Start-Up Wins $1 Million to Tackle Global Food Crisis -- With Edible Insects

COMMERCIAL IMAGE - In this photograph taken by AP Images for Hult International Business School, Former President Bill Clinto
COMMERCIAL IMAGE - In this photograph taken by AP Images for Hult International Business School, Former President Bill Clinton awards $1 million prize to help solve poverty at the Hult Global Case Challenge on Thursday, April 26, 2012 in New York. (Brian Ach /AP Images for Hult International Business School)

And the $1 million Hult Prize for the best start-up idea that secures food for undernourished slum-dwellers goes to... a group of five students from Montreal, Canada, who want to grow, process and sell edible insects.

Unconventional? Maybe to North Americans. But roughly 2.5 billion people are already eating insects seasonally around the world, according to data from the United Nations.

On Monday evening, MBA students from McGill University argued that their venture -- Aspire Food Group -- could foster innovative farming practices that would provide year-round access to nutritious insect foods, including cricket-based chips and baking flour. They pitched their start-up idea in front of judges such as Muhammad Yunus, the microfinance expert who won a Nobel Peace Prize, as well as executives from the United Nations World Food Programme, among others.

"No one would believe we gave an international award [to a team] who told us to eat more crickets," said former President Bill Clinton, who presented the winning team during the Clinton Global Initiative's annual meeting on Tuesday, where government and business leaders convened to address social challenges and commit funds to proposed solutions. "But the truth is they are a ready source of protein... You're laughing, but this is going to be an amazing thing."

Here the winners, who beat more than 10,000 participants, discuss what happens next -- and address a controversial dispute with a non-member at McGill University who claims ownership over part of their idea.

Your team has already travelled to countries such as Mexico, Kenya and Thailand while testing your concept. What happens now that you've won?

"The agenda doesn't change," says Jesse Pearlstein, the team's financial expert. "We need to rapidly deploy to Mexico. "The season of window for grasshoppers is closing, and we need to prepare for the next cycle. We have an order to fulfil with one of our distribution partners in Mexico, which is due for delivery at the end of Q1, 2014. We need to finalize our design and distribute our instafarms to peri-urban farmers to ramp up production."

A report from Businessweek just ahead of the finals highlighted a dispute from a McGill University PhD student who claimed your team used part of his idea. How will you address a possible legal hurdle over the prize money?

"We have no IP [intellectual property] conflict," says Zev Thompson, the team's technology expert. "That was really kind of a misunderstanding on the reporter's side. The Hult organization and McGill have both looked at all the IP involved and determined there is no conflict between our team and this gentleman."

"The instafarm we presented is something we designed in conjunction with a designer in San Francisco and something that we've built since the regional competition," adds Gabe Mott, the strategy and implementation specialist on the team. "There's literally nothing in here that conflicts at all."

Did you already have partnerships in place in case you won?

"The way we had the partnerships set up -- they understood whether we won or lost this prize we are in this space that's going to grow rapidly," says Thompson. "This was a message we got no matter if it was in Thailand, Mexico, Ghana, Kenya. We had people on the ground who said this is the right idea -- we will partner with you. Those partnerships weren't [based] on a triggering, 'if we win condition.' Now we don't have to rely on external funders -- I hope it still comes, but it's completely de-risked."

"If we had gone the VC [venture capital] route, they would have had their own priorities and motivations -- and that could have influenced how our company behaved. We don't have to worry about that."

What is the largest hurdle before you can scale this venture to the next level?

"The biggest hurdle to rapidly scaling might be just the time it takes for us," says Mott. "So much of what we've been able to do up until this point has been getting on the ground, building relationships with governments, NGOs, with local communities -- and that just takes such a huge investment of time and effort."

"I would also add that we're limited [in] the capacity at which we can distribute these instafarm units," says Pearlstein. The faster peri-farmers get them, and the wider the scope, the quicker they can generate yields, process them and generate wholesale opportunities with our distribution partners."