Latest / Lab to Market Leadership with Chris Reichhelm / How to Scale Chemical Engineering Startups | Peter J. Nieuwenhuizen PhD

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How to Scale Chemical Engineering Startups | Peter J. Nieuwenhuizen PhD · Lab to Market Leadership with Chris Reichhelm

• 0:00
  Peter J. Nieuwenhuizen: In many ways, I think corporates are not the logical partners for startups and scale-ups and, um, and, um, , we, we, this is the other, this is the we of the, of the, of the, of the small startups.
• 0:19
  Peter J. Nieuwenhuizen: We really have to build our markets on our own.
• 0:24
  Peter J. Nieuwenhuizen: Now that's, is that, is that black and white?
• 0:27
  Peter J. Nieuwenhuizen: Probably, probably not, but I think we have to be more mindful of those contradictions.
• 0:36
  Chris Reichhelm: Welcome to the Lab to Market Leadership podcast.
• 0:39
  Chris Reichhelm: Too many advanced science and engineering companies fail to deliver their innovations from the lab to the market.
• 0:46
  Chris Reichhelm: We're on a mission to change that.
• 0:48
  Chris Reichhelm: My name is Chris Reichhelm and I'm the founder and CEO of Deep Tech Leaders.
• 0:52
  Chris Reichhelm: Each week we speak with Some of the world's leading entrepreneurs, investors, corporates, and policy makers about what it takes to succeed on the lab to market journey.
• 1:03
  Chris Reichhelm: Join us.
• 1:04
  Chris Reichhelm: There are so many wonderful chemistry and chemical engineering related initiatives, uh, and startups, uh, in the market today.
• 1:12
  Chris Reichhelm: Everything from the tackling of decarbonization to the development of novel plastic and plastic material to energy storage and battery technology, all of it involves chemistry and there are wonderful innovations taking place.
• 1:28
  Chris Reichhelm: However, so few of these companies successfully navigate their way from lab to market.
• 1:36
  Chris Reichhelm: And as we've done on this show a number of times, I want to find out why.
• 1:40
  Chris Reichhelm: We want to understand why.
• 1:43
  Chris Reichhelm: Today, helping me with that challenge is a guy named Peter Nieuwenhuizen.
• 1:47
  Chris Reichhelm: Peter is a, uh, an impressive chemicals executives.
• 1:51
  Chris Reichhelm: He was CTO of AkzoNobel, uh, one of the world's largest chemicals companies.
• 1:57
  Chris Reichhelm: He was also CTO of Enerkem.
• 2:00
  Chris Reichhelm: Uh, one of the world's most well funded, uh, uh, chemical engineering companies based in Canada.
• 2:06
  Chris Reichhelm: And he was instrumental in the setting up of one of Europe's leading bioeconomy funds, a 300 million fund, looking at, uh, sustainable chemistry, uh, amongst other things.
• 2:18
  Chris Reichhelm: And today, Peter sits on the boards of numerous, uh, chemistry and chemical engineering companies.
• 2:23
  Chris Reichhelm: I want to talk with him about how he sees the history of this space, the development of it.
• 2:29
  Chris Reichhelm: Where are the challenges?
• 2:31
  Chris Reichhelm: What are we doing right?
• 2:33
  Chris Reichhelm: And what do we still have to get better at in order to bring more of these companies from lab to market?
• 2:38
  Chris Reichhelm: This is going to be a great session.
• 2:40
  Chris Reichhelm: I hope you enjoy.
• 2:41
  Chris Reichhelm: Let's get into it.
• 2:46
  Chris Reichhelm: Peter Nieuwenhuizen thank you so much for joining me.
• 2:51
  Peter J. Nieuwenhuizen: Thank you, Chris.
• 2:51
  Peter J. Nieuwenhuizen: Uh, very well said my last name there.
• 2:56
  Chris Reichhelm: As you know, I've been rehearsing it.
• 2:58
  Chris Reichhelm: Um, Peter, you've got a really unique, and Holistic Perspective, I think, on the chemistry and chemical engineering industry.
• 3:09
  Chris Reichhelm: Uh, you've worked successfully at very senior level, CTO level, within large chemistry groups like AkzoNobel.
• 3:18
  Chris Reichhelm: You've been part of some of the best funded chemistry and chemical engineering startups again as CTO.
• 3:24
  Chris Reichhelm: I'm thinking of Enerkem in particular.
• 3:27
  Chris Reichhelm: You've had a hand in, uh, well, a foundational hand in setting up, uh, one of the largest bioeconomy funds in Europe.
• 3:36
  Chris Reichhelm: And of course you continue to participate by serving on the boards of young advanced chemistry and chemical engineering companies.
• 3:43
  Chris Reichhelm: And so I'm very keen to have this conversation with you today.
• 3:47
  Chris Reichhelm: And in particular, Peter, to get your view on how you see the development of novel chemistry and chemical engineering companies in Europe and around the world.
• 4:01
  Chris Reichhelm: Are we doing well?
• 4:02
  Chris Reichhelm: Are we not doing well?
• 4:04
  Chris Reichhelm: What's your opinion?
• 4:05
  Peter J. Nieuwenhuizen: Yes.
• 4:06
  Peter J. Nieuwenhuizen: Yes.
• 4:07
  Peter J. Nieuwenhuizen: Well, thanks and thanks for, you know, a summary of my career.
• 4:12
  Peter J. Nieuwenhuizen: I feel very flattered to have been invited.
• 4:16
  Peter J. Nieuwenhuizen: Um, it's super, this is a super important and good question.
• 4:22
  Peter J. Nieuwenhuizen: How are we doing?
• 4:24
  Peter J. Nieuwenhuizen: Well, not in the last place, because it is so important that we, uh, that we see a transition in the chemical industry from You know, what of course has been chiefly a fossil industry, almost an appendix of the petrochemical industry, um, to something, uh, you know, for, for which it definitely has the capability, something that supports a circular economy that is, that's ultimately the transition that we have to make.
• 4:56
  Peter J. Nieuwenhuizen: Um, I think the past few years have been, have been tough.
• 5:02
  Peter J. Nieuwenhuizen: Um, I've, I've had the, um, let's say the pleasure, maybe even the honor to work very closely with what I think is a, is a very promising startup.
• 5:15
  Peter J. Nieuwenhuizen: called BioBTX here in the Netherlands.
• 5:17
  Peter J. Nieuwenhuizen: So it intends to produce BTX, benzene, toluene, and xylene from plastic waste and biomass hence the bio.
• 5:28
  Peter J. Nieuwenhuizen: We closed that funding round for 18 million euros.
• 5:35
  Peter J. Nieuwenhuizen: Uh, last, uh, last July.
• 5:38
  Peter J. Nieuwenhuizen: And to me, that moment more or less felt like the bottom of, um, you know, of a, of a period of stagnation more widely, not just in the chemical industry, um, but certainly also for chemical startups and scale ups.
• 5:56
  Peter J. Nieuwenhuizen: And there's a little bit of a difference we have to later talk about that between startups and, and scale ups.
• 6:03
  Peter J. Nieuwenhuizen: So it's been, it's been difficult.
• 6:04
  Peter J. Nieuwenhuizen: Um, I think we also have grown up as, uh, you know, investors, supporters, um, facilitators of, um, chemistry and chemical engineering startups and scale ups.
• 6:22
  Peter J. Nieuwenhuizen: Um, we've got to maybe a bit more cynical, uh, certainly, certainly more, more.
• 6:33
  Peter J. Nieuwenhuizen: Uh, wanting to, you know, double check our due diligences before, before jumping into a big story.
• 6:40
  Peter J. Nieuwenhuizen: There have been some big failures.
• 6:43
  Peter J. Nieuwenhuizen: Um, does that change the need for change?
• 6:49
  Peter J. Nieuwenhuizen: No, no, it doesn't.
• 6:51
  Peter J. Nieuwenhuizen: Um, and, uh, the, uh, the fundraising like for BioBTX shows that there is still willingness and ability.
• 7:00
  Peter J. Nieuwenhuizen: To go where we need to go.
• 7:02
  Peter J. Nieuwenhuizen: So that, that is my, that is my sense.
• 7:04
  Peter J. Nieuwenhuizen: I think a more mature, uh, maybe a little bit less starry eyed, um, uh, way of, uh, of, of looking at, um, at this, at this arena.
• 7:16
  Peter J. Nieuwenhuizen: It is.
• 7:17
  Peter J. Nieuwenhuizen: You know, it's not for the faint of heart.
• 7:19
  Peter J. Nieuwenhuizen: I think we also have to be mindful of that.
• 7:22
  Peter J. Nieuwenhuizen: It is not for the faint of heart.
• 7:24
  Peter J. Nieuwenhuizen: You gotta know what you're doing.
• 7:26
  Peter J. Nieuwenhuizen: And it's probably one of the hardest areas for venture capital and, you know, corporate capital to be deployed.
• 7:34
  Chris Reichhelm: Why is it so difficult?
• 7:36
  Chris Reichhelm: Where do you think the real difficulty lies here?
• 7:40
  Peter J. Nieuwenhuizen: So, um, I think this is, you know, the old fashioned, uh, Porters, uh, uh, Five Forces Model.
• 7:49
  Peter J. Nieuwenhuizen: Um, there are very significant barriers of entry and in fact, the barriers of entry into the chemical industry have probably gotten more, gotten higher in the last
• 8:00
  Chris Reichhelm: mm-hmm
• 8:00
  Peter J. Nieuwenhuizen: 15 to 20 years.
• 8:03
  Peter J. Nieuwenhuizen: Um.
• 8:04
  Peter J. Nieuwenhuizen: There is the positive in terms of an entry barrier that there is change.
• 8:08
  Peter J. Nieuwenhuizen: Um, so there's a society, there is a, there is a economic environment that is looking for new technologies, technologies with less harmful chemicals, technologies, uh, which are circular with lower carbon footprint.
• 8:24
  Peter J. Nieuwenhuizen: So that's, I think, the positive.
• 8:26
  Peter J. Nieuwenhuizen: That's where it has gotten easier.
• 8:28
  Peter J. Nieuwenhuizen: Um, but it definitely hasn't gotten easier in the sense that, um, you know, the, the technology itself, it's, it's very sophisticated, um, to be successful, you, you can't just have a good idea, you also need to scale it and scaling is costly.
• 8:49
  Peter J. Nieuwenhuizen: This is something certainly we've seen at Enerkem, but the same thing is here at, uh, at BioBTX.
• 8:56
  Peter J. Nieuwenhuizen: Um, and the established companies have gotten bigger and essentially the regulation that is pushing forward, um, the need for new technology also makes it harder for new entrants to get in.
• 9:17
  Chris Reichhelm: Why?
• 9:18
  Peter J. Nieuwenhuizen: So it's a, so it's a, um, so it's, so it's a, it, you know, in many ways it's, it's high, it's high entry barriers.
• 9:25
  Chris Reichhelm: Yeah.
• 9:26
  Peter J. Nieuwenhuizen: All around.
• 9:28
  Chris Reichhelm: But why is the, why is the regulator making that harder for the new entrants?
• 9:33
  Chris Reichhelm: They want to see some change, they're demanding change, and if you'd like, a lot of the startups are reacting to that by trying to develop novel platforms that are going to support that change.
• 9:48
  Chris Reichhelm: Do you think the regulators are making it even harder for these startups then to fulfill that because of all of the other requirements they're placing on it?
• 9:58
  Peter J. Nieuwenhuizen: So paradoxically, the, the, the regulator has learned that what it allowed into the market.
• 10:06
  Chris Reichhelm: Yeah,
• 10:06
  Peter J. Nieuwenhuizen: explicitly or implicitly, because sometimes there wasn't even any regulation.
• 10:10
  Peter J. Nieuwenhuizen: What it allowed into the market 25 years ago, we don't want that anymore.
• 10:16
  Peter J. Nieuwenhuizen: So now, for a chemical to be allowed into the market, you have to show all kinds of performance, or better, no problematic performance, biodegradation, not toxic and not, not CMR.
• 10:34
  Peter J. Nieuwenhuizen: Um, when I was in AkzoNobel, we had a product safety and regulatory affairs department.
• 10:41
  Peter J. Nieuwenhuizen: I, it, it reported to me.
• 10:43
  Peter J. Nieuwenhuizen: Where we had 80 people on a full time basis.
• 10:48
  Peter J. Nieuwenhuizen: Um, now granted we had 25 different, I would say, you know, technology market combinations, so you have to divide that a little bit by, you know, By 25, but you can understand that you, you're basically talking about three people for a particular technology that are full time working on the product safety and regulatory affairs matters.
• 11:11
  Peter J. Nieuwenhuizen: If you're then a startup or a scale up, that is not the type of funding that you, that you have.
• 11:16
  Peter J. Nieuwenhuizen: So on the one hand, this is where we want to go.
• 11:20
  Peter J. Nieuwenhuizen: Yes, absolutely.
• 11:21
  Peter J. Nieuwenhuizen: We need regulation in order to clean up some of the mistakes of the past, but it.
• 11:26
  Peter J. Nieuwenhuizen: It can't be the kind of regulation that then becomes a huge barrier of entry to the, uh, to the entrance.
• 11:34
  Chris Reichhelm: And as a CTO, you, you cannot, sorry, go on.
• 11:39
  Chris Reichhelm: You cannot afford it.
• 11:40
  Chris Reichhelm: You would say.
• 11:40
  Peter J. Nieuwenhuizen: Yeah.
• 11:41
  Peter J. Nieuwenhuizen: You cannot afford as a, a, a, as a, as a chemistry startup not to work in the regulatory fair space so this is actually one of those things you have to do and it's so believed that some of the best ones are doing this is be very mindful, very conscious about pulling that kind of knowledge in.
• 12:01
  Chris Reichhelm: I mean, as a CTO, a very experienced CTO, you'll know all about product development in a startup capacity.
• 12:08
  Chris Reichhelm: How does one go about developing the platform itself whilst also trying to Cater for the product safety and the regulatory environment into which this is going to be going.
• 12:25
  Chris Reichhelm: Is it possible to develop along what are, I'm sure, very stringent lines?
• 12:30
  Chris Reichhelm: And those stringent lines are in place.
• 12:32
  Chris Reichhelm: The regular, you know, the regulatory piece serves a real, uh, uh, objective there.
• 12:38
  Chris Reichhelm: But how difficult is it to develop the, the platform whilst also trying to bear in mind The regulatory requirements.
• 12:50
  Peter J. Nieuwenhuizen: So in in principle, this, in principle, this is possible.
• 12:54
  Peter J. Nieuwenhuizen: It, it is, it is, I would say merely that's a big, merely, merely a matter of resources.
• 13:03
  Peter J. Nieuwenhuizen: And this is, uh, this is also where, uh, yeah, we, we, we have, we, we have to have to grow up.
• 13:10
  Peter J. Nieuwenhuizen: There has to be a portion of the funding that has to be allocated to product safety and regulatory affairs.
• 13:20
  Peter J. Nieuwenhuizen: It, that's just what it is.
• 13:22
  Peter J. Nieuwenhuizen: And, and I think this has to come from the startups and the scale ups, they have to put that forward mindfully, but it also has to come from the potential investors, uh, they have to put forward in the conversation, okay, what is needed to bring this to success?
• 13:38
  Peter J. Nieuwenhuizen: Have you thought about sufficient regulatory support?
• 13:43
  Peter J. Nieuwenhuizen: Um, and yeah, I think sometimes we have, we have overlooked that, but there are brilliant examples out there.
• 13:49
  Peter J. Nieuwenhuizen: Um, so I'm, I'm very honored to be chair of the board of, uh, Itaconix.
• 13:55
  Peter J. Nieuwenhuizen: And, um, they're developing ingredients that go into the cleaning space.
• 13:59
  Peter J. Nieuwenhuizen: This is a very important regulatory space and they just do a brilliant job in making sure they have the support and they take the time because it's not just, it's not just about having.
• 14:13
  Peter J. Nieuwenhuizen: Having people doing the right work, you also have to give it time.
• 14:17
  Peter J. Nieuwenhuizen: And of course, time is simply cash out.
• 14:20
  Peter J. Nieuwenhuizen: It means that until you have an approval, you cannot sell this, uh, this material, or at least you cannot sell it in that, uh, uh, in that jurisdiction.
• 14:30
  Chris Reichhelm: Yeah.
• 14:31
  Peter J. Nieuwenhuizen: So absolutely, this is possible, but it, it needs to be, It just needs to be taken as one of the cost lines in the, in the startup or scale up.
• 14:41
  Chris Reichhelm: You said at the beginning, and you've said just then, you know, you, you referred to, we have to be more mature, I'm summarizing here, but we have to be more mature where we have to have a more realistic understanding of what it's going to take for us to develop this solution and all of the different aspects of development that go into it.
• 15:04
  Chris Reichhelm: Who's we in this?
• 15:07
  Chris Reichhelm: Who's we?
• 15:08
  Chris Reichhelm: Who has to develop a better understanding and accept the real costs and be brave enough to put forward those costs?
• 15:18
  Chris Reichhelm: Who are we talking about?
• 15:20
  Peter J. Nieuwenhuizen: Yeah.
• 15:21
  Peter J. Nieuwenhuizen: Yeah.
• 15:22
  Peter J. Nieuwenhuizen: I, I, I, I love that question because indeed there is, there is something behind my, my, my we, and I think your, your we is us in the chemical industry.
• 15:32
  Peter J. Nieuwenhuizen: We is, we is the engineers and the chemists and also, of course, the non chemists that we have in the industry that are passionate about this industry, that believe this is an industry that is uh, that is fundamental, that is existential for, um, you know, the kind of life and the kind of society that, uh, that, that we have and we're, we're trying to, uh, we're, we're trying to make, um, so I'm in many ways, I'm very, I'm very optimistic.
• 16:07
  Peter J. Nieuwenhuizen: I think, you know, most people and most people in the industry want this industry to be successful, they want this industry to be respected, um, and they, and they, and they realize and they see the phenomenal capability that we have, the technology to do things, not just, you know, taking fossil and producing in the end CO2 and wasteful chemicals, but closing the circle.
• 16:32
  Peter J. Nieuwenhuizen: This is something that is within reach, technologically speaking.
• 16:37
  Peter J. Nieuwenhuizen: Of course, there's a cost, whether this is driven by the companies that are currently active and they are working on that, whether this is driven by startups and scaleups with the backing of venture capital, public capital, corporate capital, um, you know, all of those are working, I would say, ultimately in that direction, but with all, you know, the issues that it, that it has, many of these solutions will be more expensive than, uh, what we, uh, what we have today.
• 17:13
  Peter J. Nieuwenhuizen: And if you, if you allow me, so the, the typical thing that I bring up at this point is we, we are where we are, but this, this shift from fossil to circular um, is not dissimilar, we can learn a lot from the shift from a slavery based society to one in which we started to pay first children and adults and then only adults for the work that they did.
• 17:45
  Peter J. Nieuwenhuizen: Today, nobody would suggest that in order to have lower costs, we would go back to, uh, to, to using slaves.
• 17:55
  Peter J. Nieuwenhuizen: And I'm convinced that 50 years from now, people will say, of course, we're not going to suggest to use more fossil to make the products that we, that we need, because we can also make them in a circular fashion that is more expensive but it also has led to this shift from slavery to paying people for work, created a more sophisticated economy.
• 18:20
  Peter J. Nieuwenhuizen: That ultimately was better for all participants.
• 18:22
  Peter J. Nieuwenhuizen: Of course, it hurts in the ship, but at the end of the day, it is better for all participants.
• 18:28
  Peter J. Nieuwenhuizen: And the same thing I believe will be the case for a circular chemical industry, a circular economy.
• 18:37
  Chris Reichhelm: I think that's an interesting analogy you've raised there.
• 18:41
  Chris Reichhelm: Um, I hope you were right.
• 18:45
  Chris Reichhelm: If I dig into the we question a little bit more though, and I think about entrepreneurs, And investors who are, if you'd like, on the frontline and let's throw in some board directors there too, because they have a, uh, a role to play, but the real entrepreneurs who are developing these platforms and they're creating their business plans and their slide decks, and they're putting them forward to prospective investors and so on.
• 19:15
  Chris Reichhelm: Do these different parties, just to start with.
• 19:19
  Chris Reichhelm: Do you think they understand all of the elements that need to go into this kind of development process?
• 19:28
  Chris Reichhelm: Because, and I will, and I will say, and you can probably guess where I'm going with this, in my experience, I, I, I would really question them.
• 19:37
  Chris Reichhelm: I don't think they know, or if they do, then they don't have the courage to admit it upfront and to just say, look, that's the number.
• 19:46
  Chris Reichhelm: It's going to be much, much bigger than any of us thought, and that's what we're going to have to live with.
• 19:55
  Peter J. Nieuwenhuizen: I think, you know, even, even outside chemical industry startups and scale ups, I think, you know, many, maybe most, maybe all entrepreneurs would say, looking back, so if I had known what, what I know now, I wouldn't have started.
• 20:14
  Peter J. Nieuwenhuizen: I wouldn't have started my venture.
• 20:15
  Peter J. Nieuwenhuizen: And so you, I think you need to have a certain, um, a certain amount of naivete, um, and passion and just, you know, I will, I'm different.
• 20:26
  Peter J. Nieuwenhuizen: We, we, this technology is different.
• 20:28
  Peter J. Nieuwenhuizen: We will succeed because otherwise you will, you, you will, you will not do this.
• 20:33
  Peter J. Nieuwenhuizen: And, uh, and, and I think, yeah, I'm, again, I'm fortunate to work with a number of, you know, CEOs who just have that, you know, we will succeed because Yeah, we have to, and because this, this is just great.
• 20:49
  Peter J. Nieuwenhuizen: I'm passionate about what, uh, what I'm, what I'm doing.
• 20:53
  Peter J. Nieuwenhuizen: Of course, then, you know, the next thing is yeah, you, you, the, the great get separated from the merely good.
• 21:00
  Peter J. Nieuwenhuizen: Um, because they can deal with, Oh, I also had to do, we also have to take this into account.
• 21:06
  Peter J. Nieuwenhuizen: Oh, this is a difficult issue, uh, over, over there.
• 21:10
  Peter J. Nieuwenhuizen: How do we solve it?
• 21:14
  Chris Reichhelm: Is that a, um, And I get the point.
• 21:19
  Chris Reichhelm: You absolutely need passion in all of these different enterprises and a certain amount of naivete is a wonderful thing.
• 21:26
  Chris Reichhelm: Um, because you're right.
• 21:27
  Chris Reichhelm: If you factored in every potential eventuality, most people would never, would never move forward with it.
• 21:36
  Chris Reichhelm: Uh, you know, in, in my limited experience, I've watched 25 years worth of chemicals or chemical engineering, uh, businesses with each with great potential platform.
• 21:48
  Chris Reichhelm: And yet so few of them have really scaled successfully from lab to market.
• 21:53
  Chris Reichhelm: And so I've kind of, you know, I kind of get to a point where.
• 21:59
  Chris Reichhelm: Yes, you need that passion and you need that enthusiasm, but we need to see some success.
• 22:05
  Chris Reichhelm: We need, we need to see some scaled businesses and you're right to draw the distinction between startup and scale.
• 22:12
  Chris Reichhelm: And so we need to see businesses that have gone from either a research institute or a university or even a corporate spinout, not at the level of like Covestro or something, cause that was already a huge business, but you know, something smaller, very, very innovative that has been on the startup journey.
• 22:28
  Chris Reichhelm: Something that we can all look at and say, that's been on the startup journey.
• 22:31
  Chris Reichhelm: And people can point to and say, that's the one, that's the one that made it.
• 22:36
  Chris Reichhelm: So we can say, everyone can look around and it's undeniable success has taken hold there.
• 22:42
  Chris Reichhelm: What can we learn from that?
• 22:43
  Chris Reichhelm: Because otherwise, We're gonna, you know, we have lots of businesses that are fledgling and nothing that is able to stand on its own.
• 22:52
  Chris Reichhelm: And then that winds up impacting the entire industry.
• 22:58
  Peter J. Nieuwenhuizen: And that, and, and to an extent that of course has happened, uh, this is, and this is where, and this is where maybe the skepticism has, has come in and where, where people say, okay, we, we, we, we gotta be, we got a triple diligence this, uh, before, uh, before we go.
• 23:16
  Peter J. Nieuwenhuizen: I see that.
• 23:18
  Peter J. Nieuwenhuizen: Uh, I see that in the space that, uh, that, that, that, that, that, that's, that's
• 23:22
  Chris Reichhelm: And do you think the, the people around the board table, the investors and maybe even some of the board directors, I know you will understand it because of your, you know, your incredible background.
• 23:33
  Chris Reichhelm: Do enough investors understand it?
• 23:36
  Chris Reichhelm: Do they understand what it takes for it to scale something from lab to market in these industries, do you think?
• 23:42
  Peter J. Nieuwenhuizen: Yeah, so I'm, I'm, I'm,
• 23:46
  Chris Reichhelm: I don't wanna get you in hot water...
• 23:48
  Chris Reichhelm: .
• 23:48
  Chris Reichhelm: Peter J. Nieuwenhuizen: No, no, no, no.
• 23:49
  Chris Reichhelm: And I'm, and I'm do, and I'm dualistic here.
• 23:52
  Chris Reichhelm: Um, because the same, uh, the, the same is valid, uh, for investors.
• 23:58
  Chris Reichhelm: If you, um, if, if, if you are, if you are not passionate, if you, if you don't believe that you will succeed, that you see, that you see this differently, you, and I've, and I've been there.
• 24:12
  Chris Reichhelm: I mean, I, I've, I've, I've, as you mentioned, I've, I've founded, um, a venture fund, the European Circular Bioeconomy Fund and so I had, had the opportunity to look at many business plans and it is, it is actually easier to not invest.
• 24:30
  Chris Reichhelm: There is always something that will not work.
• 24:34
  Chris Reichhelm: Um, so you, so you got to believe, okay, this, this one, this one, we can get it to work.
• 24:41
  Chris Reichhelm: This one can work.
• 24:42
  Chris Reichhelm: So on the one hand, there is, there is that you, you, you've, you've got to have that sort of faith in this, this one will be 10x.
• 24:54
  Chris Reichhelm: Um, and, and the good news about the chemical industry, I also would like to say that is that if you make it in, it is actually very, it's actually very resilient.
• 25:04
  Chris Reichhelm: Once you're selling, you get, you get your customers, you have a retention rate of 90, 95 percent year on year.
• 25:13
  Chris Reichhelm: So that's the, that's where, that's where we'd like to get.
• 25:17
  Chris Reichhelm: Do I think that those companies that have been investing in these startups have had the right knowledge capabilities?
• 25:27
  Chris Reichhelm: I don't think so.
• 25:29
  Chris Reichhelm: Um, it is a, it is a very difficult and very multifaceted space to, um, to play in.
• 25:38
  Chris Reichhelm: Um, and even let's say a dedicated venture fund for, let's call it the green chemistry venture fund.
• 25:48
  Chris Reichhelm: There is no such fund, you know, that will, that will be the prime place where you could expect, okay, these people have.
• 25:55
  Chris Reichhelm: All the different angles that we need to have in order to do due diligence, but also subsequently, and I think this is very important, subsequently to support those management teams.
• 26:07
  Chris Reichhelm: So as I said, I'm, I'm dualistic.
• 26:08
  Chris Reichhelm: I think to an extent.
• 26:10
  Chris Reichhelm: Yeah.
• 26:10
  Chris Reichhelm: Yeah.
• 26:11
  Chris Reichhelm: Yeah.
• 26:12
  Chris Reichhelm: You have to, you have to.
• 26:14
  Chris Reichhelm: To the other extent, I also think that there isn't sufficient hard nosed capability in the venture funds that have been investing in these startups.
• 26:26
  Chris Reichhelm: And that might also be one of the reasons why it isn't working as well.
• 26:31
  Chris Reichhelm: If you look at the companies themselves, you've seen a lot of companies.
• 26:36
  Chris Reichhelm: I'm sure you've done due diligence on lots of companies, and you've, uh, you know, you've been on the board of a number of companies as well, and you've actually worked in some of these companies.
• 26:46
  Chris Reichhelm: Where, where are the gaps that you see?
• 26:49
  Chris Reichhelm: Where are the, where are the, the particular challenges for these types of companies?
• 26:56
  Chris Reichhelm: Where do they often go wrong, in your view?
• 27:05
  Peter J. Nieuwenhuizen: I think, um, they, I think two areas.
• 27:15
  Peter J. Nieuwenhuizen: Particular.
• 27:15
  Peter J. Nieuwenhuizen: So one is application know how and the other will be scaling, engineering, production, know how, um, applications.
• 27:30
  Peter J. Nieuwenhuizen: You know, this is, this is one of the intriguing things.
• 27:32
  Peter J. Nieuwenhuizen: You can, you say it's the chemical industry, that's a single word, but there is no chemical industry.
• 27:38
  Peter J. Nieuwenhuizen: There is 2000, maybe 20, 000 chemicals, industry, which, which do all these different things.
• 27:46
  Peter J. Nieuwenhuizen: And then all those chemicals are applied in different application areas.
• 27:51
  Peter J. Nieuwenhuizen: And even when I was 15 years in AkzoNobel, I would learn, I would learn.
• 27:56
  Peter J. Nieuwenhuizen: It's like, Oh, we've got this business here with so many, uh, 15 million worth of surfactants into asphalt.
• 28:08
  Peter J. Nieuwenhuizen: To what?
• 28:09
  Peter J. Nieuwenhuizen: We're selling this into asphalt to, to make roads.
• 28:13
  Peter J. Nieuwenhuizen: Yeah.
• 28:13
  Peter J. Nieuwenhuizen: So it's quite important.
• 28:15
  Peter J. Nieuwenhuizen: If you do that, it's has such a positive impact on how long you can transport the asphalt, etc.
• 28:22
  Peter J. Nieuwenhuizen: Amazing.
• 28:24
  Peter J. Nieuwenhuizen: And so if you are a startup and you figured out this, you know, a particular ingredient that has a beneficial effect, let's say itaconics in automatic dish.
• 28:35
  Peter J. Nieuwenhuizen: That's wonderful.
• 28:37
  Peter J. Nieuwenhuizen: Now, where do you take it next?
• 28:39
  Peter J. Nieuwenhuizen: There are literally 20, 000 opportunities, right?
• 28:44
  Peter J. Nieuwenhuizen: And then in a big company, it makes it a lot easier because you just say to so and so who's next door in a lab, say, Hey, would this work?
• 28:51
  Peter J. Nieuwenhuizen: They do.
• 28:53
  Peter J. Nieuwenhuizen: And so, so there is this sort of easy way of figuring things out.
• 28:57
  Peter J. Nieuwenhuizen: So, application knowledge, how do you get access to application knowledge?
• 29:03
  Chris Reichhelm: Yeah, yeah, no, please continue.
• 29:06
  Peter J. Nieuwenhuizen: Yeah, how do you, how do you get access to that?
• 29:08
  Peter J. Nieuwenhuizen: This is, this is a, this is a really big thing.
• 29:10
  Peter J. Nieuwenhuizen: I also think this is an opportunity.
• 29:12
  Peter J. Nieuwenhuizen: There's a lot of people that have left the industry that I think we can, we can, we can draw back in and say, hey, you know, something about tolerance.
• 29:23
  Peter J. Nieuwenhuizen: Have a look at this, help me out for three months.
• 29:26
  Peter J. Nieuwenhuizen: Is this something to dive into?
• 29:29
  Peter J. Nieuwenhuizen: I don't see enough of that.
• 29:32
  Chris Reichhelm: That's a great point.
• 29:33
  Chris Reichhelm: So there are a couple of pieces to this.
• 29:35
  Chris Reichhelm: One is the identification of the application area in particular.
• 29:40
  Chris Reichhelm: And with so many, no one person's going to be able to do all of that with the level of skill and expertise.
• 29:48
  Chris Reichhelm: It's impossible.
• 29:48
  Chris Reichhelm: So, you know, if you're thinking about a startup and you're thinking about, okay, we've got some kind of novel platform here and where might we play?
• 29:58
  Chris Reichhelm: Just that discovery process and that selection of those areas, I think is, is a key one.
• 30:07
  Chris Reichhelm: And then there is the, it sounds like there's also this another piece to it, which is about the, how do we test it?
• 30:14
  Chris Reichhelm: How do we ensure that when we're, if we're going to go down that road, we know the performance characteristics of our platform within that application area.
• 30:24
  Chris Reichhelm: And, and so that's a trial period and that's a.
• 30:28
  Chris Reichhelm: And then how much trialing do we need?
• 30:30
  Chris Reichhelm: How many, you know, how much evidence do we have to gather in order to get the market to believe?
• 30:37
  Chris Reichhelm: Yeah, yeah, we can be supplied by these guys.
• 30:42
  Peter J. Nieuwenhuizen: And then, and then you have, even if you've got something that you say, Hey, I found this new application area.
• 30:47
  Peter J. Nieuwenhuizen: Hey, I believe we are better, cheaper, better performance than the incumbent.
• 30:53
  Peter J. Nieuwenhuizen: Then there is, then there is also the situation that somebody says, okay, so I can see it works.
• 30:58
  Peter J. Nieuwenhuizen: But how does this evolve over the long term, right?
• 31:02
  Peter J. Nieuwenhuizen: So PFAS are wonderful, wonderful molecules.
• 31:05
  Peter J. Nieuwenhuizen: They work phenomenally well, but as we learn, learn over the long term, oh, it actually ends up in the environment and it doesn't break down.
• 31:15
  Peter J. Nieuwenhuizen: Nobody wants to, that is the regrettable substitution.
• 31:20
  Peter J. Nieuwenhuizen: So if it isn't you know, really necessary to make a change.
• 31:25
  Peter J. Nieuwenhuizen: And there isn't really an upside.
• 31:27
  Peter J. Nieuwenhuizen: A lot of companies, chemical companies, their customers are reluctant to make a change.
• 31:33
  Peter J. Nieuwenhuizen: And then you go, you come to, okay, you, you, you make a change if there's a burning platform.
• 31:39
  Peter J. Nieuwenhuizen: Yeah.
• 31:39
  Peter J. Nieuwenhuizen: Um, if you're in the car industry, the burning platform is around CO2 and it affects Every car company and the elect and electric is the solution.
• 31:50
  Peter J. Nieuwenhuizen: Um, if you have a concern about, let me say Monochloroacetic acid, people don't even know more, monochloroacetic acid exists if you get it on the radar screen of NGOs and of politicians.
• 32:04
  Peter J. Nieuwenhuizen: Wonderful.
• 32:05
  Peter J. Nieuwenhuizen: Now you've dealt with MCA 19,999 other chemicals to go.
• 32:11
  Peter J. Nieuwenhuizen: Same process.
• 32:13
  Peter J. Nieuwenhuizen: So dust stop.
• 32:16
  Chris Reichhelm: So, and the burning platforms, I mean, you, you alluded to the car industry and the CO2 piece.
• 32:21
  Chris Reichhelm: That's real.
• 32:22
  Chris Reichhelm: I mean, that's really the burning platform is regulatory.
• 32:25
  Chris Reichhelm: There's legislation.
• 32:27
  Chris Reichhelm: Unless you start dealing with this, we're gonna start slapping penalties on you.
• 32:32
  Chris Reichhelm: And that seems, and we're seeing that with PFAS as well.
• 32:35
  Chris Reichhelm: And so now the European Union is banning PFAS, a certain number of PFAS every year over the next, you know, whatever, three or four years until ultimately many of them are going to be banned.
• 32:46
  Chris Reichhelm: And there are a lot of PFAS out there.
• 32:48
  Peter J. Nieuwenhuizen: Yeah.
• 32:48
  Chris Reichhelm: Um, but that's the burning platform.
• 32:50
  Chris Reichhelm: We need to filter them out or we need to start making materials that don't contain any PFAS.
• 32:54
  Chris Reichhelm: We need to do all of these different things.
• 32:56
  Chris Reichhelm: But the burning platform becomes legal.
• 32:59
  Chris Reichhelm: It becomes a regulatory change.
• 33:01
  Chris Reichhelm: And that, that's what seems to get the chemicals industries to move faster than anything.
• 33:11
  Peter J. Nieuwenhuizen: Yes, exactly.
• 33:13
  Peter J. Nieuwenhuizen: And the, and the other, and the other driver has of course been, and that's a driver that also worked for, For the big corporates, of course the big corporates know if you have green, if you have a green feature
• 33:27
  Chris Reichhelm: Yeah.
• 33:27
  Peter J. Nieuwenhuizen: In your products and it is just as expensive or cheaper, I mean, then it will go
• 33:35
  Chris Reichhelm: and it course it'll, it will be, it will be,
• 33:37
  Peter J. Nieuwenhuizen: it'll take off.
• 33:38
  Peter J. Nieuwenhuizen: It will take off in the market.
• 33:40
  Peter J. Nieuwenhuizen: It'll, it will be successful and
• 33:42
  Chris Reichhelm: mm-hmm.
• 33:42
  Chris Reichhelm: Peter J. Nieuwenhuizen: You know, so okay, can we find the green alternatives that are not twice, or sometimes even just 10 percent as expensive, uh, more expensive because, because the ones that are same price and green, we will be able to bring it to the market.
• 34:01
  Chris Reichhelm: And a lot of those substitutions actually have happened over time.
• 34:05
  Chris Reichhelm: So part of the story of, um, uh, of, Hey, why aren't we seeing great startup companies?
• 34:15
  Chris Reichhelm: Is also obscured by the fact that actually the industry, to its credit, has also brought green alternatives into the market.
• 34:24
  Chris Reichhelm: Yes.
• 34:25
  Peter J. Nieuwenhuizen: Oh, the industry is greener now than it was years ago.
• 34:29
  Chris Reichhelm: Yes, and it was, that's right.
• 34:31
  Peter J. Nieuwenhuizen: We're not seeing, we're not seeing a Tesla, for example, and you may wonder whether that is actually to be expected, whether that is, uh, you know, the nature of change in the industry.
• 34:42
  Peter J. Nieuwenhuizen: And if it's not more like, okay, there's a startup company, it will make, it will, it will make some progress.
• 34:48
  Peter J. Nieuwenhuizen: And then it gets either acquired or emulated by if it's, if it is successful by one of the, one of the larger play.
• 34:57
  Chris Reichhelm: So the application area is one key area.
• 35:01
  Chris Reichhelm: And you, you mentioned this idea of using, so I'm thinking of for startups, I'm an entrepreneur, I've got a chemistry startup, and I'm trying to determine where we should be focusing in terms of application area, there are going to be lots of different areas for us to select from.
• 35:18
  Chris Reichhelm: You actually mentioned what I think is a very good idea, this idea of recruiting people, former experts from different areas of the chemicals industry to come in and do a piece of work to evaluate and provide advice and guidance on likely success within a particular industry.
• 35:38
  Chris Reichhelm: Do you, uh, and, and I know that a number of investors try to do that.
• 35:43
  Chris Reichhelm: They try to build up a bank of.
• 35:45
  Chris Reichhelm: These experts that come in from time to time, is there a, is, is that what you recommend?
• 35:52
  Chris Reichhelm: Are there other ways?
• 35:53
  Chris Reichhelm: Are you, you know, are there other ideas you'd have that can help entrepreneurs in that way?
• 36:00
  Peter J. Nieuwenhuizen: Yeah.
• 36:01
  Peter J. Nieuwenhuizen: I think this is a, this is an infinite, this, this is definitely one, um, we, we, um, in, in AkzoNobel and I'm sure other companies have the same, similar.
• 36:11
  Peter J. Nieuwenhuizen: We called these people the technical marketing managers.
• 36:16
  Peter J. Nieuwenhuizen: So they were, they were usually people that had works in the lab, had a clear sort of commercial, commercial sense.
• 36:24
  Peter J. Nieuwenhuizen: Um, I think the reality is if you have an existing chemical company, there is a lot of selling going on that is just, we know what we're buying.
• 36:33
  Peter J. Nieuwenhuizen: Uh, you know, they know what they're getting and it's a matter of keeping the contracts, you know, working and the, and the logistics until there is a change.
• 36:44
  Peter J. Nieuwenhuizen: Okay.
• 36:44
  Peter J. Nieuwenhuizen: Can we use, is there something that we could use for this particular problem?
• 36:50
  Peter J. Nieuwenhuizen: And that would usually be two details for the, you know, the sales manager.
• 36:56
  Peter J. Nieuwenhuizen: And then we will bring in this technical marketing manager who has a bridge function between R and D and between, and, and between sales.
• 37:06
  Peter J. Nieuwenhuizen: People that bring 25 years of experience.
• 37:10
  Peter J. Nieuwenhuizen: You, you all, you cannot put that even into a bank and especially if you have as many application areas as we have, I would, I would, I would even say to, you know, to venture companies.
• 37:23
  Peter J. Nieuwenhuizen: Don't, don't start a bank.
• 37:24
  Peter J. Nieuwenhuizen: These are, these are all bespoke.
• 37:26
  Peter J. Nieuwenhuizen: You just, if this, if somebody needs something, let, let me use the example again for, you know, asphalt chemistry, you just gotta find, there's maybe just three people worldwide that know what's going on.
• 37:42
  Peter J. Nieuwenhuizen: You gotta find those people.
• 37:43
  Peter J. Nieuwenhuizen: And we've got a great tool.
• 37:45
  Peter J. Nieuwenhuizen: It's called LinkedIn.
• 37:46
  Peter J. Nieuwenhuizen: Um, and, and, you know, that, that's, that's the work there is so much in terms of, if you work in a space for 20 years, how you make the sale, every space is a little bit different, how they sell and what is, what is important, the chemistries are, you know, small things make a difference.
• 38:10
  Peter J. Nieuwenhuizen: And you only get that from somebody who knows, you know, who has been, has been in that area.
• 38:16
  Peter J. Nieuwenhuizen: So I, I think this is a, I think this is a must.
• 38:19
  Peter J. Nieuwenhuizen: Don't try to do everything yourself, which by the way, doesn't mean that you should not build up that application know how in house.
• 38:28
  Peter J. Nieuwenhuizen: What Itaconix did phenomenally well is at some point they bought 10 dishwashers and they just started to do it themselves.
• 38:38
  Peter J. Nieuwenhuizen: They started to learn, how does this work?
• 38:40
  Peter J. Nieuwenhuizen: Um, you, you can make your, you can do your tests so much faster, but they did it with somebody who actually had worked for 20 years with different chemicals in that particular application area, in that industry.
• 38:54
  Peter J. Nieuwenhuizen: And then you, very quickly.
• 38:56
  Chris Reichhelm: That's great advice.
• 38:58
  Chris Reichhelm: The other area you mentioned was scale up and engineering.
• 39:02
  Chris Reichhelm: Talk a little bit about that.
• 39:03
  Peter J. Nieuwenhuizen: And this one, I think more, it is, it's more intuitive.
• 39:07
  Peter J. Nieuwenhuizen: I think people immediately understand, okay, if you're a small company and you need to build a 50 million, a hundred million, a 200 million plant, this is probably not something that you're able to do.
• 39:18
  Chris Reichhelm: Yeah.
• 39:18
  Peter J. Nieuwenhuizen: So I think we, I think we all know by and large, this is difficult.
• 39:25
  Peter J. Nieuwenhuizen: Um,
• 39:28
  Chris Reichhelm: Let's drill down into that.
• 39:29
  Chris Reichhelm: Where does it become difficult?
• 39:32
  Chris Reichhelm: And I appreciate there's probably difficulty throughout the whole thing.
• 39:35
  Chris Reichhelm: Financing is very difficult when you're trying to build true first of a kind type plans.
• 39:42
  Chris Reichhelm: Is there more that's difficult around that?
• 39:45
  Chris Reichhelm: I'm sure there is.
• 39:50
  Peter J. Nieuwenhuizen: Yeah, but you know, financing is the, is the, um, is the, the result of, of doing a good, you know, basic engineering and detailed engineering, right?
• 40:01
  Peter J. Nieuwenhuizen: Um, word, what, you know, some of the things that are difficult is, you know, Um, we were making a lot of things with, um, with, with oil or gas and as varied as oil and gas are, they are actually pretty homogenous.
• 40:23
  Peter J. Nieuwenhuizen: Um, the moment that you go to, let's look at Enerkem, you look at household waste.
• 40:31
  Peter J. Nieuwenhuizen: Uh, you go to biomass, uh, BioBTX, starting to use plastic waste.
• 40:36
  Peter J. Nieuwenhuizen: So there's a lot of this plastic, plastic pyrolysis.
• 40:40
  Peter J. Nieuwenhuizen: Um, these, these are all very heterogeneous.
• 40:45
  Peter J. Nieuwenhuizen: Um, the waste that Enerkem was using was, would be different in December than it would be in July.
• 40:53
  Peter J. Nieuwenhuizen: Sometimes it's extremely wet, sometimes it's extremely dry.
• 40:58
  Peter J. Nieuwenhuizen: Um, so, so there, so there's two things.
• 41:03
  Peter J. Nieuwenhuizen: One, you haven't, you have never built a plant using oil, right?
• 41:08
  Peter J. Nieuwenhuizen: So there's, there's just no capability there.
• 41:11
  Peter J. Nieuwenhuizen: But then even if you bring in people, which, which we are doing, which you bring in people from the industry that have done this, even they must admit to what this is actually, this is tricky.
• 41:25
  Peter J. Nieuwenhuizen: This is different.
• 41:25
  Peter J. Nieuwenhuizen: We need to, we need to think about some of these things very carefully.
• 41:29
  Peter J. Nieuwenhuizen: And usually very carefully turns out to be not even careful enough and too quickly.
• 41:37
  Peter J. Nieuwenhuizen: So, and this is, I think, absolutely a lesson too quickly moving into detailed engineering and build instead of
• 41:46
  Chris Reichhelm: moving into it
• 41:47
  Peter J. Nieuwenhuizen: too quickly.
• 41:48
  Peter J. Nieuwenhuizen: Yeah.
• 41:49
  Peter J. Nieuwenhuizen: Instead of having a due diligence by experts in all of these novel, the innovative unit operations that you are going to introduce because the cost associated with thinking another three months about, are we really doing this right?
• 42:10
  Peter J. Nieuwenhuizen: What, what is the evidence that we think if we do it this way, it will actually work.
• 42:15
  Peter J. Nieuwenhuizen: The cost of that is there and it's difficult and it's cost before FID, right?
• 42:21
  Peter J. Nieuwenhuizen: And typically that's a slightly different bucket for the investors.
• 42:24
  Peter J. Nieuwenhuizen: So you blow up that piece.
• 42:27
  Peter J. Nieuwenhuizen: But if you blow up that piece and you can avoid five months of re engineering when you already have 25 operators running around.
• 42:37
  Peter J. Nieuwenhuizen: It is a major saving.
• 42:40
  Peter J. Nieuwenhuizen: So I think it's almost like you can almost not do enough sort of rethinking, rethinking, rethinking, and we haven't done enough as, you know, as sort of the chemical startups, we have probably never done enough to really get it right.
• 43:00
  Peter J. Nieuwenhuizen: Makes sense because the investors are also impatient and of course do not want to spend enough money, but we got to get to the mature situation and we have that situation I would say currently with both Covestro and with Infinity Recycling, a venture fund here based in the Netherlands who do a very good job at emphasizing, let's not move too fast into FID.
• 43:28
  Peter J. Nieuwenhuizen: Let's check.
• 43:29
  Peter J. Nieuwenhuizen: Let's check, let's ask deep experts whether they are confident this can work and if they're not, let's just check it again.
• 43:40
  Peter J. Nieuwenhuizen: So I think at this piece of scale up, we know it's tough, but I think we're, we're, we're, we're not yet sufficiently accepting how tough it is and what it takes.
• 43:54
  Chris Reichhelm: Yes, we're getting, we have, yeah, yeah, yeah, yeah, yeah.
• 43:58
  Chris Reichhelm: Do we have the engineering talent?
• 44:02
  Peter J. Nieuwenhuizen: Um, I, I, I, I would, I would say yes, right.
• 44:08
  Peter J. Nieuwenhuizen: Um, I, I see the engineering talent.
• 44:12
  Peter J. Nieuwenhuizen: Um, but it comes, it comes back to, we, we, we, we have, we have to fundamentally believe we need to involve them.
• 44:21
  Peter J. Nieuwenhuizen: There are phenomenal people out there.
• 44:24
  Peter J. Nieuwenhuizen: Again, there is, there is an enormous amount of, I would say, retired, semi retired, uh, semi retired people that are fantastic counterparts for, let's say the young generation of engineers that is typically working in these, uh, in these startups.
• 44:43
  Peter J. Nieuwenhuizen: But it requires, it requires of course, a CEO that says, this is what I want you to do also to, to the young folks, right?
• 44:52
  Peter J. Nieuwenhuizen: They, of course, uh, they, they are, you know, as, as passionate and as ambitious as anybody else, because that's why they work in a, in a, in a startup.
• 45:01
  Peter J. Nieuwenhuizen: What he also has to tell them, that is fantastic.
• 45:04
  Peter J. Nieuwenhuizen: But you need, you need to mine all the painful knowledge that these people, retired, semi retired, have acquired over their lifetime and then we can be successful.
• 45:24
  Chris Reichhelm: Do you see enough of that exchange where those retired or semi retired individuals coming into these young startups.
• 45:29
  Chris Reichhelm: Is that something you've seen?
• 45:30
  Chris Reichhelm: I haven't seen very much of that in my experience or from my vantage point.
• 45:36
  Peter J. Nieuwenhuizen: So I, you know, and, and, and of course I, I'm, I'm as guilty as anybody else.
• 45:40
  Peter J. Nieuwenhuizen: Let's let, let us, let us be sure.
• 45:42
  Peter J. Nieuwenhuizen: Let us be clear about that, about that, I, I also, uh, hope to believe that something can be done easier and quicker and should be, and it should be properly engineered, uh, already.
• 45:58
  Peter J. Nieuwenhuizen: Yeah, it, it certainly is my approach with, with anybody who asks me to check, double check, triple check, saying, have, have we, have we brought in enough, enough knowledge?
• 46:11
  Peter J. Nieuwenhuizen: Are we really sure we've done that?
• 46:14
  Chris Reichhelm: Yes.
• 46:14
  Peter J. Nieuwenhuizen: because people, you, you, you literally don't know what, what somebody is seeing when they see your design for the first time.
• 46:24
  Peter J. Nieuwenhuizen: And I haven't seen a situation where we didn't bring a design to somebody and who didn't come up with, have you thought about this?
• 46:32
  Peter J. Nieuwenhuizen: Because in my experience, this might very well not work.
• 46:35
  Chris Reichhelm: Yeah.
• 46:36
  Chris Reichhelm: Yeah.
• 46:36
  Chris Reichhelm: How, um, what's your view on the relationship between the corporates and startups?
• 46:46
  Chris Reichhelm: Particularly within the broader chemicals industries.
• 46:52
  Chris Reichhelm: Do you see a lot of productive engagement going on?
• 46:59
  Chris Reichhelm: Um, are corporates looking for, are they looking for cheap acquisitions at some stage?
• 47:11
  Chris Reichhelm: Are they looking to copy what they can or are they looking to productively engage with Startups and, and obviously yeah, there's always the potential of an acquisition.
• 47:24
  Chris Reichhelm: There's a potential of a commercial engagement of some kind.
• 47:27
  Chris Reichhelm: Um, in my experience, there aren't enough of the productive commercial engagements.
• 47:32
  Chris Reichhelm: There are occasionally some acquisitions, but a lot of the time I think I, I would say you see some of the companies, some of the startup companies getting strung out, getting strung along by the larger corporates.
• 47:46
  Chris Reichhelm: Uh, without feeling they're making much progress.
• 47:51
  Peter J. Nieuwenhuizen: Yeah.
• 47:51
  Peter J. Nieuwenhuizen: This is a, this is a very important and very challenging topic.
• 47:58
  Peter J. Nieuwenhuizen: And, um, unfortunately, um, and I, and I, I have, uh, the benefit of having been on both, on both sides.
• 48:07
  Peter J. Nieuwenhuizen: Maybe if I describe it best from a corporate perspective, I think it's schizophrenic.
• 48:16
  Peter J. Nieuwenhuizen: And I'll try to, I'll try to explain that.
• 48:19
  Peter J. Nieuwenhuizen: Um, the corporate will appoint and will make it make it a point to, uh, look for innovation.
• 48:29
  Peter J. Nieuwenhuizen: I mean, it is, it's your, it's your duty, uh, to have a successful company.
• 48:33
  Peter J. Nieuwenhuizen: You have to be always looking around.
• 48:35
  Peter J. Nieuwenhuizen: Okay.
• 48:35
  Peter J. Nieuwenhuizen: Where, you know, what, what can happen?
• 48:37
  Peter J. Nieuwenhuizen: Where can we, where can we go?
• 48:39
  Peter J. Nieuwenhuizen: And so people like me, you know, get, get into jobs.
• 48:42
  Peter J. Nieuwenhuizen: So my, my best job title ever was Director of Future Proof Supply Chains.
• 48:47
  Peter J. Nieuwenhuizen: I still think that was, that is, that's, that's phenomenal.
• 48:51
  Peter J. Nieuwenhuizen: How do you future proof your supply chains?
• 48:54
  Peter J. Nieuwenhuizen: That's what you should be doing.
• 48:56
  Peter J. Nieuwenhuizen: Um, and these people are, are champions, are sponsors of, of new stuff.
• 49:05
  Peter J. Nieuwenhuizen: Um, and they get a budget and, and, uh, so, and, and those are the people that you meet as a startup and a scale up.
• 49:13
  Peter J. Nieuwenhuizen: Those are the people that you meet people who are passionate about innovation, about changing, about bringing new technology into the company.
• 49:22
  Peter J. Nieuwenhuizen: So that feels like, okay, we're talking to the right, to the right persons here and they can help us and they can, the challenge is suppose you, suppose a colleague of mine is, is managing a business and That could be disrupted by this new technology that I'm, that I'm talking about.
• 49:50
  Peter J. Nieuwenhuizen: Um, there's not a lot of gain for that person to, to start to interact with me because, you know, so many innovations ideas go nowhere, right?
• 50:03
  Peter J. Nieuwenhuizen: So you just continue with your, with your business, but at some point I'm going to bring in this new technology and say, Hey, here is something that, um, that, you know, that, that, that can make us better.
• 50:16
  Peter J. Nieuwenhuizen: But actually, you know, this particular business inside Akzo will be greatly affected by it.
• 50:23
  Peter J. Nieuwenhuizen: We may have to depreciate, if it becomes successful, we may have to write off one or two plants.
• 50:30
  Peter J. Nieuwenhuizen: And so, unfortunately, what I have experienced is that at some point when you, when you've worked with somebody for three years, you've of course communicated this, but at some point it becomes real.
• 50:44
  Peter J. Nieuwenhuizen: And then people start to pay attention and say, Hey, wait a minute, is this a good idea?
• 50:51
  Peter J. Nieuwenhuizen: Is this actually, if you would bring this technology in here or into the world, is this good for our business?
• 51:00
  Peter J. Nieuwenhuizen: And of course, a write off of an existing business is a, is a pretty bad IRR, which has to be offset by a phenomenal IRR on the, on the, on the, on the side of the new technology.
• 51:14
  Peter J. Nieuwenhuizen: And that is a, that is a calculation that you cannot easily make also becomes emotional.
• 51:20
  Peter J. Nieuwenhuizen: So I, so what, the way I'm saying the schizophrenic is like the corporate wants these new businesses, but as soon as they become potentially successful, it starts to realize that this will hurt the corporate in some way, shape, or form.
• 51:37
  Peter J. Nieuwenhuizen: And that's why you see very often after some time, you see a disengagement and the scale up/ startup feels strung out.
• 51:46
  Peter J. Nieuwenhuizen: It feels it's been, you know, the corporate has just been taking information and not giving something back because there is that inherent conflict.
• 51:56
  Peter J. Nieuwenhuizen: In many ways, I think corporates are not the logical partners for startups and scale ups and, and, um, we, this is the other, this is the we of the, of the, of the small startups really have to build our markets on our own.
• 52:19
  Chris Reichhelm: Yeah.
• 52:20
  Peter J. Nieuwenhuizen: Now that's, is that, is that black and white?
• 52:23
  Peter J. Nieuwenhuizen: Probably, probably not.
• 52:25
  Peter J. Nieuwenhuizen: But I think, I think we have to be more mindful of those contradictions.
• 52:31
  Chris Reichhelm: Absolutely.
• 52:33
  Chris Reichhelm: Absolutely.
• 52:33
  Chris Reichhelm: That's very wise.
• 52:35
  Chris Reichhelm: I think that's very wise and, and, um,
• 52:38
  Peter J. Nieuwenhuizen: But painful, but painful.
• 52:40
  Peter J. Nieuwenhuizen: So it's a painful realization.
• 52:42
  Chris Reichhelm: It is..
• 52:42
  Chris Reichhelm: Yeah.
• 52:43
  Chris Reichhelm: Peter, uh, I have enjoyed this thoroughly.
• 52:47
  Chris Reichhelm: Thank you so much.
• 52:49
  Chris Reichhelm: I could keep talking and keep asking you questions and getting your views, but, um, but I know we need to wrap up.
• 52:57
  Chris Reichhelm: So let me thank you so much for taking this time with me.
• 53:00
  Peter J. Nieuwenhuizen: Thank you.
• 53:01
  Chris Reichhelm: And with us.
• 53:02
  Chris Reichhelm: And sharing the benefit of your insight and wisdom.
• 53:05
  Chris Reichhelm: Uh, I'm sure our listeners are going to love this, uh, as I have.
• 53:09
  Chris Reichhelm: So thank you so much for your time.
• 53:11
  Peter J. Nieuwenhuizen: Thank you very much, Chris.
• 53:12
  Peter J. Nieuwenhuizen: It's been great to be here and I really want to compliment you on having this, I don't know what to call it, but, uh, this, this way of talking about such fundamental and fundamentally important aspects well,
• 53:25
  Chris Reichhelm: it's, it's, it's important.
• 53:27
  Chris Reichhelm: It's important.
• 53:28
  Chris Reichhelm: Thank you.
• 53:29
  Chris Reichhelm: You've been listening to the Lab to Market Leadership Podcast, brought to you by Deep Tech Leaders.
• 53:35
  Chris Reichhelm: This podcast has been produced by Beauxhaus.
• 53:38
  Chris Reichhelm: You can find out more about us on LinkedIn, Spotify, Apple, or wherever you get your podcasts.