Bio-based chemicals for sustainable polymer and surfactant industries
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1) The document describes an I-Corps team exploring the development of bio-based chemical intermediates for polymer, bio-surfactants, and bio-lubricants. 2) The value proposition is to provide sustainable, bio-based replacements for non-renewable petroleum-derived feedstocks used in surfactants and lubricants with improved performance features. 3) Interviews with potential customers revealed the largest market opportunity is in surfactants, so the team pivoted their focus to developing drop-in monomers for the $24 billion surfactant market.
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Bio-based chemicals for sustainable polymer and surfactant industries
- 1. 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
- 2. Value proposition Problem 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
- 3. Growing market opportunity Bio-based chemicals growing at 15% p.a. $1 trillion petrochemical market $24 bn surfactants
- 4. Position in Value Chain OmegaChem
- 5. 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 on Value•Variable – Manufacturing, prop. hypothesis: Bio-mass Bio-based and sustainable customization of products • Licensing? Customer segment hypothesis: Polymer manufacturers, new markets Test: Talked to biochemical companies
- 6. Value Proposition, Customer Segments: Experiments Talked to potential customers Biochemical companies, Market research (15) Senior Scientist Vice-President, Technology Development R&D Director Senior Scientist Senior Business Development Manager Research Scientist Market Research Analyst
- 7. 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
- 8. Value Proposition, Customer Segments: Iteration Business 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 wholesale Test: Talked to chemical distributors
- 9. Channels: Experiments Here’s what we did… Distributors (9) Biochemical industry executives (3)
- 10. Channels: Results Pivot: Entry barriers are key Monomer manufacturer Distributor High entry barriers Polymer Surfactant Low entry barriers formulator formulator (Petro-based is (Market pull for green hard to dislodge.) Distributor products) Polymer Surfactant user user “Petro industry Consumer facing wishes that you company guys did not exist!” - Draths Consumer
- 11. Channels: Iteration Business 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 sector Customer Relationship Hypothesis: Co-create value proposition Tests: Talked to surfactant/lubricant companies
- 12. 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
- 13. Customer Relationships: Results Here’s what we found… Monomer manufacturer Distributor Surfactant users influence Surfactant surfactant formulator formulator decisions, so need to partner with surfactant users Surfactant first! user Decision Green Panel – Focus on Makers reducing petroleum based Consumer facing products company Consumer Market Pull (Sustainability agenda)
- 14. Customer Relationships: Iteration Business 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‟ monomers Revenue 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
- 15. Revenue model: Hypothesis Payment Flow Hypothesis Biomass Biomass 15 c/lb* supplier Biomass Range 5-20c/lb Monomer manufacturer Monomer ? Detergent alcohols 80c/lb Distributor Surfactant Formulation ? formulator Formulated Surfactant 90c/lb Surfactant Surfactant Decision 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
- 16. Revenue model: Result 1 Payment Flow Biomass Biomass 15 c/lb* supplier Biomass Range 5-20c/lb Monomer manufacturer Monomer 80 c/lb Detergent alcohols 80c/lb Distributor Surfactant Formulation 90 c/lb formulator Formulated Surfactant 90c/lb Surfactant Surfactant Decision 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
- 17. 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 us 1kg, we can evaluate.” Earlyvangelists
- 18. Revenue Model: Iteration Business 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 monomers Partners Hypothesis: Bio-mass suppliers, scale-up, technology • Added value pricing based on customization of providers, utility providers, surfactant users products •Create demand by partnering with Surfactant Tests: Talked to potential partners Users and then sell to Formulators • Licensing
- 19. Partners: Hypothesis Here’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
- 20. Partners: Experiments Here’s what we did… Market Start-up Scale-up Technology Research (3) Incubators (4) providers (4) partners (3)
- 21. Partners: Iterate Business Model Canvas 8.0 -Market Research Agencies - Start-up incubators Cheapest bio-mass suppliers - Contractual scale- up -Technology providers -Utility providers - Surfactant Users (P&G) What’s next? State funding (i6 grant) Federal funding (SBIR)
- 22. First to Last Business Model Canvas
- 23. First 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?
- 24. 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, PR Cheapest 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
- 26. 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?
- 27. 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?
- 28. 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
- 29. 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
- 30. 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
- 31. 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
- 32. 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
- 33. 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
- 34. 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 communities Cheapest 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
Editor's Notes
- Then I will say that until now, we had been focusing on Tech Development and Integrated Bio/Chem companies like DSM, Elevance, Solazyme. After talking to some of these companies, we realized that we need to shift our focus!
- CS - We hope to determine that if our product/value proposition matches their needs.
- This week’s changes are highlighted in dark blue (IHS instead of SRI, and home and personal care sector also added).
- Main entry barriersCostPerformance as compared to existing surfactantsScout new technology viaInternet searchingNetworkingTrade magazines
- EthanolDMFLacticBi-functional fatty acidScale (T/day)500,0001b/day600,000 lb/day300,000 lb/day?Feedstock15 c/lb19 c/lb16 c/lb15 c/lbProcessing 2 c/lb26 c/lb25 c/lb?Capital 1 c/lb2 c/lb41 c/lb?Other 3 c/lb15 c/lb39 c/lb?MSP (c/lb)21 c/lb62 c/lb120 c/lb< 100 c/lb
- CS - We hope to determine that if our product/value proposition matches their needs.
- CS - We hope to determine that if our product/value proposition matches their needs.
- CS - We hope to determine that if our product/value proposition matches their needs.
- CS - We hope to determine that if our product/value proposition matches their needs.
- This week’s changes are highlighted in dark blue (IHS instead of SRI, and home and personal care sector also added).