How to Commercialize Chemical Technologies for a Sustainable Future E-Book
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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
The definitive guide for scientific entrepreneurs commercializing sustainable technologies in the chemical sector
Lacking the considerable resources of multinational chemical companies, entrepreneurs face a unique set of risks and challenges. How to Commercialize Chemical Technologies for a Sustainable Future is targeted at innovators who are embarking on the entrepreneurial path with their sustainable chemical technology but are unsure of what steps to take. This first-of-its-kind resource features contributions from a diverse team of expert authors, including engineers, venture capitalists, marketing specialists, intellectual property professionals, regulatory experts, industry practitioners, and many others.
Accessible and highly practical, this real-world guide covers each step of the technology commercialization process, from market landscape analysis and financing to scale-up and strategic partnering. Throughout the book, effective tactics and strategies for growing a new venture are supported by case studies highlighting the economic and environmental impact of successful commercialization, and identifying the common mistakes that lead to lost opportunities. Filled with invaluable advice and actionable steps, this book:
- Uses valuation concepts, tools, and examples to demonstrate that for a chemical technology to be sustainable it must not only have market value but also confer benefits to human well-being and the environment
- Offers templates and tools for understanding what customers need, who the competition is and how to successfully differentiate your product to those customers
- Describes how to practically advance your technology from conception all the way to commercial demonstration
- Presents advantages and disadvantages of strategic partnering from the perspective of the start-up and the larger industrial partner, along with strategies to mitigate risks within a partnership
- Provides an overview of the legal regulatory requirements for bringing new chemicals to market in several key geographic regions, as well as the impact of public policy on commercialization
- Offers insights and practical strategies on intellectual property management, raising investment, and operationalizing a startup company
How to Commercialize Chemical Technologies for a Sustainable Future is essential reading for budding entrepreneurs in chemistry, materials science, and chemical engineering looking to bring their sustainable technologies to market. It is also a valuable reference for investors, policymakers, regulators, and other professionals.
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Table of Contents
Cover
Title Page
Copyright
Dedication
List of Contributors
1 Introduction
1.1 What Is This Book About?
1.2 What Is a Sustainable Chemical Technology?
1.3 Commercializing Sustainable Chemical Technologies Is Challenging
1.4 Who Should Read This Book?
1.5 Structure of This Book
1.6 Using This Book
Acknowledgments
References
Part I: Laying the Foundation
2 Marketing and Landscape Analysis
2.1 Introduction: Think Marketing
2.2 Creating a Marketing Plan: The Application Framework
2.3 Customer Needs and Mapping
2.4 Customer Analysis: How to Gather Customer Needs Data
2.5 Customer Needs Mapping
2.6 Market Segmentation
2.7 Market Segment Evaluation
2.8 Competitive Landscape and Competencies
2.9 Conclusion and Next Steps
3 Determining the True Value of a Sustainable Chemical Technology
3.1 Introduction
3.2 Sustainable Value and the United Nations Sustainable Development Goals
3.3 Life‐Cycle Thinking and Life‐Cycle Assessment
3.4 Attributes and Impacts: Check Your Assumptions
3.5 Business Risk and Sustainable Design – Or How to Turn an Externality into a Selling Point
3.6 Guiding Principles for Sustainable Chemical Technology Innovations: Chemistry, Carbon, and Circularity
3.7 Chemical and Material Considerations that Impact Sustainable Value
3.8 Introducing Your Sustainable Chemical Technology into the Marketplace
3.9 Conclusions
References
4 Intellectual Property Management and Strategy
4.1 Intellectual Property
4.2 What Is an Intellectual Property Right?
4.3 The Value of Intellectual Property Rights to a Sustainable Chemical Technology Company
4.4 Patents Explained
4.5 Building an IP Portfolio
4.6 Avoiding Other People's IPRs
References
Part II: Political and Environmental Considerations
5 Navigating and Leveraging Government Entrepreneurial Ecosystems for Support
5.1 What Is an Entrepreneurial Ecosystem?
5.2 Types of Resources Available
5.3 Ecosystems in the United States and Canada
5.4 Ecosystems in the European Union
5.5 Setting Priorities When Pursuing Resources
5.6 Conclusion: Engage with Your Ecosystem
References
6 Factoring in Public Policy and Perception
6.1 Introduction
6.2 Chemicals and Policy
6.3 New Trends and Approaches
6.4 Conclusion: Policy as Strategic Advantage for the Sustainable Chemistry Innovator
Acknowledgments
References
7 Pre‐market Approval of Chemical Substances: How New Chemical Products Are Regulated
7.1 Introduction
7.2 Overview
7.3 United States
7.4 European Union (EU)
7.5 China
7.6 Canada
7.7 Developing a Global Strategy
7.8 Summary
References
Part III: Springing into Action
8 Navigating Supply Chains
8.1 Introduction
8.2 Supply Chain Complexity
8.3 Recognizing Points of View
8.4 Supply Chain Hurdles and Strategies to Overcome Them
8.5 Lessons Learned
References
9 Strategic Partnering
9.1 Introduction
9.2 Advantages and Disadvantages of Strategic Partnering
9.3 The Start‐Up Perspective: Partnership Advantages and Disadvantages
9.4 The Industrial Partner Perspective: Partnership Advantages and Disadvantages
9.5 Mitigation of the Disadvantages and Risks
9.6 Evaluating a Potential Partnership
9.7 Establishing the Partnership
9.8 Executing the Partnership
9.9 Closing the Partnership
9.10 Case Studies
References
10 Bridging the Gap 1: From Eureka Moment to Validation
10.1 Introduction
10.2 Fundamental Research Leading to an Invention
10.3 Proving the Concept
10.4 The Tech Team: Moving Beyond an Academic Group
10.5 Developing the Road Map
10.6 Defining Your Technology Development Requirements
10.7 The Innovation Cycle: Design, Simulate, Fabricate, Test, Iterate
10.8 Accelerating the Process
10.9 Growing and Evolving the Team
10.10 Summary
References
11.1 Bridging the Gap 2: From Validation to Pilot Scale‐Up
11.1.1 Introduction
11.1.2 Letting Go and Obtaining External Expertise
11.1.3 Safety Considerations
11.1.4 Commercial Considerations
11.1.5 Techno‐Economic Assessment
11.1.6 Conclusion
Notes
11.2 Bridging the Gap 2: From Validation to Pilot Scale‐Up
11.2.1 Introduction
11.2.2 Piloting and Scale‐Up Basics
11.2.3 Process and Equipment Considerations
11.2.4 Pilot Plant Operation and Location
11.2.5 Conclusion
12 Raising Investment/Financing
12.1 Introduction
12.2 Main Investment Sources
12.3 Unique Considerations for Investing in Sustainable Chemistry
12.4 Financing Considerations
12.5 Best Practices to Present Your Company to an Investor
12.6 Financing Case Study: Cnano Technology
Reference
13 Operationalizing a Start‐Up Company
13.1 Introduction
13.2 Oversight Boards
13.3 Systems
13.4 Conclusion
Part IV: Success Stories
14.1 Making an Impact: Sustainable Success Stories
14.1.1 The Vision
14.1.2 The Core of the Technologies
14.1.3 Determining the Value Proposition
14.1.4 The Commercialization Pathway
14.1.5 Financing
14.1.6 Development and Validation
14.1.7 Successes
14.1.8 Lessons Learned
References
14.2 Making an Impact: Sustainable Success Stories
14.2.1 Initial Technology and Business Model
14.2.2 Change in Direction
14.2.3 Exploring and Validating a New Opportunity
14.2.4 Huge Challenges and Huge Advances
14.2.5 Expanding Our Technology Portfolio
14.2.6 Additional Strategies and Lessons Learned
14.2.7 Summary
References
14.3 Making an Impact: Sustainable Success Stories
14.3.1 Blind Luck or Preparation?
14.3.2 Hazel Technologies: How It Started and Where We Are Today
14.3.3 Understanding What Our Business Really Is
14.3.4 Targeting Value Through the Supply Chain
14.3.5 Final Thoughts
Index
End User License Agreement
List of Tables
Chapter 3
Table 3.1 Human health and environmental hazards posed by commercial refriger...
Table 3.2 Hazard endpoints included in leading CHA methodologies
Chapter 6
Table 6.1 SAICM issues identified for action as part of 2020 goals.
Table 6.2 California: priority products.
Chapter 7
Table 7.1 NSN reporting obligations.
Chapter 10
Table 10.1 An example of design structure matrix (DSM) before sorting. Input ...
Table 10.2 An example of design structure matrix (DSM) after sorting. Input a...
List of Illustrations
Chapter 2
Figure 2.1 Factors defining value.
Figure 2.2 Application framework steps.
Figure 2.3 A sample customer needs flow chart.
Figure 2.4 A sample customer map for customer ABC.
Figure 2.5 Market segmentation questions.
Figure 2.6 A sample segment needs flow chart.
Figure 2.7 Segment importance ranking and competitor rating.
Figure 2.8 Ranking your company.
Chapter 3
Figure 3.1 Great Pacific garbage patch.
Figure 3.2 The United Nations Sustainable Development Goals.
Figure 3.3 Inputs into product life cycle.
Figure 3.4 Case study of examining the correlation between packaging attribu...
Figure 3.5 Interrelationship between attributes and environmental impacts al...
Figure 3.6 Systems view of material flow cycles and policy frameworks.
Chapter 4
Figure 4.1 General timeline for the patent process. Most time points are fir...
Chapter 5
Figure 5.1 European Commission–backed financing available for entrepreneurs ...
Chapter 8
Figure 8.1 A textile supply chain.
Figure 8.2 Decision‐makers and influencers for additive manufacturers in the...
Figure 8.3 What do you see?
Figure 8.4 What do you see now?
Figure 8.5 Supply chain positioning produces different points of view.
Figure 8.6 Deterrents to the adoption of sustainable chemical technologies....
Figure 8.7 Global brands partnering with smaller sustainable chemistry compa...
Figure 8.8 New technology uptake roadblocks.
Figure 8.9 Formaldehyde. American Chemical Council says “safe” [1]. American...
Figure 8.10 Substitute paint stripper in response to methylene chloride ban....
Figure 8.11 UN sustainable procurement statement.
Figure 8.12 California's Right to Know Act as an example of transparency.
Chapter 10
Figure 10.1 A Fishbone diagram from the early days of Bodle Technologies.
Figure 10.2 A corresponding Gantt chart of the DSM example.
Figure 10.3 A typical development cycle for new technologies.
Figure 10.4 Classical serial approach to workflow management.
Figure 10.5 Staggered‐serial approach to workflow management.
Figure 10.6 High‐level flow of activities in a machine learning–assisted com...
Chapter 11a
Figure 11.1.1 Hierarchy of controls.
Figure 11.1.2 Example block flow diagram.
Figure 11.1.3 Example process flow diagram (PFD).
Chapter 12
Figure 12.1 Available forms of financing.
Figure 12.2 Company Fit for VC Funding.
Chapter 13
Figure 13.1 Sample hybrid P&L/cash flow approach for projections.
Chapter 14a
Figure 14.1.1 A schematic summary of the chemical reaction in the CO
2
utiliz...
Figure 14.1.2 A CarbonCure system connected to a CO
2
tank at a ready‐mix pla...
Figure 14.1.3 Schematic showing CarbonCure's end‐to‐end process.
Figure 14.1.4 Example of projects that leveraged CarbonCure's technology.
Chapter 14b
Figure 14.2.1 Beneficial properties of polyethylene 2,5‐furandicarboxylate (...
Figure 14.2.2 Avantium's monoethylene glycol (MEG) pilot plant.
Chapter 14c
Figure 14.3.1 Pears stored in the absence and presence of Hazel Technologies...
Guide
Cover
Table of Contents
Begin Reading
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How to Commercialize Chemical Technologies for a Sustainable Future
Edited by
Timothy J. Clark and Andrew S. Pasternak
GreenCentre Canada
Kingston
Ontario
Canada
This edition first published 2021
© 2021 by John Wiley & Sons Ltd
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. Advice on how to obtain permission to reuse material from this title is available at http://www.wiley.com/go/permissions.
The right of Timothy J. Clark and Andrew S. Pasternak to be identified as the authors of the editorial material of this work has been asserted in accordance with law.
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John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, USA
John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, UK
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The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, UK
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In view of ongoing research, equipment modifications, changes in governmental regulations, and the constant flow of information relating to the use of experimental reagents, equipment, and devices, the reader is urged to review and evaluate the information provided in the package insert or instructions for each chemical, piece of equipment, reagent, or device for, among other things, any changes in the instructions or indication of usage and for added warnings and precautions. While the publisher and authors have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives, written sales materials or promotional statements for this work. This work is sold with the understanding that the publisher is not engaged in rendering professional services. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. The publisher, editors, and authors shall not be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. The fact that an organization, website, or product is referred to in this work as a citation and/or potential source of further information does not mean that the publisher and authors endorse the information or services the organization, website, or product may provide or recommendations it may make. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. The publisher, editors, and authors shall not be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Library of Congress Cataloging‐in‐Publication Data applied for
HB:ISBN: 978‐1‐119‐60484‐6
Cover Design: Wiley
Cover Image: © cherezoff/Shutterstock
I would like to dedicate this book to my father, Jack Pasternak, who was an active chemical technology entrepreneur in his own right. He was a great supporter of the creation of this book, but unfortunately passed away before its publication. I would also like to thank the ongoing support and encouragement of my wife Maxine and son David who put up with my spending many evening hours on this project.
Andrew S. Pasternak
I also dedicate this book to my father, Ron Clark (1945–2012), who was a chemical engineer and an incredibly supportive and loving dad. He was a meticulous technical editor and would have been very proud of this book. I want to acknowledge my wife Lauren who is a constant source of loving encouragement and patience, and my two sons, Calum and Ciaran, who are the most fun people I know. Lastly, I am very grateful to my mother Sylvia, brother Andrew, and sister‐in‐law Merrylee for their love and support.
Timothy J. Clark
List of Contributors
Harish Bhaskaran
Dept. of Materials
University of Oxford
Oxford
UK
Jason Clark
Braskem America
Cambridge, MA
USA
Timothy J. Clark
GreenCentre Canada
Kingston, ON
Canada
Matthew Cohen
Pangaea Ventures
Phoenix, AZ
USA
Janine Elliott
Los Angeles Cleantech Incubator
Los Angeles, CA
USA
Andrew Ellis
NORAM Engineering and BC Research
Vancouver, BC
Canada
Richard E. Engler
Bergeson & Campbell, P.C. and The Acta Group
Washington, DC
USA
Tess Fennelly
GreenSustains, Inc.
Minneapolis, MN
USA
Gert‐Jan Gruter
Avantium
NV Amsterdam
The Netherlands
Lauren Heine
ChemFORWARD
Spokane, WA
USA
Peiman Hosseini
Bodle Technologies
Oxford
UK
Shawn Jones
White Dog Labs Inc.
New Castle, DE
USA
James Lockhart
NORAM Engineering and BC Research
Vancouver, BC
Canada
Kira Matus
Division of Public Policy
HKUST, Clearwater Bay
Kowloon
Hong Kong
Sean Monkman
CarbonCure Technologies Inc.
Dartmouth, NS
Canada
Aidan R. Mouat
Hazel Technologies
Chicago, IL
USA
Andrew S. Pasternak
GreenCentre Canada
Kingston, ON
Canada
Rohit Sood
Spinverse Oy
Espoo
Finland
Nick Sutcliffe
Mewburn Ellis LLP
Cambridge
UK
Tom van Aken
Avantium
NV Amsterdam
The Netherlands
Jennifer Wagner
CarbonCure Technologies Inc.
Dartmouth, NS
Canada
Andrew White
CHAR Technologies Ltd.
Toronto, ON
Canada
Margaret H. Whittaker
ToxServices LLC
Washington, DC
USA
1Introduction
Timothy J. Clark and Andrew S. Pasternak
GreenCentre Canada, Kingston, ON, Canada
1.1 What Is This Book About?
The fundamental impact of the chemical industry is pervasive throughout the world. Every product, material, and object we own or use owes its existence in some way to this vital sector. Our food supply, medicines, clothing, and mobile devices all depend on chemistry. Even products or services that upon first glance do not obviously involve chemistry undoubtedly do for some secondary purpose such as their storage, transportation, or delivery [1]. In addition, the chemical industry plays a dominant role in the global economy, being responsible for more than $5 trillion in revenue and 20 million jobs worldwide [2]. It has broadly contributed to our technological progress over the last 200 years.
The industry has also brought problems that are increasingly recognized as “must solve” to ensure long‐term human health along with environmental, economic, and even geopolitical stability. Examples include the intrinsic safety of chemicals available in the marketplace, hazardous materials released into the environment during manufacture, and the materials' use and disposal, all of which are receiving more attention than ever before [3]. This also unsurprisingly coincides with the increasing number of peer‐reviewed, data‐driven reports demonstrating negative long‐term effects on the planet and its inhabitants [4]. Climate change and masses of nonrecyclable plastics littering the ocean are just two obvious examples.
These challenges are daunting but not insurmountable, especially as there is no shortage of technical innovations and advances in sustainable chemistry emerging from around the world. The academic community is constantly discovering promising new chemical technologies, and more importantly entrepreneurs are becoming empowered and encouraged to bring them to market. This is imperative as any anticipated or quantified sustainable benefit associated with a given technology will never realize its potential while it remains a laboratory‐scale research project. In other words, it is only through the development, scale‐up, and commercial deployment of sustainable chemical technologies that these challenges can be overcome. The issue at hand is how to advance a promising technology down the development path to the point where it has been validated, demonstrated to be economically competitive, and scaled to meet customer demand. Unlike large multinationals with sizable resources to address commercialization challenges, the entrepreneur developing a sustainable chemical technology is severely resource limited and faces significant barriers. When it comes to raising the required funds, they are often trapped in a catch‐22 situation: funding requires validation and scale, while validation and scale require funding.
It is the entrepreneur who will undoubtedly play a crucial role in deploying the required technologies that ensure we maintain our quality of life while not robbing future generations of the same [5]. This is the essence of sustainability. Multinational companies will continue to invest and innovate, but their resources are not infinite, and “out‐of‐the‐box” thinking and nonincremental solutions often pose a challenge to bureaucratic and conservative corporations that must answer to their shareholders [6]. Many large companies today recognize this position and are looking to support and partner with start‐ups developing attractive technologies. One could argue that the future success of larger companies is at least in part dependent on the success of these entrepreneurs.
The environmental challenges associated with the chemical industry can be met by providing the budding entrepreneur with the training and skills needed to commercialize a sustainable chemistry technology. There is a significant knowledge gap between how to conceive and test an innovation and how to actually get it to market. We created this book to help address this gap. The skills required to create, operate, and grow a company are generally not part of the curriculum in current chemistry or engineering programs. While elements may be taught in more progressive departments, it is certainly not in any comprehensive manner. Relevant courses and training programs for the budding entrepreneur are becoming increasingly available, but these are not chemistry‐specific and may be deemed a distraction to the student focused on their research projects. In addition, there is often trepidation on the part of chemists to take advantage of these offerings as they are often far removed from their past experiences.
This book will describe the steps, decision points, and hurdles faced by innovators developing sustainable chemical technologies and offer practical tactics and strategies for confronting them. This includes aspects of product/process development, scale‐up, market landscape analysis, regulatory frameworks, strategic partnering, intellectual property management, and financing.
To the best of our knowledge, there is currently no other book on the market that addresses this broad topic. Many texts have been published about the general commercialization of technologies [7]. However, few target the chemical innovator, and none is specific to the commercial deployment of sustainable technologies. One of our overarching goals in preparing this book was not to create a comprehensive, lengthy tome that will just sit on your shelf. Instead, our intention was to offer a relatively concise guide that includes practical advice as you consider taking the entrepreneurial path.
Overall, the purpose of this book is to provide the following:
Awareness and information on the many steps required to commercialize a sustainable chemical technology
Guidance for making appropriate strategic choices when creating and subsequently growing a new venture
Motivation and inspiration via success stories of early‐stage companies that have been effectively passing through the various stages of technology commercialization
1.2 What Is a Sustainable Chemical Technology?
It is important to establish how we have chosen to define a “sustainable” chemical technology. Definitions abound, and controversies have arisen over linguistic nuances [8]. One basic definition (described in Chapter 3) is provided by the Organisation for Economic Co‐operation and Development (OECD), which defines sustainable chemistry as “a scientific concept that seeks to improve the efficiency with which natural resources are used to meet human needs for chemical products and services.” However, trade associations, individual companies, governments, and many nongovernment organizations all have variously differing definitions – many in ways that (not surprisingly) lend credence to their own mandate or beliefs. The term “green” also has numerous definitions and is applied, sometimes incorrectly, synonymously [9, 10].
For the purpose of this book, we will use a relatively simple definition: a sustainable chemical technology offers a demonstrated environmental benefit(s) while remaining economically competitive with existing technologies. This is a broad definition as it addresses three key elements.
The first is most obviously the demonstrated environmental benefit. A chemical technology can be deemed “sustainable” if it benefits at least one aspect of the environment. Examples include protecting the environment by using technologies that improve water‐use efficiency and treatment and reducing waste material production and release. These benefits can also present themselves in technologies that are not intrinsically environmental in nature but serve a greater purpose of reducing energy or resource use and thus, on balance, will improve the environment. A base metal catalyst that can replace stoichiometric reagents and lower the energy input required for a given process or bio‐derived plastics that can be controllably degraded and recycled are examples. Comprehensive quantification of various metrics and subsequent life‐cycle analyses – topics not extensively covered in this book but available from multiple sources [11, 12] – are required prior to making any formal claim regarding environmental benefits. The results of these analyses can be surprising. There are instances where technologies may on the surface appear to be beneficial for the environment when in fact it is later proven otherwise [13]. The converse can also be true.
The aspect of economic competitiveness may be considered by some to be less worthy and should therefore not be included in the definition. We wholeheartedly disagree. A technology that is not cost‐competitive in its respective market will simply not be adopted regardless of any environmental benefit. Government regulations or subsidies can offer short‐term economic attractiveness, but it is a risky proposition to base a business on the whims of a governing party. Even a panacea chemical technology won't have its desired effect on the environment if it is never sold to, or used by, someone. Furthermore, the so‐called “green premium,” the additional cost of an environmentally friendly product, often negatively affects the consumer buying decision. Although many consumers claim to be eco‐conscious, in practice a majority are reluctant to pay more for environmentally superior products [14].
Finally, existing technologies must be taken into account when assessing the sustainability of an innovation. No technology is evaluated in a vacuum. Everything is relative to what has already been developed and being used by customers today. You cannot make a claim about any sustainable benefits without comparing them to a baseline of existing technologies. And there are always existing technologies. In our experience, one must be skeptical of claims of a completely novel innovation that will revolutionize the industry. Perhaps it will, but close comparison to existing technologies often paints a different picture. This concept applies to the two aspects described earlier; both the environmental benefits and economic competitiveness must be evaluated relative to existing technologies.
1.3 Commercializing Sustainable Chemical Technologies Is Challenging
Chemical technologies are particularly difficult to commercialize regardless of your level of experience or motivation, as they face a complex set of challenges impacting time to market. The challenges include the following:
Long development cycles
Sheer size and relative inertia of the chemical industry and supply chains
Environmental health and safety concerns
Regulatory climate and approval processes
Large amount of capital and financing required
Early‐stage companies are often cash‐poor, which limits their access to talent, specialized lab infrastructure, and expensive instrumentation and capital equipment required to scale their technology. Funding is always an issue, given that early‐stage technologies do not align well with the criteria of the investment community. Many investors are wary of technologies that have not been scaled and validated in an industrial setting (providing a clearer cost profile), while entrepreneurs are reluctant to concede high amounts of equity on what they believe to be low valuations. This mismatch of intentions often leads to lost opportunities with undeveloped technologies and companies never realizing their potential.
One can further appreciate the challenges of commercializing a sustainable chemical technology by comparing to other sectors. As an example, consider the case of commercializing new application software. The intention is not to diminish the many challenges of software commercialization (and there are many), but to demonstrate the difference and scale of the challenges that chemical technologies face. See the following comparative table:
Application software technology
Sustainable chemical technology
Overall time to market
6–18 months
5–10 years
Development stage
Operating space required
Commercial or residential office
Appropriate chemical laboratory infrastructure to safely handle reagents and materials with varying hazards
Equipment needed
Computer(s)
Process reactors and ancillary equipment, characterization and analytical instrumentation
Cost of initial equipment requirements
<$5000
>$1 million
Investment required
Low
High
Health and safety requirements
None
High: care is required handling chemicals and equipment
Scale‐up stage
Additional skills required
Minimal
Process engineering and scale‐up expertise
Cost
<$200 000
$5–10 million
Strategic partner investment required
Low: test sites can evaluate software at minimal cost
High: partner needs to invest resources to pilot the technology
Health and safety requirements
None
Very high: piloting at larger scales brings increased safety risks
Manufacturing Stage
Additional equipment requirements
Practically none
Extensive: commercial‐scale reactors or production equipment required
Distribution costs
Minimal
High
Regulatory requirements
Minimal
Very high
Health and safety requirements
None
Very high: any health and safety incidents can be disastrous
What is readily apparent with these two cases is the significant amount of resources and time required to advance a chemical technology to market. The risks are also significantly higher as it costs a lot more to fail commercializing a chemical technology than a software application. This translates directly to higher cost of capital and funding challenges.
1.4 Who Should Read This Book?
This book is targeted at innovators who are considering creating, or entrepreneurs in the early stages of running, a sustainable chemistry start‐up company. In our experience, entrepreneurs in this sector often come from one of two backgrounds. Although both groups bring a strong set of skills, they are often incomplete. This book was written to begin the process of raising awareness and providing problem‐solving tactics so that you can better navigate the many challenges you will encounter. This knowledge will position you to make smarter, more strategic decisions as you move forward with your business more efficiently.
The first group are undergraduate/graduate students or post‐doctoral researchers who want to commercialize a technology on which they were working during their studies. They may be wondering, “What exactly needs to be done to transition my discovery into a successful business?” We have observed a greater number of chemistry graduates and professors who have invested considerable time and energy into their research projects and now desire to take them to the next level. These individuals have become highly trained and motivated technical experts but have little understanding of the next steps beyond their lab bench. The skills needed are not taught in chemistry departments and are difficult to obtain in a short time frame. Courses on entrepreneurship and mentorship resources are available, from MBA‐type classes to training programs offered by university incubators or accelerators. However, these educational resources are often not tailored to the unique challenges of sustainable chemical technology commercialization.
The second group involves more experienced entrepreneurs from other sectors (not the chemical industry) who now want to make a difference by commercializing a sustainable chemical technology. These individuals were often successful with their previous ventures and have greater amounts of capital and credibility at their disposal. They have business acumen but a limited understanding of chemistry and the nuances of the commercial pathway in the chemical industry. Although passionate and accomplished, they often underestimate the considerable challenges, resources, and skill sets required to advance a chemical technology compared to their previous entrepreneurial work in a different sector.
1.5 Structure of This Book
This book is divided into four distinct parts.
The first part, “Laying the Foundation,” focuses on the foundational elements of a sustainable chemistry start‐up company. Chapter 2, “Marketing and Landscape Analysis,” explains that successfully marketing and commercializing a sustainable chemical technology requires the same market‐driven discipline that is needed to commercialize any other new technology. As such, it is critical to understand what customers need, who the competition is, and how you can successfully differentiate your product to those customers. The chapter describes an “application framework” for the creation of an effective and realistic marketing plan. It will provide templates and tools to interview your potential clients and methods to uncover the information that is most important in developing a true marketing‐based (as opposed to sales‐based) approach.
Chapter 3, “Determining the True Value of a Sustainable Chemical Technology,” explains that a product's market value and “true” value can often be different when sustainability factors are taken into account. Starting with the 17 United Nations Sustainability Goals, this chapter explores various frameworks to better define and understand the true value of your innovation and how to communicate it to potential investors and customers.
Chapter 4, “Intellectual Property Management and Strategy,” covers fundamental considerations when commercializing any type of invention. The chapter provides an “Intellectual Property 101” with a focus on patents but also touching on know‐how, trade secrets, copyright, and trademarks. The patent application process will be described practically from idea to issued patent, with particular attention given to what is required of you at each step of the process. An honest overview is also provided of the benefits and detriments of intellectual property (IP) for the entrepreneur. Critically, some of the strategic considerations in developing an IP position (a “ring fence”) will be described to protect your company's most valuable assets, along with how to create an IP package that will be attractive to potential investors.
The second part, “Political and Environmental Considerations,” examines the political, regulatory, and public opinion drivers affecting the commercialization of sustainable chemistry technologies. It starts with Chapter 5, “Navigating and Leveraging Government Entrepreneurial Ecosystems for Support,” which explores the array of resources available to you involving government, not‐for profit, and for‐profit organizations at regional or national scales in different parts of the world. These ecosystems were created to help you advance your company, so it is important to understand and leverage them as much as possible. These can involve financial assistance, expertise, lab space, and other resources.
Chapter 6, “Factoring in Public Policy and Perception,” explains how public policy and perception must be understood when commercializing a sustainable chemistry technology. Local and regional governments create laws, while public perception creates buying trends, both of which can significantly impact the success of your business. A concise overview of several regions' regulatory frameworks will help ensure you can generate revenue from your technology without violating these regulations. This is followed by a discussion on how public opinion and attitudes toward environmental concerns affect consumer choices and can even dictate policy. This is especially true in chemistry and materials‐based products where scientific information is often not well understood by the public.
Chapter 7, “Pre‐market Approval of Chemical Substances: How New Chemical Products Are Regulated,” examines a related but distinctly different topic that is often overlooked and poorly understood by the chemical innovator. The chapter addresses how new chemical products are regulated (if at all), research and development exemptions, and the importance of incorporating pre‐market approval into your company's global commercialization strategy. Generic requirements for chemicals, as well as special requirements for specific products including cosmetics, drugs, and food contact substances, will be outlined.
The third part, “Springing into Action,” covers topics that are central to developing and growing your start‐up company in a rational manner. It begins with Chapter 8, “Navigating Supply Chains.” Successful entry to any market is driven by the dynamics of the supply chain and one's ability to navigate the hurdles and create opportunities. Sustainable chemical technologies face additional barriers to adoption as supply chains are often broken or slow. Practical tools to map and understand your supply chain will be presented. This will be followed by methods on how to identify the biggest barriers to your new technology's adoption and strategies for overcoming them.
Chapter 9, “Strategic Partnering,” presents the potential advantages and disadvantages of partnering from the perspectives of both the start‐up and the larger industrial partner along with strategies to mitigate the risks within a partnership. Evaluating, establishing, executing, and finally closing a strategic partnership will be covered. The chapter will conclude with illustrative case studies to showcase examples of effective partnering.
Chapter 10, “Bridging the Gap 1: From Eureka Moment to Validation,” and Chapter 11, “Bridging the Gap 2: From Validation to Pilot Scale‐Up,” are dedicated to describing how you can practically advance your technology from conception to commercial demonstration. Chapter 10 focuses on core technology development activities from the initial innovation in the lab to proving the concept to the point where seed financing is possible. At each stage, the overall team characteristics and required activities of your company will change. The chapter will also discuss how to efficiently de‐risk the technology by identifying bottlenecks so that your product's time to market can be accelerated.
Chapter 11 addresses the many aspects of scaling up your technology to meet market needs. Due to the breadth of these topics, it is divided into two parts. The first discusses required activities before any pilot unit is actually built. These activities include how to access external expertise, safety and commercial considerations, and how to carry out the techno‐economic assessments. Emphasizing the commercial design and understanding the critical parameters as early as possible are key to reducing cost and time. The second part covers the basics of piloting and scaling up from an engineering perspective, process and equipment considerations, and pilot plant location and operations. Safety is paramount, and implementing hazard identification tools to assess risk throughout the process will also be described.
Chapter 12, “Raising Investment/Financing,” addresses various aspects of early‐stage company financing. It explores potential sources of funding typically available at different stages of a company's life cycle and what is exchanged during a financing event. Main investment sources, how they are structured, and the pros and cons of each will be discussed. This is followed by a discussion on investment drivers specific to sustainable chemistry technologies as well as key investment impediments unique to start‐ups in the sector.
Chapter 13, “Operationalizing a Start‐Up Company,” provides an overview of key considerations for start‐ups with a focus on systems and oversight that every successful new company must put into place. Practical information will be given on how to set up, leverage, and manage effective advisory and director boards. This is followed by a discussion on how to set up and run key operational systems including human resources and health and safety. Finally, setting up effective financial systems will be described with further information on making financial projections.
"Success Stories" is the last part of this book and encompasses Chapter 14, “Making an Impact: Sustainable Success Stories.” It contains three vignettes written by entrepreneurs who have lived through some of the commercialization challenges and want to share their experiences. Each contribution summarizes their journey, focusing on the highs and lows and, most importantly, the key lessons that were learned along the way that will likely benefit you. They are intended to serve as testaments to what entrepreneurs in the sustainable chemistry space can achieve when bringing technological advancements to market that deliver economic, environmental, and social benefits.
1.6 Using This Book
There is certainly no requirement that each chapter in this book be read in the order presented. Although the topics are sequenced to build on each other, you are encouraged to skip to sections of most interest at any particular time. Each of the chapters in this book is designed to be used as a stand‐alone information source if so desired. In fact, you will notice many individual topics are covered in multiple chapters, although from different perspectives. This is not to emphasize any particular topic or to cause undue duplication, but rather to show that key topics can take on different forms when presented from alternative points of view. For example, an investment professional often perceives key elements of sustainable chemistry commercialization very differently from an intellectual property specialist or scale‐up engineer. Furthermore, understanding all these various perspectives allows you to better work with these individuals as you bring your technology through the many stages of development and eventually to market.
You may also notice the differing writing styles of the contributors. As editors, we did our best to keep the tone relatively consistent throughout the book, while giving each author the freedom to express their ideas as they see fit. The keen observer may also note that their individual styles often reflect their specialization – sometimes almost stereotypically so! Engineers, marketing specialists, intellectual property professionals, regulatory experts, academics, and generalists often have writing styles consistent with their professions.
The goal of this book is not to be an exhaustive study of any particular topic, but to provide a broad overview of the challenges of commercializing a novel sustainable technology and practical tools to overcome them. References are included in each chapter for additional details on any particular topic of interest.
Bringing a new sustainable technology to market is a hugely demanding activity and is rife with risks and challenges. However, it is also a noble and exciting pursuit, because beyond the financial gains that can be had (and that is certainly a good motivation), the world needs innovative technologies now more than ever. With hard work, success is possible, and we wish you the best on your journey.
Acknowledgments
We are very grateful to all of the authors who provided their expertise in each chapter. Despite having many demands on their time, they each brought so much knowledge and passion to their respective topics. This book would not exist without their incredible efforts.
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Part ILaying the Foundation
2Marketing and Landscape Analysis
Tess Fennelly
GreenSustains, Inc., Minneapolis, MN, USA
2.1 Introduction: Think Marketing
Successfully marketing and commercializing a technology in sustainable chemistry requires the same market‐driven discipline needed to commercialize any other new technology. It is critical to understand who the competition is, what customers need, and how you can successfully differentiate your product, service, or process to those customers.
To begin, we need to understand the concept of “value,” which is a measure of what your technology is worth. This worth could be defined by monetary terms to the paying customer or some other factor beyond actual cash value. Although it would be ideal to use a formula to precisely calculate this measure, no such formula exists. That said, several factors play a key role in influencing a technology's value, including customer needs, distinctive competencies, and competitive offerings. The sweet spot that defines a customer's definition of value is the intersection of these factors (see Figure 2.1).
Once the value to prospective customers is understood, the work to define and segment markets for the proposed technology can begin. Finding and prioritizing market focus is paramount. The following sections cover understanding and mapping customer needs and then segmenting and selecting market segments. This is the definition of being market driven. This requires making important decisions that are informed by customer information, competitive intelligence, and clarity in the early‐stage company's competencies and value proposition.
Figure 2.1 Factors defining value.
Innovators often confuse “sales” with “marketing.” While certainly related, they are not synonymous and have very different mentalities associated with them, as shown in the following table:
Sales approach
Marketing approach
Focused on the needs of the seller and “selling out” projected or existing inventory
Driven by the seller's need to convert a product or process into cash
Profits driven through sales volume
Focused on the needs of the buyer
Consumed with the goal to satisfy customer needs
Profits driven through customer satisfaction
As an innovator, you should aim to have your company on a “think marketing” track.
Success (which certainly includes sales) comes as a result of determining the needs and wants of target segments (a group of customers with a common set of needs) and then adapting to deliver the desired satisfaction more effectively and efficiently than the competition. This is a marketing approach.
Implementing a marketing approach includes many elements and activities. This chapter will present a conceptual framework (known as an “application framework”) to achieve this and offer practical advice for several of the most critical steps. A key “strategic framework” element on selecting market segments is also included. Usable templates are provided so you can apply this process to your early‐stage company or technology.
2.2 Creating a Marketing Plan: The Application Framework
This section introduces the application framework for creating a thorough marketing plan. It is the “database” that includes all the information related to customer needs and competitive offerings. The following are the elements of the framework:
Application framework
Customer needs definition
Market segmentation
Market segment evaluation
Key customer analysis
Driving forces and life cycle analysis
Market structure definition
Industry analysis
Competitor analysis
Competitive “product” analysis
Distinctive competency analysis
Market research
Once complete, the application framework is used for the strategic framework and future decision‐making. The first strategic framework element on selecting market segments and strategic customers is addressed here.
Creating the application framework may seem like a daunting task at first, but it can be readily broken down into a series of manageable steps, as shown in Figure 2.2.
The following sections will examine several of the key elements of the application framework. Sample questionnaires and templates are also included to give innovators a head start in collecting the required information.
2.3 Customer Needs and Mapping
Needs, needs, needs: it may sound redundant, but it is probably the most crucial thing to understand in developing a successful business. You may have a great technology, a strong intellectual property position, and a talented team, but without really understanding the hot buttons of your future customers, you will be doing a “product push,” a slow and often unsuccessful approach. Understanding and delivering on identified customer needs will create a “market pull” and the best path to victorious future business.
That being said, finding out these needs isn't always straightforward. There are a number of obstacles and challenges when engaging with a potential customer. For example, you may do any of the following:
Speak a different language
Have different knowledge levels
Impose your own values on the customer
Have never purchased like a customer
Not know the customer's business as well as you think
Not know the customer's need for, and definition of, sustainability
Think about constraints, not opportunities to satisfy the customer's needs
Become over‐enamored with, and “blinded” by, your technology
Fail to recognize nontechnical and complex product or process attributes
Assume your product is more valuable than it actually is
Figure 2.2 Application framework steps.
Customer needs are internal conditions that motivate their purchases or use of specific products and services. What the customer wants must always be balanced with why they want it. Here is the key message:
We must put ourselves in the customer's shoes to effectively understand their needs.
2.4 Customer Analysis: How to Gather Customer Needs Data
This section will focus on the Key Customer Analysis box in Figure 2.2.
You have an idea of who your customers are, but this may not be true. So, go ahead – get out and talk to your potential customers. The answer is not on your computer, in your lab, or in the conference room. Not until you talk to people will you know whether they are truly a future customer.
This type of research is often called “voice of the customer” (VoC). Many established companies have contracts with external firms to do this work for them. These marketing consultants specialize in running focus groups, mass surveys, primary interviewing, social media mining, etc. While they connect to groups to which the innovator rarely has access, they are necessarily expensive and often beyond the reach of the lean‐operating entrepreneur.
Even if you can afford to outsource this work, don't. You are commercializing a new innovative sustainable technology in the chemical sector. Do the legwork yourself for now.
Each customer interview or conversation is free education and will contribute to your needs database. It is also the beginning of relationship building in the industry. Talking to potential customers yourself will build your skills and provide insight into industry developments, potential new innovations, technical and/or business direction (often resulting in a change in your roadmap), timelines, and sources of revenue. Although you go into these discussions with the goal of finding specific information, they often take unexpected turns and provide surprising and helpful insights that were simply not anticipated.
You may also be surprised by the willingness of many individuals to openly talk about their business needs with you. You will undoubtedly have some rejections when searching for appropriate contacts, but you will come across many people happy to spend time with you, especially if you openly share your market learnings with them. You must remember that it is often in their interest to learn about the latest emerging technologies. You may actually be helping them fulfill their job requirements as well!
To design, develop, and deliver a product with superior customer value, you must have tools and methods to effectively gather and analyze the associated data. The first tool is an interview form that is conversational and captures the different types of customer needs, shown in here with some examples:
Strategic
Operational
Functional
Need for product innovation
Improved sustainability profile
Global growth
Importance of service and relationships
Importance of price
Risk profile
Regional/global supply
Shipping/packaging
Central decision‐making
Total cost reductions
Regulatory knowledge
Environmental services
Process quality control
Technical and customer service
Renewable content
Performance properties (physical, aesthetic, thermal, aging, etc.)
Processability (ease, speed, throughput)
Recyclability
Environment, health, and safety product profile
Problem correction for end‐use
Time is limited during an interview, so your questions should quickly get to the core issue of “What does the customer want?” All product attributes and services the customer is seeking should be captured. If the customer does not mention a known attribute that could be critical, it should be raised as a question.
Although most interviews are likely to occur by phone/videoconference, try to have some in‐person, “face‐to‐face” visits too. They are time‐consuming and may incur travel costs, but the depth of learning (and extent of relationship building) is far greater.
2.4.1 Finding the Right Contacts
One of the first challenges is finding the most appropriate and helpful contacts with whom to set up conversations. Be creative and persistent in looking for contacts of value. Start with the following ideas and expand if needed:
Mine your own contact list.
Ask your network for introductions.
Search for contacts on LinkedIn and Google.
Mine the contacts from trade and industry journals and websites.
Mine conference or trade show attendee lists/panelists.
These are other places to mine for appropriate contacts:
Customer technical visits
Sales calls
Service calls
Customer complaints
Industry experts
Trade journal editors
Suppliers
Annual reports
Websites
2.4.2 The Interview Form
Having a prepared interview form is key to extracting value from a discussion with a potential customer. Obviously, depending on your technology, the questions will be customized to your business, but the sample provided here gives an idea of how to gather data. It can be modified as you see fit.
Sample VoC interview form
Company
Contact
Title
Phone
Location
Location Type
Application Focus
Product Used
Date
Other Comments
There are several important considerations when conducting your interviews:
Don't start with the company's purchasing department. You have a new technology and are trying to learn if and how it fits with the customer. Their technical and market development teams are generally the first to review new technologies, so you should focus on gaining access to this group. Purchasing will get involved down the road or can be the target of subsequent calls (additional interviews).
Use your networks to find the first people to interview. During your interview, ask whether the interviewee would recommend others with whom you could speak. Keep branching out.
Approach it as a conversation, not a formal survey. People generally don't like to participate in surveys but are happy to have informal conversations. Besides, you will learn things you hadn't anticipated by simply talking, rather than surveying. This will more than likely cause you to modify your interview form, which is a good thing. You are already learning what the customers need!
In your opening, offer to share what you have learned in your discussions to date. This can be an attractive reason for someone to speak with you.
Purchase volumes, price, and suppliers are often more delicate subjects. Don't start with that. Build the rapport first.
If someone is unwilling to share volume data when you ask, try “I understand you don't want to tell me the specific volume, but I'm just trying to gauge magnitude. Do you purchase less than $1 million per year but more than $100,000?,” etc.
The same goes for pricing. If you have heard about some pricing information in the industry, but they aren't willing to share this information, you can ask if they are paying more than what you heard: above
x
or under
y
.
Document your discussions
immediately
. It's amazing how fast details fade no matter how astute your memory.
The following is an example of a script to use for your interviews. Again, it is a living document to be revised as you gain more information so that you can refine your questions.
"We are Company Z, which has a new sustainable chemical technology that may have potential as a new X in your market area. We have finished Y testing and have excellent broad‐based results. As we move to further testing/product development/commercialization, we are trying to gain an understanding of which application areas may have needs to which we can tailor properties and performance. May I ask you a few questions? I'm happy to share with you what I've learned in speaking with others in the industry."
1.
What X do you currently use? In what applications?
A:
2.
How did you choose the materials you use now? Who makes the decision to buy or change?
A:
3.
What are the most important requirements for your X?
Technical
Physical form
Renewable content
Efficacy
Durability
Color
Odor
Other
Business
Supplier technical support
Development needs
Product reproducibility
Importance of price
Supplier relationship/reputation
Formulation/testing
Delivery: logistics
4.
How important is sustainability in your decision‐making? What elements of sustainability are most important to you?
A:
5.
Are there any areas where you would like some improvements, need additional performance? For which of these, if any, would you be willing to pay more?
A:
6.
Pricing is always important, but how critical is the cost of X compared to other elements of the formulation or as a percent of the final product?
A:
7.
Who do you consider the best suppliers today? Why? (
If you can get product names and what they pay for it, great
.)
A:
8.
What would it take to consider a new X? How much of current X do you use?
Time
Cost
Proven performance (define)
Other?
A:
9.
What would it take to consider a new X supplier?
Process for approval
Reputation
Portfolio
End‐use knowledge
Other?
A:
10.
Is there any significant trend or issue that you foresee affecting your use of X today or in the near future?
A:
2.5 Customer Needs Mapping
This section will focus on the Customer Needs Mapping box in Figure 2.2.
Ideally at this stage you have accumulated some useful data that can include any of the following:
Customer needs, wants, and buying behaviors
Customer goals, objectives, products, etc.
Changes in needs, forecasts of changes
Market trends and changes
Now it's time to use this data and look for patterns with customer needs mapping. This will lay the groundwork for the next critical step, market segmentation. To begin, divide your customer needs into strategic, operational, and functional needs as previously defined.
Take the time to really think through what you heard. What were the patterns and common needs? Some needs may have been high priority for some customers and lower for others, but there are often commonalities. For example, maybe a group of customers had the functional need of compostability as high and others had it as either a low or “nice to have.” This is where you should be able to start to differentiate needs for groups of customers.
The needs flow chart you develop (see the sample grid shown in Figure 2.3) will be used for every customer, although again the importance of individual customer needs will likely vary.
When using the grid shown in Figure 2.3 for each customer, rank each need on the 1 to 5 scale:
5 – Critically important
3 – Somewhat important
1 – Not important
The next step is to use your grid to create a “map” for each customer interviewed. To do this, map the needs based on your 1 to 5 ranking, drawing lines from one point to the next, as shown in Figure 2.4
