OmegaChem NSF Final Presentation

Interviews conducted in total – 62+38 = 100 CBiRC, Iowa State University Bio-based sustainable chemical intermediates for polymer bio-surfactants, bio-lubricants I-Corps Team Shivani Garg Entrepreneurial Lead Graduate student, 3.5 yrs in biochemistry Bio-based chemical Dr. Basil Nikolau Principal Investigator intermediates Professor, 30 yrs in biochemistry Dr. Peter Keeling I-Corps Mentor Entrepreneur, 30 yrs in biotechnology industry One minute video - http://www.youtube.com/watch?v=xY9nXzlzEHA&feature=youtube_gd Two minute video - http://www.youtube.com/watch?v=ZyGr-eoONqo&feature=youtube_g

Value propositionProblem Solution Features of value proposition • Non- • Sustainable, bio-based • Bi-functional molecules renewable, petroleum replacement • Flexibility in chain length derived feedstock for • Higher performance • Flexibility in branching surfactant, lubricant • Improved cold industry temperature tolerance of detergents, lubricants

Growing market opportunity Bio-based chemicals growing at 15% p.a. $1 trillion petrochemical market $24 bn surfactants

Position in Value Chain OmegaChem

Business Model Canvas 1.0 •Co-create •Production, value proposition yield, quality Problem - Non- • Customer •Existing •Match renewable goodwill and market Polymer - Bio-mass customer‟s feedstock for trust manufacturers, suppliers product specs making polymer • Customer Biotech Solution communities companies, - Contractual (Product) – Bio- scale-up based and • New market - sustainable Novel bio-plastic -Technology • Manufacturing replacement companies? providers facility Features - Bi- •Physical •IP functional and product • Multi-sided -Utility providers • Human customizable •Indirect channel market? resources, •Wholesale capital • Sell bio-based monomers •Fixed – Capital • Added value pricing based onValue•Variable – Manufacturing, prop. hypothesis: Bio-mass Bio-based and sustainable customization of products • Licensing?Customer segment hypothesis: Polymer manufacturers, new marketsTest: Talked to biochemical companies

Value Proposition, Customer Segments: ExperimentsTalked to potential customers Biochemical companies, Market research (15) Senior ScientistVice-President, Technology Development R&D Director Senior Scientist Senior Business Development Manager Research Scientist Market Research Analyst

Value Proposition, Customer Segments: Results Surfactants: new market ($24bn) Monomer Monomer manufacturer “Have you manufacturer considered surfactants Polymer space?” formulator Polymer Surfactant - DSM formulator Formulator Polymer Polymer Surfactant user user user Consumer facing Consumer facing company company Consumer Consumer

Value Proposition, Customer Segments: IterationBusiness Model Canvas 4.0 Problem - Non- renewable •Existing market feedstock Polymer Solution – Bio- manufacturers, Bi based, sustainable otech companies, replacement Surfactants, Features - Bi- Home & functional, Personal Care customizable sector • „Drop-in‟ monomers • New market - • Diacids (chain Novel bio-plastic length: C10-C16) companies? •New functionalities • Multi-sided (cyanide, amine) market?Channel hypothesis: Indirect channel of wholesaleTest: Talked to chemical distributors

Channels: ExperimentsHere’s what we did… Distributors (9) Biochemical industry executives (3)

Channels: Results Pivot: Entry barriers are key Monomer manufacturer DistributorHigh entry barriers Polymer Surfactant Low entry barriers formulator formulator(Petro-based is (Market pull for greenhard to dislodge.) Distributor products) Polymer Surfactant user user “Petro industry Consumer facing wishes that you company guys did not exist!” - Draths Consumer

Channels: IterationBusiness Model Canvas 5.0 Problem - Non- Existing markets renewable feedstock •Polymer manufacturers Solution – Bio- based, sustainable •Biotech companies replacement •Regional supply of Customer in value surfactant raw- chain material Formulator • Avoidance of single companies material sourcing (petro) • Green Existing market •Physical product sectors Features - Bi- •Indirect channel •Surfactants functional, customiz •Wholesale able Distributors •Home & Personal • „Drop-in‟ monomers Care sectorCustomer Relationship Hypothesis: Co-create value propositionTests: Talked to surfactant/lubricant companies

Customer Relationships: Experiments Here’s what we did… Surfactants (4) Lubricants (4) Business Marketing Leader Research Scientist Technical Director Senior Scientist Catalyst Research Principal Scientist Engineer Director, R&D Tribology Section Leader Other bio-based companies (6) Biobased Chemicals Analyst President, Personal Care Program Manager Vice-President, R&D Senior Scientist, R&D Global Head, R&D

Customer Relationships: Results Here’s what we found… Monomer manufacturerDistributor Surfactant users influence Surfactant surfactant formulator formulator decisions, so need to partner with surfactant users Surfactant first! userDecision Green Panel – Focus onMakers reducing petroleum based Consumer facing products company Consumer Market Pull (Sustainability agenda)

Customer Relationships: IterationBusiness Model Canvas 6.0 Problem - Non- •Co-create value renewable feedstock proposition Solution – Bio- • Customer goodwill Customer in value based, sustainable and trust chain replacement • Customer Formulator •Regional supply of communities companies surfactant raw- •Trade-shows, PR material •Conferences, surve • Avoidance of single ys Existing market material sourcing sectors (petro) •Surfactants • Green •High-performance •Lubricants Features - Bi- •Home & Personal functional, Care sector customizable • „Drop-in‟ monomersRevenue Model Hypothesis: Value-based pricing, licensing Tests: 1. Developed a product sheet 2. Talked to 7 surfactant companies 3. Talked to 6 production economics experts

Revenue model: HypothesisPayment Flow Hypothesis Biomass Biomass 15 c/lb* supplier Biomass Range 5-20c/lb Monomer manufacturer Monomer ? Detergent alcohols 80c/lbDistributor Surfactant Formulation ? formulator Formulated Surfactant 90c/lb Surfactant SurfactantDecision user 100 c/lb*Makers Formulated Detergent 100c/lb Consumer facing Detergent 200 c/lb* company 10% Surfactant in Detergent Consumer Product *ICIS Market Intelligence, 201

Revenue model: Result 1Payment Flow Biomass Biomass 15 c/lb* supplier Biomass Range 5-20c/lb Monomer manufacturer Monomer 80 c/lb Detergent alcohols 80c/lbDistributor Surfactant Formulation 90 c/lb formulator Formulated Surfactant 90c/lb Surfactant SurfactantDecision user 100 c/lbMakers Formulated Detergent 100c/lb Consumer facing Detergent 200 c/lb company 10% Surfactant in Detergent Consumer Product *ICIS Market Intelligence, 201

Revenue model: Result 2 Scale up is the key Less than 100 c/lb is achievable Optimized scale up (~500,000 lb/day)“You give us1kg, we can evaluate.” Earlyvangelists

Revenue Model: IterationBusiness Model Canvas 7.0 •Production, yield, quality- Cheapest bio-mass •Match customer‟s suppliers product specs • Constant- Contractual scale- innovation up -Technology providers -Utility providers - Surfactant Users (P&G) •Sell bio-based monomersPartners Hypothesis: Bio-mass suppliers, scale-up, technology • Added value pricing based on customization ofproviders, utility providers, surfactant users products •Create demand by partnering with SurfactantTests: Talked to potential partners Users and then sell to Formulators • Licensing

Partners: HypothesisHere’s what we hypothesized… Market Biomass Research supplier Partners Monomer Start-up manufacturers Incubators Distributor Scale-up Surfactant providers formulator Surfactant Technology Decision user partners Makers Consumer facing company Consumer

Partners: ExperimentsHere’s what we did… Market Start-up Scale-up Technology Research (3) Incubators (4) providers (4) partners (3)

Partners: Iterate Business Model Canvas 8.0 -Market Research Agencies- Start-up incubatorsCheapest bio-mass suppliers - Contractual scale- up -Technology providers -Utility providers - Surfactant Users (P&G)What’s next?State funding (i6 grant)Federal funding (SBIR)

First to Last Business Model Canvas

First CanvasBusiness Model Canvas 1.0 •Co-create •Production, yi value proposition eld, quality Problem - Non- • Customer •Existing •Match renewable goodwill and market Polymer - Bio-mass customer‟s feedstock for trust manufacturers, suppliers product specs making polymer • Customer Biotech Solution communities companies, - Contractual (Product) – Bio- scale-up based and • New market - sustainable Novel bio-plastic -Technology • Manufacturing replacement companies? providers facility Features - Bi- •Physical •IP functional and product • Multi-sided -Utility providers • Human customizable •Indirect channel market? resources, capit •Wholesale al • Sell bio-based monomers •Fixed – Capital • Added value pricing based on •Variable – Manufacturing, Bio-mass customization of products • Licensing?

Final Canvas Business Model Canvas 8.0 Problem - Non- •Co-create value renewable feedstock proposition -Market Research •Production, yiel Solution – Bio- • Customer goodwill Agencies d, quality Customer in value based, sustainable and trust •Match customer‟s chain replacement • Customer- Start-up incubators product specs Formulator •Regional supply of communities • Constant companies surfactant raw- •Trade-shows, PRCheapest bio-mass innovation material •Conferences, suppliers • Avoidance of single surveys Existing market material sourcing - Contractual scale- sectors (petro) up •Surfactants • Green • Manufacturing •High-performance -Technology facility •Physical product •Lubricants providers •IP •Indirect channel Features - Bi- • Human •Wholesale •Home & Personal functional, customiz - Surfactant Users resources, capital Distributors Care sector able (P&G) •IHS (Market Info) • „Drop-in‟ monomers •Sell bio-based monomers •Fixed – Capital •Create demand by partnering with Surfactant •Variable – Manufacturing, Bio-mass Users and then sell to Formulators • Licensing

Evolution of Canvas

Business Model Canvas 1.0 •Co-create •Production, yi value proposition eld, quality Problem - Non- • Customer •Existing •Match renewable goodwill and market Polymer - Bio-mass customer‟s feedstock for trust manufacturers, suppliers product specs making polymer • Customer Biotech Solution communities companies, - Contractual (Product) – Bio- scale-up based and • New market - sustainable Novel bio-plastic -Technology • Manufacturing replacement companies? providers facility Features - Bi- •Physical •IP functional and product • Multi-sided -Utility providers • Human customizable •Indirect channel market? resources, capit •Wholesale al • Sell bio-based monomers •Fixed – Capital • Added value pricing based on •Variable – Manufacturing, Bio-mass customization of products • Licensing?

Business Model Canvas 2.0 Problem - Non- •Co-create •Production, yi value proposition •Existing renewable eld, quality • Customer market Polymer feedstock for •Match goodwill and manufacturers, - Bio-mass making polymer customer‟s trust Biotech suppliers Solution • Customer companies, product specs (Product) – Bio- communities Surfactant - Contractual based and manufacturers scale-up sustainable • Manufacturing replacement • New market - -Technology facility Features - Bi- Novel bio-plastic providers •IP functional and •Physical companies? • Human customizable product -Utility providers resources, • ‘Drop-in’ •Indirect channel • Multi-sided capital monomers •Wholesale market? •SRI (Market • Diacids Info) • Sell bio-based monomers •Fixed – Capital • Added value pricing based on •Variable – Manufacturing, Bio-mass customization of products • Licensing?

Business Model Canvas 3.0 Problem - Non- renewable •Co-create •Production, feedstock value proposition •Existing yield, quality Solution – Bio- • Customer market Polymer - Bio-mass •Match based, sustainable goodwill and manufacturers, suppliers customer‟s replacement trust Biotech product specs Features - Bi- • Customer companies, - Contractual functional, customi communities Surfactant scale-up zable manufacturers • Manufacturing • „Drop-in‟ -Technology facility monomers • New market - providers •IP • Diacids (chain •Physical Novel bio-plastic • Human length: C10-C16) product companies? -Utility providers resources, •New •Indirect channel capital functionalities •Wholesale • Multi-sided •SRI (Market (cyanide, amine) market? Info) •State funding, SBIR funding •Sell bio-based monomers •Fixed – Capital • Added value pricing based on •Variable – Manufacturing, Bio-mass customization of products • Licensing

Business Model Canvas 4.0 Problem - Non- renewable •Co-create •Existing market •Production, feedstock value proposition Polymer yield, quality Solution – Bio- • Customer manufacturers, - Bio-mass •Match based, sustainable goodwill and Biotech suppliers customer‟s replacement trust companies, product specs Features - Bi- • Customer Surfactants, - Contractual functional, communities Home & scale-up customizable Personal Care • Manufacturing • „Drop-in‟ sector -Technology facility monomers providers •IP • Diacids (chain •Physical • New market - • Human length: C10-C16) product Novel bio-plastic -Utility providers resources, capit •New •Indirect channel companies? al functionalities •Wholesale •SRI IHS (cyanide, amine) • Multi-sided (Market Info) market? •State funding, SBIR funding •Sell bio-based monomers •Fixed – Capital • Added value pricing based on •Variable – Manufacturing, Bio-mass customization of products • Licensing

Business Model Canvas 4.3 Problem - Non- Existing markets renewable feedstock •Polymer •Co-create value manufacturers •Production, yiel proposition Solution – Bio- d, quality • Customer based, sustainable •Biotech companies •Match customer‟s goodwill and trust- Bio-mass suppliers replacement product specs • Customer •Local supply of Customer in value communities- Contractual scale- surfactant raw- chain up material Formulator • Avoidance of single companies -Technology material sourcing providers (petro) • Manufacturing • Green Existing market -Utility providers facility •Physical product sectors •IP Features - Bi- •Indirect channel •Surfactants • Human functional, •Wholesale resources, capital customizable Distributors •Home & Personal •IHS (Market Info) • „Drop-in‟ monomers Care sector •Sell bio-based monomers •Fixed – Capital • Added value pricing based on customization of •Variable – Manufacturing, Bio-mass products • Licensing

Business Model Canvas 5.0 Problem - Non- Existing markets renewable feedstock •Polymer •Co-create value manufacturers •Production, proposition Solution – Bio- yield, quality • Customer based, sustainable •Biotech companies •Match customer‟s goodwill and trust- Bio-mass suppliers replacement product specs • Customer •Regional supply of Customer in value communities- Contractual scale- surfactant raw- chain up material Formulator • Avoidance of single companies -Technology material sourcing providers (petro) • Manufacturing • Green Existing market -Utility providers facility •Physical product sectors •IP Features - Bi- •Indirect channel •Surfactants • Human functional, customiz •Wholesale resources, capital able Distributors •Home & Personal •IHS (Market Info) • „Drop-in‟ monomers Care sector •Sell bio-based monomers •Fixed – Capital • Added value pricing based on customization of •Variable – Manufacturing, Bio-mass products • Licensing

Business Model Canvas 6.0 Problem - Non- •Co-create value renewable feedstock proposition Solution – Bio- • Customer goodwill •Production, yiel Customer in value based, sustainable and trust d, quality chain replacement • Customer •Match customer‟s Formulator- Bio-mass suppliers •Regional supply of communities product specs companies surfactant raw- •Trade-shows, PR- Contractual scale- material •Conferences, up • Avoidance of single surveys Existing market material sourcing sectors -Technology (petro) •Surfactants providers • Green • Manufacturing •High-performance facility •Physical product •Lubricants -Utility providers •IP Features - Bi- •Indirect channel • Human •Wholesale •Home & Personal functional, customiz resources, capital Distributors Care sector able •IHS (Market Info) • „Drop-in‟ monomers •Sell bio-based monomers •Fixed – Capital • Added value pricing based on customization of •Variable – Manufacturing, Bio-mass products • Licensing

Business Model Canvas 7.0 Problem - Non- •Co-create value renewable feedstock proposition •Production, yiel Solution – Bio- • Customer goodwill d, quality Customer in value- Cheapest bio-mass based, sustainable and trust •Match customer‟s chain suppliers replacement • Customer product specs Formulator •Regional supply of communities • Constant companies- Contractual scale- surfactant raw- •Trade-shows, PR innovation up material •Conferences, • Avoidance of single surveys Existing market -Technology material sourcing sectors providers (petro) •Surfactants • Green -Utility providers • Manufacturing •High-performance facility •Physical product •Lubricants - Surfactant Users •IP Features - Bi- •Indirect channel • Human •Wholesale •Home & Personal (P&G) functional, customiz resources, capital Distributors Care sector able •IHS (Market Info) • „Drop-in‟ monomers •Sell bio-based monomers • Added value pricing based on customization of •Fixed – Capital products •Variable – Manufacturing, Bio-mass •Create demand by partnering with Surfactant Users and then sell to Formulators • Licensing

Business Model Canvas 8.0 Problem - Non- •Co-create value -Market Research renewable feedstock proposition Agencies •Production, yiel Solution – Bio- • Customer goodwill d, quality Customer in value based, sustainable and trust- Start-up incubators •Match customer‟s chain replacement • Customer product specs Formulator •Regional supply of communitiesCheapest bio-mass • Constant companies surfactant raw- •Trade-shows, PR suppliers innovation material •Conferences, surve • Avoidance of single ys - Contractual scale- Existing market material sourcing up sectors (petro) •Surfactants • Green -Technology • Manufacturing •High-performance providers facility •Physical product •Lubricants •IP Features - Bi- •Indirect channel -Utility providers • Human •Wholesale •Home & Personal functional, resources, capital Distributors Care sector customizable - Surfactant Users •IHS (Market Info) • „Drop-in‟ monomers (P&G) •Sell bio-based monomers •Fixed – Capital •Create demand by partnering with Surfactant •Variable – Manufacturing, Bio-mass Users and then sell to Formulators • Licensing

OmegaChem NSF Final Presentation

by steve blank on May 24, 2012

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