OmegaChem NSF Final Presentation

Bio-based sustainable chemical intermediates for polymer bio-surfactants, bio-lubricants

Shivani GargEntrepreneurial LeadGraduate student, 3.5 yrs in biochemistry

Dr. Basil NikolauPrincipal InvestigatorProfessor, 30 yrs in biochemistry

Dr. Peter KeelingI-Corps MentorEntrepreneur, 30 yrs in biotechnology industry

I-Corps Team

Bio-based chemicalintermediates

CBiRC, Iowa State University

Interviews conducted in total – 62+38 = 100

Two minute video - http://www.youtube.com/watch?v=ZyGr-eoONqo&feature=youtube_gdataOne minute video - http://www.youtube.com/watch?v=xY9nXzlzEHA&feature=youtube_gdata

http://www.youtube.com/watch?v=ZyGr-eoONqo&feature=youtube_gdata

http://www.youtube.com/watch?v=ZyGr-eoONqo&feature=youtube_gdata

http://www.youtube.com/watch?v=xY9nXzlzEHA&feature=youtube_gdata

http://www.youtube.com/watch?v=xY9nXzlzEHA&feature=youtube_gdata

Value proposition

Problem

• Non-renewable, petroleum derived feedstock for surfactant, lubricant industry

Solution

• Sustainable, bio-based replacement

• Higher performance

• Improved cold temperature tolerance of detergents, lubricants

Features of value proposition

• Bi-functional molecules

• Flexibility in chain length

• Flexibility in branching

$1 trillion petrochemical market

Bio-based chemicals growing at 15% p.a.

$24 bnsurfactants

Growing market opportunity

Position in Value Chain

OmegaChem

- Bio-mass suppliers

- Contractual scale-up

- Technology providers

-Utility providers

• Production, yield, quality• Match customer’s

product specs

• Manufacturin

g facility• IP

• Human resources,

capital

Problem - Non-

renewable feedstock for

making polymer Solution

(Product) – Bio-based and

sustainable replacement

Features - Bi-functional and customizable

• Co-create value

proposition• Customer goodwill and

trust• Customer communities

• Physical product • Indirect

channel • Wholesale

• Existing market Polymer

manufacturers, Biotech

companies,

• New market -Novel bio-

plastic companies?

• Multi-sided market?

• Sell bio-based monomers• Added value pricing based on

customization of products• Licensing?

• Fixed – Capital• Variable – Manufacturing, Bio-

mass

Business Model Canvas 1.0

Value prop. hypothesis: Bio-based and sustainableCustomer segment hypothesis: Polymer manufacturers, new marketsTest: Talked to biochemical companies

Talked to potential customers

Value Proposition, Customer Segments: Experiments

Biochemical companies, Market research (15)

Market Research Analyst

R&D Director

Research Scientist

Senior ScientistVice-President, Technology Development Senior Scientist

Senior Business Development Manager

Surfactants: new market ($24bn)Monomer

manufacturer

Surfactant Formulator

Polymerformulator

Polymer user

Surfactant user

Consumer facingcompany

Consumer

Value Proposition, Customer Segments: Results

Monomer manufacturer

Polymerformulator

Polymer user


Consumer

“Have you considered surfactants

space?” - DSM

Problem - Non-renewable feedstock

Solution – Bio-based,


Features - Bi-functional,

customizable• ‘Drop-in’

monomers• Diacids (chain length: C10-C16)

• New functionalities (cyanide, amine)



companies,Surfactants,

Home & Personal Care

sector


plastic companies?


Business Model Canvas 4.0Value Proposition, Customer Segments: Iteration

Channel hypothesis: Indirect channel of wholesaleTest: Talked to chemical distributors

Here’s what we did…

Channels: Experiments

Distributors (9)

Biochemical industry executives (3)

Pivot: Entry barriers are key

Distributor

Distributor


Surfactant formulator

Polymerformulator

Polymer user

Surfactant user


Consumer

Channels: Results

High entry barriers(Petro-based is hard to dislodge.)

Low entry barriers(Market pull for green products)

“Petro industry wishes that you

guys did not exist!”

- Draths

Business Model Canvas 5.0Problem - Non-

renewable feedstock

Solution – Bio-based, sustainable

replacement•Regional supply of surfactant raw-

material• Avoidance of

single material sourcing (petro)• Green



monomers

Existing markets• Polymer

manufacturers

• Biotech companies

Customer in value chainFormulator companies

Existing market sectors

• Surfactants

• Home & Personal Care sector

• Physical product

•Indirect channel • Wholesale

Distributors

Channels: Iteration

Customer Relationship Hypothesis: Co-create value propositionTests: Talked to surfactant/lubricant companies

Here’s what we did…

Catalyst Research Engineer

Tribology Section Leader

Research Scientist

Senior Scientist

Principal Scientist

Director, R&D

Program Manager

Biobased Chemicals Analyst

Vice-President, R&D

Business Marketing Leader

President, Personal Care

Global Head, R&D

Lubricants (4)Surfactants (4)

Other bio-based companies (6)

Customer Relationships: Experiments

Senior Scientist, R&D

Technical Director

Here’s what we found…

Distributor



Surfactant user


ConsumerMarket Pull(Sustainability

agenda)

Surfactant users influence surfactant formulator decisions, so need to partner with surfactant users first!

Green Panel – Focus on reducing petroleum based products

Customer Relationships: Results

Decision Makers

Business Model Canvas 6.0Problem - Non-

renewable feedstock




single material sourcing (petro)• Green• High-

performance



monomers



• Surfactants

• Lubricants


•Co-create value proposition

• Customer goodwill and trust• Customer communities

• Trade-shows, PR• Conferences,

surveys

Customer Relationships: Iteration

Revenue Model Hypothesis: Value-based pricing, licensing Tests: 1. Developed a product sheet

2. Talked to 7 surfactant companies3. Talked to 6 production economics

experts

Payment Flow Hypothesis

Distributor



Surfactant user


Consumer

Revenue model: Hypothesis

Biomass supplier Biomass 15

c/lb*Biomass Range 5-

20c/lb

Monomer ?Detergent alcohols

80c/lb

Formulation ?Formulated

Surfactant 90c/lb

Surfactant 100 c/lb*

Formulated Detergent 100c/lb

Detergent 200 c/lb*

10% Surfactant in Detergent

Product

Decision Makers

*ICIS Market Intelligence, 2012

Payment Flow

Distributor



Surfactant user


Consumer

Revenue model: Result 1

Biomass supplier Biomass 15

c/lb*Biomass Range 5-

20c/lb

Monomer 80 c/lbDetergent alcohols

80c/lb

Formulation 90 c/lbFormulated

Surfactant 90c/lb

Surfactant 100 c/lb

Formulated Detergent 100c/lb

Detergent 200 c/lb

10% Surfactant in Detergent

Product

Decision Makers

*ICIS Market Intelligence, 2012

Scale up is the key

Revenue model: Result 2

Less than 100 c/lb is achievableOptimized scale up (~500,000 lb/day)

Earlyvangelists

“You give us 1kg, we

can evaluate.”



product specs • Constant

innovation


customization of products• Create demand by partnering with

Surfactant Users and then sell to Formulators• Licensing

- Cheapest bio-mass suppliers



-Utility providers

- Surfactant Users (P&G)

Revenue Model: Iteration

Partners Hypothesis: Bio-mass suppliers, scale-up, technology providers, utility providers, surfactant usersTests: Talked to potential partners

Here’s what we hypothesized…

Distributor

Partners


Surfactant user


Consumer

Partners: Hypothesis

Biomass supplier

Decision Makers


sStart-up

Incubators

Market Research

Scale-up providers

Technology partners

Here’s what we did…Start-up

Incubators (4)

Market Research

(3)

Scale-up providers

(4)

Technology partners

(3)

Partners: Experiments

Business Model Canvas 8.0-Market Research

Agencies

- Start-up incubators

Cheapest bio-mass suppliers



-Utility providers


Partners: Iterate

What’s next?State funding (i6 grant)Federal funding (SBIR)

First to Last Business Model Canvas




-Utility providers


product specs

• Manufacturin

g facility• IP


capital

Problem - Non-






• Co-create value







companies,


plastic companies?





mass

Business Model Canvas 1.0First Canvas




innovation






performance



monomers

• Sell bio-based monomers• Create demand by partnering with


• Manufacturing

facility• IP


capital• IHS (Market

Info)

-Market Research Agencies








• Surfactants

• Lubricants


• Fixed – Capital• Variable – Manufacturing, Bio-mass




surveys



Distributors

Final Canvas

Evolution of Canvas




-Utility providers


product specs

• Manufacturin

g facility• IP


capital

Problem - Non-






• Co-create value







companies,


plastic companies?





mass





-Utility providers


product specs

• Manufacturin

g facility• IP


capital• SRI (Market

Info)

Problem - Non-





Features - Bi-functional and customizable• ‘Drop-in’

monomers• Diacids

• Co-create value







companies,Surfactant

manufacturers


plastic companies?





mass





-Utility providers


product specs

• Manufacturin

g facility• IP


capital• SRI (Market

Info)








• Co-create value







companies,Surfactant

manufacturers


plastic companies?


• State funding, SBIR funding • Sell bio-based monomers• Added value pricing based on

customization of products• Licensing


mass





-Utility providers


product specs

• Manufacturin

g facility• IP


capital• SRI IHS

(Market Info)








• Co-create value







companies,Surfactants,

Home & Personal Care

sector


plastic companies?


• State funding, SBIR funding • Sell bio-based monomers• Added value pricing based on



mass




product specs



replacement• Local supply of

surfactant raw-material

• Avoidance of single material sourcing (petro)• Green



monomers



• Manufacturing

facility• IP



Info)




-Utility providers


manufacturers




• Surfactants



• Co-create value





Distributors



product specs





single material sourcing (petro)• Green



monomers



• Manufacturing

facility• IP



Info)




-Utility providers


manufacturers




• Surfactants



• Co-create value





Distributors



product specs






performance



monomers



• Manufacturing

facility• IP



Info)




-Utility providers



• Surfactants

• Lubricants






surveys



Distributors




innovation






performance



monomers• Sell bio-based monomers• Added value pricing based on

customization of products• Create demand by partnering with


• Manufacturing

facility• IP



Info)

- Cheapest bio-mass suppliers



-Utility providers




• Surfactants

• Lubricants






surveys



Distributors




innovation






performance



monomers

• Sell bio-based monomers• Create demand by partnering with


• Manufacturing

facility• IP



Info)

-Market Research Agencies





-Utility providers




• Surfactants

• Lubricants






surveys



Distributors

Education

OmegaChem NSF Final Presentation