metaloy,” Claude explains. “The company was owned by an old friend of mine, Aaron Berlin. He said, ‘I offered you a position when I first met you, but how about a partnership in my company?’”
As is often the case with early stage companies, financial uncertainty was part of its initial reality. “I took a day job because Metaloy didn’t have the earnings,” says Claude. “I worked at another company as a senior procurement specialist from 8 to 5 every day. Then, from 6 to 9:30pm, I’d learn the business with Aaron. I did that for about ten months, so I was tired a lot! Still, I followed the dream that I fell in love with.”
Claude’s long hours and hard work paid off: During these ten months, Metaloy’s earnings went from half a million dollars to $1.1 million, and in late 1992, he was able to leave his day job and focus completely on the startup.
Although Claude has formal business school education, transitioning into the startup space was an adjustment. “My biggest problem is that I didn’t understand the games we were playing,” he explains. “I’d received my MBA, but it wasn’t like the MBA of hard knocks, which is getting your butt in the field.”
But like many entrepreneurs, he was also able to apply what he learned in his previous jobs to this endeavor, which gave him a competitive edge. “My advantage was that I knew the industry. Having worked for BP, I knew who to call to see if my material could be considered for their reactors. Or I could recycle their material on the back end of their processes.”
Though Metaloy continued to thrive, it needed more money to grow. In 2005, Claude created a spin-off, MAR Systems, to commercialize his patented technology. Claude approached JumpStart for funding, and in 2006, MAR Systems became a JumpStart portfolio company.
With JumpStart’s help, Claude became connected to other sources of capital. This allowed him to meet with investors throughout the country—and accrue even more valuable entrepreneurial wisdom. “When I was ‘telling and selling’ MAR Systems throughout the country, I learned that the person across the table from me is no different than I am,” says Claude. “Maybe he’s got a bit more money than I do. Whether he wants to share that with me is not my decision. All I can do is present my case.”
“For the young entrepreneur looking for funding, make sure you understand what your business is,” he advises. “You’ll also need to kiss a lot of frogs.”
This hard-won advice has certainly paid off, as Claude has recently created MET Innovations, another Metaloy spin-off. Housed in The Incubator at MAGNET, MET Innovations will develop processes and technologies valued over $150 million within the next three to seven years. “My move to MAGNET has rejuvenated my efforts to do what I love to do,” says Claude. But that’s not all he’s done to try to make his new company a success: Claude is one of the first clients of JumpStart’s mentoring program.
“If you surround the entrepreneur with other, seemingly unrelated, opportunities, he will create more opportunities,” Claude says. “Good ideas come from anywhere—and can open you up to new things. And the more entrepreneur-friendly environments you have in Cleveland, the more energy that builds around those groups—which creates the next opportunity that you never knew you had.”
Clearly, Claude’s combination of passion and experience—as well as his desire to keep learning and growing—ensure he’ll be an important part of our entrepreneurial ecosystem for his next 20 years.
Johnny Hutton is Vice President, providing intensive assistance to diverse entrepreneurs, guiding minority, women, and inner city-based entrepreneurs seeking to build larger scale national and international firms.