Pioneering Technology Corp.
Location: Mississauga, Ont.
What it does: Manufactures a cooking system that prevents stove fires
President and CEO: Kevin Callahan
Some innovations take years to find a market. But Kevin Callahan isn't that patient. So, when his firm's breakthrough fire-prevention product didn't, well, break through, the president and CEO of Pioneering Technology Corp. rethought his company's entire approach to finding potential buyers. Sales have been cooking ever since.
The Mississauga, Ont.-based firm's patented Safe-T-element cooking system virtually eliminates fires due to unattended cooking, the leading cause of household fires. It consists of cast-iron plates that are installed over electric burners and connected to a control unit mounted inside the stove. The system regulates the heat to each burner, shutting off power to each plate if the temperature hits 350 degrees Celsius, and restoring it only once the plate has cooled off enough that cooking oils won't ignite.
Reza Shah, an Indian-born former NASA engineer who helped develop the navigation system for the Apollo 11 and the black box for the airline industry, developed the technology in 2000. He did so at the behest of his wife, who had almost burned down their house after a phone call distracted her while she was making dinner.
Although cooking safety might not be as sexy as helping put the first man on the moon, the Safe-T-element could have a monumental impact. "Fifteen years ago, unattended cooking accounted for about 25% of all household fires," says Callahan, citing U.S. studies for the National Fire Protection Association, the U.S. Fire Administration and the Consumer Product Safety Commission. "Today, that has gone up to 40%." That's because, although governments have passed fire-prevention legislation mandating sprinklers and smoke alarms, they've relied on education campaigns to combat cooking fires. And they've done so because no technology existed to solve the problem—until the Safe-T-element.
Callahan, a former marketing executive and venture capitalist, met Shah, Pioneering Technology's founder, and learned of the Safe-T-element through Shah's patent lawyer. After seeing the data on fires caused by unattended cooking, Callahan joined Shah and bought into the firm.
At first, Callahan assumed that stove makers such as GE and Whirlpool would be eager to license the technology. But they weren't, and it became clear that he had made a mistake common among young firms: chasing the wrong target. So, Callahan enlisted the help of a group of key influencers to crack a different market.
Pioneering Technology's original design for the Safe-T-element was for retrofits of lower-end electric-coil stoves—the models of choice in campus housing and publicly funded multi-residential housing units. (It is now developing units for other types of stoves.) The $170 device "drove up costs on a low-margin product," says Callahan. Stove manufacturers had little incentive to license the Safe-T-element and build it into their stoves, nor did they face any regulations requiring them to do so.
Pioneering Technology decided it needed to find a contract manufacturer to make its product. In 2005, Callahan lined up a well-known Chinese firm, Panda Electronics, to build the device. Pioneering Technology financed manufacturing and late-stage R&D from private investors, equity financing as part of a reverse takeover and a strategic investor who converted debt into equity.
Callahan also realized he needed to switch to targeting public-housing authorities and post-secondary institutions. Some of these were already buying the product, but mostly just a few units each. "There was a lot of tire kicking," says Callahan. "We needed to convert trials to adoption." He decided to focus his firm's sales and marketing on the group that best understood how many lives and dollars Pioneering's technology could save: the fire-prevention community.
In 2006, Callahan started attending as many fire-safety trade shows as possible to build contacts within these groups and educate them about the Safe-T-element. At first, this change of focus from sales to education hit sales hard, with revenue plummeting from $500,000 in 2006 to $200,000 in 2007. But then Callahan scored a key endorsement at a U.S. trade show. He met with the Washington State Fire Chiefs Association, which went on to endorse the product and promote it within their state. Callahan leveraged this endorsement to secure buy-in from public-housing authorities, including two huge ones in Ontario: the Region of Peel Housing Department and Toronto Community Housing. He hit the jackpot when Peel mandated the Safe-T-element for all new installations and replacements in its housing units.
"We're talking about tens of thousands of units," says Callahan. "The housing authority pulled this technology through." Six other housing authorities in Ontario soon followed Peel's lead and, since then, hundreds more in several countries have done the same. To date, Callahan's firm has sold about 35,000 units. By 2009, sales had reached $1.3 million—more than six times their 2007 level. And they more than doubled in 2010, to $2.9 million. Callahan predicts exponential growth fuelled by increasing buy-in from campuses and housing authorities.
And that's just a drop in the bucket, says Brian Maltby, a member of the International Association of Fire Chiefs, which now endorses the product. "There is huge potential for this," says Maltby, division chief for fire and emergency services in Brampton, Ont. "I do not know of any other product that can do what this one does."
Pioneering Technology's customers now include the U.S. military, 65 campuses and 250 housing authorities across North America, Japan, Britain, Australia and New Zealand. The company has landed some of these clients through distribution deals it has signed with the appliance-distribution arms of The Brick and Leon's Furniture.
The powerful combination of endorsements from the fire-prevention community and the Safe-T-element's unique solution to a life-or-death issue suggest that this is one product that could catch on like wildfire.