(FORTUNE Small Business) – WHAT IT DOES: Makes a solar-powered trash compactor

FOUNDERS: David Carlstrom, 35; Steve Delaney, 40; Kevin Dutt, 34; Richard Kennelly, 38; Alexander Perera, 32; Jim Poss, 32; Bret Richmond, 22; Jeff Satwicz, 22; Mikell Taylor, 21

DATE FOUNDED: April 2003

STARTUP CAPITAL: $250,000 from private investors

GOAL: To launch a complete line of renewable-energy products

Most entrepreneurs have no reason to worry whether their product can withstand assault by a 500-pound bear. But for the founders of Seahorse Power Co., maker of a new solar-powered trash compactor, passing the bear test is essential, especially if they want to sell to state parks like those in California, where the law requires that trash compactors withstand ursine abuse. "While we're not so sure that we'll be able to resell the test machine, we are certain that the bear won't win," says Jim Poss, 32, founder and president.

Seahorse Power, our contest entry from Babson College's F.W. Olin Graduate School of Business, won third place for its innovative product, backed by a solid business model. Called the BigBelly, this $5,000 device, about the size of a street-corner mailbox, compresses litter by channeling the sun's energy into a battery-powered motor that crushes garbage automatically. The BigBelly then notifies sanitation workers via beeper when it is full. The Boston startup plans to sell its compactor not only to parks but to resorts, municipalities, and waste-management firms as well.

Poss, who studied environmental science at Duke, came up with the idea three years ago while compacting trash at his parents' sink. "I thought, 'We could save some energy and do this with solar,' " he recalls. It wasn't until he had spent two years designing electric vehicles for Solectria in Woburn, Mass., and had enrolled in Babson's MBA program that he decided to turn his brainstorm into a business. After persuading fellow MBA candidate and renewable-energy club founder Alexander Perera, 32, to launch Seahorse Power in April 2003, Poss spent the summer designing a prototype with two engineers. The result was a machine that can run for 30 days without exposure to sunlight.

The company's first sale came from Vail Resorts in Colorado, which bought a unit in February. "We put that thing through its paces all over our mountain," says the resort's environmental coordinator, Luke Cartin. "We ran 35 compactions per day, trying to kill its battery. We couldn't. I've never seen anything like it." Six Flags New England plans to try the BigBelly at its Agawam, Mass., amusement park this year.

Seahorse Power, which projects sales of $80,000 in 2004, expects to become profitable by 2006. But to reach its growth potential it will have to persuade long-haul waste collectors to purchase its $5,000 device, which costs more than many rival compactors, as one competing team noted. Poss says that he is confident that the haulers will buy it once they learn that the BigBelly will save them enough trips each day to pay for itself within a year.

Does Seahorse Power have what it takes to play in the notoriously tough waste-hauling industry? As Poss might put it, bring on the bears. —MAGGIE OVERFELT