Latest / Lab to Market Leadership with Chris Reichhelm / Why Customer Traction Matters Far More Than Another Perfect Experiment

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Why Customer Traction Matters Far More Than Another Perfect Experiment · Lab to Market Leadership with Chris Reichhelm

0:00
SPEAKER_01: When I talk to commercial people now, it makes them really uncomfortable.
0:04
SPEAKER_01: Almost all of them.
0:05
SPEAKER_01: If you get a commercial person from a big company, they would say, no, this is a long-term relationship game.
0:11
SPEAKER_01: But as a startup, it can't be because you don't have a long-term relationship and most people are not interested in what you're building.
0:19
SPEAKER_00: Welcome to the Lab to Market Leadership Podcast.
0:22
SPEAKER_00: Too many advanced science and engineering companies failed to deliver their innovations from the lab to the market.
0:29
SPEAKER_00: We're on a mission to change that.
0:31
SPEAKER_00: My name is Chris Reichhelm, and I'm the founder and CEO of Deep Tech Leaders.
0:36
SPEAKER_00: Each week we speak with some of the world's leading entrepreneurs, investors, corporates, and policymakers about what it takes to succeed on the lab-to-market journey.
0:46
SPEAKER_00: Join us.
0:49
SPEAKER_00: We have another novel chemistry story for you today.
0:53
SPEAKER_00: From lab to the market, what it took to get there.
0:58
SPEAKER_00: And for some context, we focus a lot on novel chemistry and advanced materials.
1:02
SPEAKER_00: I personally believe that within the deep tech church, they are two of the most difficult platforms to get from the lab to the market.
1:10
SPEAKER_00: And they're also fundamental to realizing this AI-inspired future that we hear so much about.
1:16
SPEAKER_00: So I happen to have a soft spot for this area of hard tech.
1:21
SPEAKER_00: The individual we're going to talk to today, I'm super excited by, his name is Ben Dolman.
1:26
SPEAKER_00: And Ben is the founder and CEO of a company called HoloFirm.
1:29
SPEAKER_00: They're based in the UK.
1:31
SPEAKER_00: They're a spin-out of the University of Manchester, and they have focused on designing and manufacturing biosurfactants.
1:40
SPEAKER_00: And they have built up a presence where they're distributing in more than 60 countries worldwide to 200 customers.
1:47
SPEAKER_00: That is a true lab-to-market journey.
1:49
SPEAKER_00: And Ben has overseen them this entire way.
1:52
SPEAKER_00: He has recently stepped down, and we're going to hear more about that.
1:56
SPEAKER_00: But we're going to understand the startup.
1:59
SPEAKER_00: We're going to understand the team he built, the capital stack he considered.
2:02
SPEAKER_00: We're going to understand the technology, operations, and commercial strategies that he built, what went right, what didn't go right.
2:09
SPEAKER_00: There are going to be so many lessons for those of you building in these really difficult areas.
2:14
SPEAKER_00: You're going to want to listen to this.
2:16
SPEAKER_00: Let's get into it.
2:17
SPEAKER_00: Ben Dolman, thank you so much for joining me.
2:19
SPEAKER_00: Yeah, great to be here, Chris.
2:20
SPEAKER_00: Yeah, good to speak.
2:22
SPEAKER_00: You have been on a remarkable journey.
2:27
SPEAKER_00: And one that has started with you in a lab in Manchester and has ended, or it's continuing, but it has resulted in you selling novel chemistry to more than 200 customers worldwide.
2:42
SPEAKER_00: And as novel chemistry stories go, that's very unusual.
2:47
SPEAKER_00: It's unusual for a variety of reasons.
2:49
SPEAKER_00: One of which is it's so ridiculously hard to build a novel chemistry company or to build an advanced materials company and to have it be commercial.
2:58
SPEAKER_00: It's very, very hard.
2:59
SPEAKER_00: Few are able to do that.
3:01
SPEAKER_00: It's also difficult because it's very unusual for a founder CEO to be on board for that entire journey, especially in chemicals or advanced materials.
3:12
SPEAKER_00: What do you think about that?
3:14
SPEAKER_01: It's an interesting question.
3:16
SPEAKER_01: And I think coming from the lab background, one of the things we really focused on early was the cost and getting the product to have the right kind of economic profile to get into the market.
3:25
SPEAKER_01: I think something we did put a lot of attention on in the early days was how actually are we going to sell this?
3:31
SPEAKER_01: And I think that's something that is often difficult for kind of founders coming from a technical background.
3:36
SPEAKER_01: But it was actually something we didn't do enough in the early days and something which we had to redouble focus on later on.
3:44
SPEAKER_01: The technical scale-up was actually probably easier than I would have expected it to be.
3:48
SPEAKER_01: And the commercial scale-up much more difficult.
3:51
SPEAKER_01: So we ended up really having to do that.
3:53
SPEAKER_01: And again, with a very different mindset, really taking a startup approach to find a lot of different customers.
3:59
SPEAKER_01: Like you say, over 200 customers for a first commercial plant is a lot of customers.
4:04
SPEAKER_01: A lot more than what a big company would typically have for a first commercial plant.
4:10
SPEAKER_01: But it was really that change in strategy to go after a lot of the smaller customers, which enable us to go faster, which is what you really need to do for a first becoming commercial plant as well.
4:22
SPEAKER_00: So that's like most of the episode crammed into the first five minutes, which is brilliant.
4:26
SPEAKER_00: So we're going to unpick all of that, and I'm going to want to dive into that.
4:30
SPEAKER_00: But as you kind of sit there and think back to the journey that you've been on personally, how is it what you thought it would be?
4:39
SPEAKER_01: So I think actually going into the journey, it wasn't something that I kind of consciously said, okay, this is what's going to happen.
4:47
SPEAKER_01: There was a time in the very early days of Holotherm when we were thinking, and before really Holotherm started, that we thought by just licensing the technology out, we were not even necessarily looking to make it financial.
5:01
SPEAKER_01: My main motivation was to get the technology out there and making the world a better place by replacing petrochemicals.
5:08
SPEAKER_01: But it turned out to be really difficult to get people to pay attention to something you're not charging them for and something that's not fully developed.
5:16
SPEAKER_01: So I actually think it would be almost impossible to do that.
5:20
SPEAKER_01: And then we did early days switch to a licensing model.
5:23
SPEAKER_01: And again, that was pretty difficult.
5:25
SPEAKER_01: And we kind of fell into the route of building a plant, which I think turned out to be and would have been the best route from day one, but we fell into that from licensing proving to be difficult because people not knowing how to license.
5:38
SPEAKER_01: And then COVID hit, and it then became difficult to actually go and run on anybody else's plant.
5:46
SPEAKER_01: So we made the decision then to build a pilot plant, and there was a bit of government funding available to do that, which really changed the journey a lot.
5:54
SPEAKER_00: But it sounds like it was through the trial and error.
5:57
SPEAKER_00: So that it wasn't, it doesn't sound like it was the plan at the outset.
6:00
SPEAKER_00: It sounds like it was through trial and error.
6:02
SPEAKER_00: Hey, let's take this capital efficient route through licensing and see if that reveals anything.
6:08
SPEAKER_00: And then when it doesn't, and and we've seen lots of businesses go down this path, then you eventually, through a bit of luck and COVID and the restraints that were around and we're running out of options.
6:20
SPEAKER_00: We know licensing doesn't work.
6:21
SPEAKER_00: So now we have to sell something.
6:23
SPEAKER_00: We've got to educate the market.
6:24
SPEAKER_00: So now we actually have to build an operationally more sophisticated business.
6:29
SPEAKER_01: Yeah, it was definitely a lot of trial and error.
6:31
SPEAKER_01: And I think that was one of the things like early days speaking to the customers.
6:36
SPEAKER_01: I personally, when I was finishing my PhD, would probably send a few hundred messages every week to people in the bias of actant space to try to find out what was going on, to see who would be interested in the technology.
6:49
SPEAKER_01: Once we started to get some bites, I actually kind of started on that approach.
6:53
SPEAKER_01: I was a badminton player before that.
6:56
SPEAKER_01: And it's a lot harder in a way to get people to buy into sponsoring you to play badminton.
7:01
SPEAKER_01: I wasn't that high level that made it an obvious thing to do.
7:05
SPEAKER_01: So I contacted, I think, every team in Europe who might be looking for players before I was able to find somebody to go play for.
7:12
SPEAKER_01: Contacted maybe a few hundred physiotherapists and kind of rolled out that approach to say, okay, this is numbers game.
7:19
SPEAKER_01: How do we make this work in bias of factans?
7:22
SPEAKER_00: That's so funny.
7:24
SPEAKER_00: So the lessons you got through you trying to find sponsorship as a badminton player and the kind of volume of calls you need and emails and so on.
7:32
SPEAKER_00: And you said it earlier there, it's a volume game, it's a numbers game.
7:36
SPEAKER_00: You just got to keep trying.
7:37
SPEAKER_00: So now I'm really, really interested.
7:39
SPEAKER_00: Take me back to the very beginning, Ben.
7:41
SPEAKER_00: How did all of this start?
7:43
SPEAKER_00: Take me back to Manchester.
7:45
SPEAKER_00: You're doing your PhD.
7:46
SPEAKER_00: How does the idea come about?
7:48
SPEAKER_00: What is the starting point for the business?
7:50
SPEAKER_01: Yeah, so my PhD, I had a supervisor called James Winterburn, who was really very big picture thinker and a very supportive supervisor.
8:00
SPEAKER_01: But I think I was his first ever student.
8:02
SPEAKER_01: But I think he really took the approach of like this is my PhD for me to kind of learn and develop something, which I think was really important for the whole story to be able to actually develop something.
8:14
SPEAKER_01: It wasn't somebody else's saying, okay, go research this specific thing.
8:19
SPEAKER_01: James was very much like, what do you want to do?
8:22
SPEAKER_01: What's going to be impactful here?
8:24
SPEAKER_01: And it was just within the general area of make biosurfactants economically viable, which meant that I could really look around broadly.
8:32
SPEAKER_01: And he had done a whole bunch of research in integrated separation, which was kind of an analogous technology to what I was using.
8:40
SPEAKER_01: And I actually combined some stuff from the oil industry.
8:45
SPEAKER_01: So the oil water separation they did with some of the integrated separation that people were doing with things like foam fractionation.
8:52
SPEAKER_01: And that was something I think came out of the first couple of months of my PhD.
8:57
SPEAKER_01: The idea of doing it.
8:58
SPEAKER_00: But he provided this context, this kind of environment where I'm assuming you thought of the topic for your PhD.
9:06
SPEAKER_00: He didn't.
9:06
SPEAKER_01: His guidance was something to do with biosurfactants to make them economically viable.
9:11
SPEAKER_01: And then was really kind of instrumental in kind of figuring out how to brainstorm.
9:14
SPEAKER_01: Okay, what's interesting?
9:16
SPEAKER_01: Because I'm very much an ideas person.
9:18
SPEAKER_01: I'm very much a starter.
9:19
SPEAKER_01: I'm not typically so much a finisher.
9:22
SPEAKER_01: So he was very good at kind of guiding me towards, okay, does this make sense?
9:26
SPEAKER_01: Then when I had the ideas, how are we actually going to test them?
9:29
SPEAKER_01: Who could we work with to make these things happen?
9:32
SPEAKER_01: And I had a whole bunch of difficulty, like actually in the lab, because I'd never really worked in a lab before that.
9:38
SPEAKER_01: So, like typically, people doing a PhD, like a lot of them from say like a biology background, will have done a lot of experimental stuff in their undergrad.
9:46
SPEAKER_01: I was a chemical engineer, so I'd mostly done most of my work on paper.
9:50
SPEAKER_01: So actually getting experiments to work took me three years.
9:53
SPEAKER_01: Like even once I knew what it was I wanted to do.
9:56
SPEAKER_00: Yeah.
9:56
SPEAKER_00: And was it just you or did you have support around you?
9:59
SPEAKER_01: Yeah, there was other people in the group joined about the same time as me.
10:02
SPEAKER_01: So it was really an incredible group of people, which made it a lot easier and made it a lot of fun, which I think actually is something that is sometimes missing from both the kind of company or more in a company kind of perspective.
10:15
SPEAKER_01: Like I think RD needs a lot of fun.
10:18
SPEAKER_01: I'm actually gonna do a post about this in a few weeks on LinkedIn.
10:21
SPEAKER_01: But the kind of things which I find now really help, like I do things like improv comedy, and without doing those kind of things, I struggle to be innovative.
10:29
SPEAKER_01: Like when I actually stopped being full-time at HoloFirm, that actually unlocked, and then I went back in the lab with people for a couple of months whilst I was doing my handover.
10:39
SPEAKER_01: That unlocked like more ideas than I'd had for years because I wasn't kind of in the let's process things quickly, let's be efficient.
10:48
SPEAKER_01: I was in let's be creative, and it's a different kind of mindset.
10:51
SPEAKER_01: But that was super important as well in the PhD.
10:53
SPEAKER_01: We were there pranking each other in the morning and writing parody songs, and then that's the kind of thing which unlocked the creativity, I think.
11:01
SPEAKER_00: That is super interesting.
11:03
SPEAKER_00: Holy cow.
11:05
SPEAKER_00: When did you start making those kinds of connections between that level of creativity, kind of that space where you can express yourself in a completely different way, and your work?
11:16
SPEAKER_01: I think during the PhD, that was really the first time where I really had work to do, in a sense.
11:22
SPEAKER_01: I didn't have a job before that in a traditional sense.
11:25
SPEAKER_01: So that was really when there's, I mean, people don't really think of creativity being important in work, I would say.
11:32
SPEAKER_01: So it's something that you don't really learn kind of to be creative in work.
11:36
SPEAKER_01: It was something that being in the right environment, you can explore that.
11:39
SPEAKER_01: But I do think being in a different environment, it would have been really counterproductive.
11:44
SPEAKER_01: If I'd gone to corporate, I think I'd have really struggled because I'd have been trying to do things and they would have been pushing back.
11:50
SPEAKER_01: And I remember I did an internship with a big pharmaceutical company, and they asked me to look at a bunch of process improvements, and I found it really frustrating because there was a lot of things that could easily be done.
12:02
SPEAKER_01: But I mean, pharmaceuticals is obviously very change control oriented.
12:07
SPEAKER_01: So most of them they said, yeah, this would do what it looks like it would do.
12:11
SPEAKER_00: And a bunch of people have thought of that before, but we're not gonna do it.
12:15
SPEAKER_00: So, how long did it take you from the time you were working on your PhD to actually incorporate Holofirm and say, we're gonna go and pursue this, we're gonna do this, we're gonna try to bring this Biosurfactum to market.
12:25
SPEAKER_00: What period of time was that?
12:27
SPEAKER_01: So I would say it was still during my PhD.
12:30
SPEAKER_01: So I actually almost didn't get my PhD.
12:32
SPEAKER_01: My supervisor was pretty worried.
12:35
SPEAKER_01: And there was never really a doubt in my mind, but actually, that was another way James was kind of supportive.
12:41
SPEAKER_01: He was saying, look, I'm worried you might not get your PhD if you choose not to, that that's your call.
12:46
SPEAKER_01: But I would, because I had about a month's work left to do for about two years because I was part-time at the end, which enabled me to spend a lot of time doing the like starting holo firm because everything was so busy.
12:59
SPEAKER_01: We did our first VC round in 2019, and then I had like another year and a half still left, technically, to finish my PhD, but it's not that I was working on it, but I submitted like maybe three weeks before the deadline because I ended up having to tell our investor, look, don't expect me to answer uh for the next month because I've got to finish writing this.
13:21
SPEAKER_01: And he was like, Okay, that's cool.
13:23
SPEAKER_00: That's so funny.
13:24
SPEAKER_00: So it sounds like it was very early on.
13:26
SPEAKER_00: While you were working on your PhD, you decided actually we're gonna aim to bring this to market.
13:31
SPEAKER_01: I would say the day the experiment worked the first time.
13:34
SPEAKER_01: Then I was like, Yeah, we gotta bring this to market.
13:37
SPEAKER_00: And that creative process that you described, did that become a feature of your RD or of the company?
13:44
SPEAKER_01: I think I would say more of the company than just the RD.
13:48
SPEAKER_01: We didn't do as much RD for a lot of the history of the company because a lot of it was focused on scale up and then sales.
13:56
SPEAKER_01: So a lot of the time, even the RD people were looking at creative ways to do other things.
14:02
SPEAKER_01: And we really often switched the whole company focus to certain topics to really drive forward in a particular area, and it would switch to something else that needed to happen.
14:14
SPEAKER_00: So let me get into this.
14:15
SPEAKER_00: So your mindset, so PhD, you know you're gonna do this, you incorporate, you complete your PhD.
14:22
SPEAKER_00: You just commented that we didn't do as much RD, we were focused more on scale-up.
14:26
SPEAKER_00: How locked in then?
14:28
SPEAKER_00: It sounds like the design was locked in by the time you started.
14:32
SPEAKER_01: The downstream still leaded developing, but interestingly, that was something.
14:37
SPEAKER_01: So the person who developed it downstream primarily was had been a commercial director.
14:42
SPEAKER_01: So that's an interesting thing to dive into as well.
14:45
SPEAKER_01: That they didn't actually have a background in developing downstream processes, and we ended up making the downstream in like maybe I'm gonna say two or three months, and it was pretty much locked in from that point until the plant was built.
15:00
SPEAKER_01: And then, I mean, it was tunable, so it's been a little bit refined since then, but it was really call it bucket chemistry, is the term people often use that we use for our damn screen.
15:10
SPEAKER_00: That's interesting.
15:11
SPEAKER_00: So, your lab to market journey, at the time you guys decided to really accelerate, you had the upstream certainly locked in, you had a core design locked in.
15:21
SPEAKER_00: And then when it came to, I'm guessing some of the application engineering stuff later on, you had to further develop that.
15:27
SPEAKER_00: And we'll talk about kind of the unorthodox approach.
15:29
SPEAKER_00: It sounds like if you had a commercial director designing that, that's pretty interesting too on the downstream side.
15:35
SPEAKER_00: But you, and please correct me if I'm wrong here, but it sounds like when it came time to actually build the company, you were thinking of scale up immediately.
15:45
SPEAKER_00: You weren't thinking there's a whole bunch of RD we still need to do.
15:48
SPEAKER_01: Exactly.
15:48
SPEAKER_01: Because I mean the premise of the company was we can produce cheaper.
15:52
SPEAKER_01: So if you need to do RD, that's the you're not gonna be at the stage where we can produce cheaper.
15:57
SPEAKER_01: Because I mean, it's not like we were producing a novel chemistry, we were producing a chemistry that people discovered in the 60s, but hadn't been able to produce at an economically viable cost.
16:10
SPEAKER_01: So that's the difference between a novel chemistry, where then we have moved on to some other chemistries that aren't on the market, and it does change a little bit how the development worked, but we still focused on cost of production from day one.
16:23
SPEAKER_01: We would even calculate that before we had got a microbe in the lab from like what was available to say, okay, could this be viable?
16:32
SPEAKER_01: And then the first thing that was reported every time was what's the cost of production?
16:36
SPEAKER_01: And on the flip side, what cost and use can we get in formulation?
16:41
SPEAKER_01: So we'd always start formulating the products straight away as well.
16:45
SPEAKER_00: So your innovation lies then in the process of this chemistry that had existed since the 60s, but you found a way of processing it and delivering it ultimately at attractive economics compared to petrochemical alternatives.
17:01
SPEAKER_00: That was where the innovation lies.
17:02
SPEAKER_00: Am I right in that?
17:04
SPEAKER_01: Yes, I would say initially what we saw was okay, this is a much cheaper way to produce this than the one everybody else is doing by fermentation.
17:12
SPEAKER_01: This chemistry is only produced by fermentation.
17:15
SPEAKER_01: What it took longer to find out was this will be today, and today is cheaper than a lot of specialty petrochems already, and it better cost and use across a lot of applications than the petrochemical alternatives.
17:31
SPEAKER_01: And when we scale, we'll ultimately be cheaper than cheap petrochemicals.
17:36
SPEAKER_00: How long did it take you to shift the mindset from this is better for the world, it's going to make things cleaner, to forget that we need to compete on price?
17:47
SPEAKER_01: That was the whole point of the PhD.
17:48
SPEAKER_01: I'm a chemical engineer, so the whole kind of premise, well, unlike chemical engineering, we're really where it can play in industrial biotechnology effectively is we can make this cheaper.
17:59
SPEAKER_01: And I think that's a space that's been highly neglected in not just fermentation but new technologies.
18:05
SPEAKER_01: Like, I'm speaking to a lot of startups nowadays to like kind of help them on where are we going next.
18:11
SPEAKER_01: And like I was speaking to a company in a completely different field, tile manufacturing.
18:17
SPEAKER_01: And we ended up having the same conversation about what's the economics and okay, how does the economics work and what's driving that?
18:23
SPEAKER_01: And actually, a lot of the same things you can drive down the cost across completely different industries that you wouldn't expect.
18:31
SPEAKER_01: That people just aren't focusing on as a startup.
18:34
SPEAKER_01: They're focusing on, okay, yeah, we need to make this, we need to make this the right quality.
18:38
SPEAKER_01: But I mean, things like how efficient is your cooling system makes such a huge impact on ultimately the cost of production.
18:46
SPEAKER_01: Like even in industrial biotechnology, that's something we're we're missing quite often, the boring bits, but are really important in the economics.
18:54
SPEAKER_00: Yes.
18:55
SPEAKER_00: From the time that you had it worked, you were incorporated, you complete your PhD, walk us through some of the story, help us understand a little bit of HoloFirm's story and how it started to establish itself and what were some of the lessons along that journey.
19:11
SPEAKER_01: So I think the first kind of step, we spun out in 2018 and we were exploring how to get funded.
19:18
SPEAKER_01: We did a few programs with things like the Royal Academy of Engineering and iCure, which were really good and provided some of the early funding.
19:29
SPEAKER_01: But we were at a stage where we were maybe a week or two away from not being able to pay for our patent when iCOS Capital did our seed round.
19:38
SPEAKER_01: And that was kind of a repeating theme in the early days, that it was always a week or two away from uh total disaster that we managed to pull it out of the bag.
19:46
SPEAKER_01: And what was it like raising that early round?
19:49
SPEAKER_01: I mean, difficult because I'd also never pitch investors before.
19:52
SPEAKER_01: So at that stage, like I think I understood things on a business perspective a lot more than would have come across.
20:00
SPEAKER_01: So that some of the things, which I I did obviously learn a lot and have a lot of mistaken ideas in my head before that, but I would talk about, for instance, the fermentation metrics, and I would kind of assume that people understood a little bit what that meant.
20:16
SPEAKER_01: And like, okay, what's the relative cost?
20:18
SPEAKER_01: Like, even what's a surfactant?
20:20
SPEAKER_01: Like, sometimes investors would not necessarily know what's a surfactant, why is that important?
20:25
SPEAKER_01: How does the process for changing a surfactant work?
20:28
SPEAKER_01: And some of those things, like I didn't really understand that because I really understood we have made this process cheaper, but why is that process important?
20:35
SPEAKER_01: Not so much.
20:36
SPEAKER_01: There was an event called Imagine Chemistry, which was run at the time by Axon Nobel, became Nurion, where you spent four days with their experts across different parts of the business.
20:47
SPEAKER_01: It was really a great event, actually.
20:49
SPEAKER_01: It's a shame it's no longer happening.
20:51
SPEAKER_01: But they would help you across all the different areas, which was a massive support as well.
20:56
SPEAKER_01: And then Icos capital are there because they're one of Nurion, and Nurion are one of ICOS's LPs.
21:03
SPEAKER_01: So that was where the link was made.
21:05
SPEAKER_01: And I think that's really how we ended up with the first round being done.
21:09
SPEAKER_00: So they were an informed investor.
21:12
SPEAKER_01: They were an informed investor, yeah.
21:14
SPEAKER_01: And the other investors we talked to who were really interested were also pretty informed investors.
21:20
SPEAKER_01: Because an uninformed investor, I couldn't have informed at the time, really.
21:23
SPEAKER_00: Exactly.
21:24
SPEAKER_00: At that very early stage, Ben, what is important for investors?
21:29
SPEAKER_00: What do they want to hear about at that early stage?
21:33
SPEAKER_01: Yeah, I think that to some extent varies by investor.
21:36
SPEAKER_01: But I think the thing which was obvious that triggered our investors was traction.
21:42
SPEAKER_01: And I think obviously people talk about team a lot, but it's very difficult as a founder to see how team is being assessed.
21:49
SPEAKER_01: But I think in a lot of it was the traction because we had a whole bunch of companies who were saying I've paid for some samples, or I'm interested and I've given you.
22:00
SPEAKER_01: Heads of terms for a license deal or some other kind of real commercial metric.
22:05
SPEAKER_01: And I think that's what really converted all of our rounds, not just that seed round, but also our series A.
22:11
SPEAKER_01: That was why we got our Series A done at an attractive valuation, because we were able to point to a long list of companies who paid us for samples.
22:21
SPEAKER_01: And I think that's a big thing which startup companies can push for when they're launching.
22:25
SPEAKER_01: One, be really proactive in the market, but two, also make sure you're not just sending out samples, you're getting some real proof in cash from those customers that they're interested when you scale up.
22:38
SPEAKER_00: So I want to point something out for our listeners.
22:42
SPEAKER_00: We've had a guest recently, a guy named Jamie Dean Walters, who's the founder and CEO of Calixia based in France.
22:48
SPEAKER_00: And he was saying when he was CTO of his company, they had already, I think, hired a CEO who hadn't joined yet.
22:54
SPEAKER_00: But he said in one evening he wrote to something like a hundred CEOs and CTOs on email, trying to get appointments, trying to get meetings, trying to engage them with their activity.
23:04
SPEAKER_00: You were talking about how you learning lessons from trying to get sponsorship in badminton, you applied those to this and you started emailing or getting in touch with various groups about your technology very early on.
23:18
SPEAKER_00: And so you didn't wait for anyone to tell you you didn't wait to hire a commercial leader or anything like that.
23:23
SPEAKER_00: You took it upon yourself to do it.
23:25
SPEAKER_00: How much came out of that activity that you initiated versus what came out later on when you would have hired a commercial team?
23:34
SPEAKER_01: Well, I think if we hadn't done that, we wouldn't been able to do the first round.
23:38
SPEAKER_01: So that was, I mean, we did the first round when it was me and my supervisor.
23:42
SPEAKER_01: He took a sabbatical, but I don't think at that point he had taken a sabbatical.
23:47
SPEAKER_01: So it was really, okay, that that's the commercial team and the technical team was me at the time.
23:51
SPEAKER_01: The two of you.
23:52
SPEAKER_01: Yeah, yeah, yeah.
23:54
SPEAKER_00: Okay, wow.
23:55
SPEAKER_00: So it was really just you doing all of that.
23:57
SPEAKER_00: And just out of interest, when you were making contact with these prospective partners, maybe customers, what did they want to see?
24:06
SPEAKER_00: What was of interest to them?
24:08
SPEAKER_00: How much did you have to have prepared in order to sensibly engage with them?
24:13
SPEAKER_00: And also, sorry, there are a few questions in this.
24:15
SPEAKER_00: At what level were you contacting them?
24:17
SPEAKER_01: So I would say I'd contacted a lot of people in the organization.
24:22
SPEAKER_01: So early days, like people or companies which were really a good target, like say a biaserfacting company, I contacted like, on some cases, 50 people within one organization.
24:32
SPEAKER_01: And it was like the 50th person who responded.
24:35
SPEAKER_01: And like for one of the deals we end up getting done, it really was like that.
24:39
SPEAKER_01: Like all of the people who should have been interested ignored me.
24:43
SPEAKER_01: And then it was like some random person who actually responded and then put me in touch with the right person.
24:48
SPEAKER_01: But I would say that the people later on who I found it was best to engage with were more senior where possible.
24:57
SPEAKER_01: Particularly people who could push an initiative through.
25:00
SPEAKER_01: If you could be in touch directly with directors and CEOs, interestingly, you're also potentially more likely to respond, which is kind of the opposite of what people kind of expect.
25:10
SPEAKER_01: People think CEOs will be too busy to respond.
25:13
SPEAKER_01: Like I would, for instance, when I was in Holofirm respond to every single like relevant LinkedIn message that I received as well.
25:22
SPEAKER_01: But people do answer.
25:23
SPEAKER_01: You had the like the fraction of people who are interested is really small in a startup company because it is only people who are really gonna be the innovators.
25:33
SPEAKER_01: You're only gonna have one or two percent of people, like especially at that really early stage, who are gonna say this is interesting.
25:39
SPEAKER_01: And like we as Holofirm spoke to a lot of startups, but couldn't work with them because it was too early often.
25:45
SPEAKER_01: But there's always gonna be the right, like it depends on the technology as well, the right technology at the right time, and you've just got to find people who really need that solution to be able to engage with.
25:56
SPEAKER_00: And the kind of the reason for them engaging with you was it down to the fact that you made this experiment work.
26:02
SPEAKER_00: You made an experiment work, you demonstrated something, and you could demonstrate that.
26:07
SPEAKER_00: You haven't scaled anything yet, but you've demonstrated you can kind of make something work at a particular scale.
26:13
SPEAKER_00: Was that it or was there more?
26:14
SPEAKER_01: Exactly.
26:15
SPEAKER_01: Yeah.
26:15
SPEAKER_01: So we demonstrated so people from fermentation metrics can calculate what production cost is going to be.
26:22
SPEAKER_01: And in biosurfactant production, it's pretty much the fermentation cost is the production cost.
26:28
SPEAKER_01: And we crunched the numbers and said we can produce with our technology for less than half what you guys can.
26:34
SPEAKER_01: Let's have a chat.
26:35
SPEAKER_01: So then we did a bunch of scale-up with a few different biosurfactant companies who said, Yeah, okay, that sounds pretty interesting.
26:42
SPEAKER_01: And then we explored options to license.
26:45
SPEAKER_00: So that's when you started exploring the options to license.
26:48
SPEAKER_00: I get it.
26:48
SPEAKER_00: All right.
26:49
SPEAKER_00: And so then tell me a little bit about kind of you raised the seed round, and then what does the early team look like?
26:55
SPEAKER_00: You've got to build some capability in there.
26:57
SPEAKER_00: And so, what was your thinking on that?
26:59
SPEAKER_00: What kind of came first?
27:00
SPEAKER_00: What were the key pieces that you had to get into place and that you did get into place?
27:05
SPEAKER_01: So I would say key thing, especially at seed round stage, is effective generalists.
27:11
SPEAKER_01: So a job description at seed round is a problem, in a way.
27:15
SPEAKER_01: I think if I started again, I would have no job descriptions at seed round.
27:19
SPEAKER_01: And I would really do that in part to also select for people who are comfortable with that.
27:24
SPEAKER_01: Because I think that's really a challenge.
27:25
SPEAKER_01: If somebody wants to do a certain task, that task isn't going to exist for like by the time you've joined.
27:31
SPEAKER_01: If it's something that needs doing today, otherwise you're going to have a problem.
27:34
SPEAKER_01: But the people that we did hire were really effective generalists.
27:38
SPEAKER_01: We hired somebody who'd run a travel company that has an office manager, and they were a really effective generalist.
27:45
SPEAKER_01: They actually ended up in our HR function later on.
27:48
SPEAKER_01: We hired a couple of scientists who were running some of our experiments in the lab.
27:52
SPEAKER_01: James joined on a sabbatical, and I think this was actually some knowledge we did need.
27:57
SPEAKER_01: We hired somebody who designed plants for consultancy, so that was important, and probably a specialist specialist knowledge who was helpful.
28:07
SPEAKER_01: And then also we hired the person who went on to become our commercial director, kind of by accident, we were looking for a formulation specialist because we were looking more okay, and a formulation and downstream processing.
28:22
SPEAKER_01: So that's how he came into the downstream processing part as well.
28:26
SPEAKER_01: And he had been commercial director, but was very hands-on and kind of said, Look, this isn't the right role for me, but let's figure out what the right role is, and we'll figure that out over time.
28:36
SPEAKER_00: But then he integrated well into the business, apparently.
28:39
SPEAKER_01: Yeah, yeah.
28:40
SPEAKER_01: So I mean it's very much about doing at the early stage.
28:42
SPEAKER_01: So I remember his first day, it was a bit mad.
28:46
SPEAKER_01: One of the first things he did was say, Okay, this filing system on the computers is wrong.
28:50
SPEAKER_01: I've moved it all around.
28:51
SPEAKER_01: That was like his first hour in the business, which was pretty mad.
28:55
SPEAKER_01: But like he would go do things and get them done.
28:58
SPEAKER_01: And that's really what you need.
29:00
SPEAKER_01: Like, we needed to build a new lab.
29:01
SPEAKER_01: And he was very much involved in okay, I'll call some people up and get them to build a lab.
29:06
SPEAKER_01: And a lot of those things you can just do.
29:09
SPEAKER_01: And that's the kind of person he was and is, and that's what we needed.
29:13
SPEAKER_00: And what were the expectations of the seed investors at that stage?
29:16
SPEAKER_00: Did they have a clear set of milestones they wanted you to achieve?
29:20
SPEAKER_01: Not so much, I would say.
29:22
SPEAKER_01: So I would say the way uh seed investor meetings would work, Peter uh Van Helderen, really supportive, great investor and person to have on the team, would fly over to Manchester, come and sit in the office and say, What's your biggest problem?
29:36
SPEAKER_01: And brainstorm on it.
29:37
SPEAKER_01: And actually, when we did the seed investment, we actually asked for a quarter of the money that the seed investment ended up being for because we said we're just going to license this, so we don't really need a lot of cash.
29:50
SPEAKER_01: He said, Well, I think you will, but sure, if you don't, you don't need to take it and split it into tranches that we could cool down, which would have really been a problem if we didn't have, because we'd have had to go out for more investment with minimal additional proof points.
30:05
SPEAKER_01: And we actually had a problem early days in the lab that the experiment stopped working as well.
30:10
SPEAKER_01: And we were like, we have no idea why this is happening, we can't get anything to produce.
30:14
SPEAKER_01: And we figured out why in the end, which actually helped us a lot later on, but there was like a six-month period where nothing worked.
30:21
SPEAKER_01: So we had to say to Peter, nothing's working.
30:24
SPEAKER_01: Like, we've no idea what's happening.
30:26
SPEAKER_01: We've tried everything and nothing's working.
30:28
SPEAKER_01: And he was like, That's fine.
30:30
SPEAKER_01: That's the kind of thing we expect.
30:32
SPEAKER_01: Go fix it.
30:33
SPEAKER_01: Let me know if you need any help.
30:34
SPEAKER_01: There's this guy and this guy who can help you if you want me to make an introduction.
30:38
SPEAKER_01: So that was the kind of approach that he took.
30:40
SPEAKER_00: But you were getting the useful counsel from him, and he was able to, well, I suppose listen, put things into context, not overreact if it sounds.
30:49
SPEAKER_00: So again, I think that kind of comes back to that informed view of this is how this innovation goes, this is how these things work.
30:56
SPEAKER_00: So this is all in line with that.
30:58
SPEAKER_00: I'm not going to start throwing chairs in the office because you're telling me these experiments aren't working anymore.
31:04
SPEAKER_00: And he was also able to kind of utilize his network and bring in other expertise and capability when you needed it.
31:10
SPEAKER_01: Exactly.
31:10
SPEAKER_01: Yeah.
31:11
SPEAKER_01: Yeah, I would say the more things went wrong, the more Peter would say this see the funny side.
31:16
SPEAKER_01: So he made a low stress environment as well.
31:18
SPEAKER_01: It helped with that, which is obviously what you need.
31:21
SPEAKER_00: Exactly.
31:22
SPEAKER_00: And what were you doing this time?
31:23
SPEAKER_00: So you're CEO of this.
31:25
SPEAKER_00: How are you spending your time?
31:26
SPEAKER_00: What did that mean as CEO?
31:30
SPEAKER_01: That very much varied depending on what was happening at the time.
31:33
SPEAKER_01: A lot of it was speaking to customers or collaborators, figuring out what a potential scale-up would look like, what the what a license deal would look like.
31:43
SPEAKER_01: Speaking to a lot of people who might know and be able to help with that as well, because that's something we didn't have experience of.
31:50
SPEAKER_01: So we needed to also get external support with that.
31:53
SPEAKER_01: And then also being in the lab when things needed that as well.
31:57
SPEAKER_01: So there was a lot of experiments that I was doing in the very early days as well with the team.
32:02
SPEAKER_00: But where do you think you were the most useful?
32:04
SPEAKER_01: That's a good question.
32:05
SPEAKER_01: I think probably generally the commercial side, like doing things unconventionally commercially.
32:13
SPEAKER_01: Like, for instance, contacting a lot of people.
32:16
SPEAKER_01: That's something when I talk to commercial people now, it makes them really uncomfortable.
32:20
SPEAKER_01: Almost all of them.
32:21
SPEAKER_01: So when we were hiring, we were saying, okay, look, this is a numbers game.
32:25
SPEAKER_01: And like, especially if you get a commercial person from a big company, they would say, nah, this is a long-term relationship game.
32:31
SPEAKER_01: But as a startup, it can't be because you don't have a long-term relationship.
32:35
SPEAKER_01: And most people are not interested in what you're building.
32:38
SPEAKER_01: For instance, also like take or pays.
32:40
SPEAKER_01: So if you speak to people in the industry, everybody says, nah, I wouldn't like a take or pay.
32:46
SPEAKER_01: And that's the kind of thing which, not having been in the industry, you can say, look, that's what we need.
32:51
SPEAKER_01: So we need to go and find the people who are going to be prepared to do that, rather than say, okay, what's the best deal we can get with this list of five companies that we've prioritized, using market data and intelligence from a bunch of consultants, which is what a lot of people will advise you to do, and really think about who the best customer is and then figure out how to get a deal with them, rather than say, okay, what kind of deal do we need?
33:17
SPEAKER_01: And then who might do that deal?
33:19
SPEAKER_01: But then really explore, like, okay, is this the right kind of deal?
33:22
SPEAKER_01: What other kind of deals could work?
33:24
SPEAKER_00: Well, maybe it comes back to that creativity we were talking about earlier.
33:29
SPEAKER_00: But the willingness and the courage to be creative commercially and to go off the kind of the orthodox path, which is to say, actually, the market for this is six main companies.
33:38
SPEAKER_00: You've got to do a deal with them, and this is what the deal is going to look like.
33:42
SPEAKER_00: And you need to be producing at this level with this kind of quality, this kind of consistency, et cetera, et cetera, in order to do a deal with them.
33:49
SPEAKER_00: So just bide your time, raise enough capital until you can do a deal with one of these companies.
33:54
SPEAKER_00: Well, actually, there may be another way, and I guess that's the point you're making.
33:58
SPEAKER_01: Yeah.
33:58
SPEAKER_01: And I think it's an interesting thing because people talk about startups needing to focus and needing to like have a defined plan, which is true.
34:09
SPEAKER_01: And eventually you do need to get there.
34:11
SPEAKER_01: But if I'm selling, if in the first 30 seconds I also realize they're not buying what I'm selling, I'm coming up with a whole bunch of new ideas about what I might be selling to them.
34:21
SPEAKER_01: So early days we sold JDAs where we were, like, for instance, a company was looking, like wanted to see if their sugars would work for fermentation.
34:30
SPEAKER_01: So we spent a couple of weeks in the lab proving that out.
34:33
SPEAKER_01: But like that made us some cash, which we needed.
34:35
SPEAKER_01: Like at some point, before we had our first investor, I was selling biosurfactants for a Chinese company on a retainer, like on behalf of HoloFirm, to get some cash in the door.
34:48
SPEAKER_01: And that we'd gone there to meet with them, like during my PhD, and then we were looking at selling their biosurfactants whilst we were waiting for our lab even to get online.
34:58
SPEAKER_00: It's just what you have to do in order to get the wheels moving a little bit and to get some cash through the door.
35:05
SPEAKER_00: How many ideas that really lasted and that impacted the longer-term strategy of the business came through that approach, would you say?
35:13
SPEAKER_00: That kind of we're gonna try a whole bunch of stuff and see if it works.
35:17
SPEAKER_01: I would say most of the ideas in the business would come from that perspective.
35:22
SPEAKER_01: Throughout the course of what we were doing, we would always experiment with, okay, like how is this gonna work?
35:29
SPEAKER_01: And even sometimes those experiments are on paper.
35:31
SPEAKER_01: But like, for instance, we would do on a technical perspective, we called it a cost reduction sprint when we were really doing a commercial focus, and the two things that impacted the commercial were selling and reducing cost.
35:44
SPEAKER_01: So we had a commercial sprint and a cost reduction sprint alongside that.
35:48
SPEAKER_01: But we would have like one two-day workshops where we would think about different ideas and then we would do the maths on them and see, okay, what impact would this have?
35:59
SPEAKER_01: But even doing those things, like it was part of the point of that was to say, okay, let's be really creative about what kind of thing might help.
36:06
SPEAKER_01: And like some of the biggest things that like came out of those kind of things were like, oh, you know what?
36:11
SPEAKER_01: Actually, looking for uh tax rebates on our electricity makes a huge impact on production cost, and it's quite easy to do.
36:20
SPEAKER_01: So, like, although that sounds like a really like mundane thing, that's actually quite a creative solution to reducing production, plant production cost.
36:30
SPEAKER_00: So at one point you're gonna license, and then you decide it's not working, and then you decide on another path.
36:37
SPEAKER_00: Talk a little bit about that transition, what were the factors involved, and what the new journey looked like thereafter.
36:43
SPEAKER_01: Yeah, so I would say I think a big part of that was how much conviction do we have versus everybody else?
36:50
SPEAKER_01: So when you talk to people, it wasn't that we couldn't have done a license deal.
36:54
SPEAKER_01: I think we could have got license deals done, but nobody else had as much conviction as we did.
37:00
SPEAKER_01: And this is in the bias of acting game, other players in the chemical industry would also struggle to actually work the technology.
37:07
SPEAKER_01: But what we saw an opportunity for uh industry-changing technology where other people either were startup companies who didn't have the deep pocket to pay for a license deal, or they were big companies who were trying to capture like the high-added value market niche.
37:24
SPEAKER_01: And then we were talking to customers alongside those people, and we were saying, okay, well, we weren't really focusing on the customers, but because we were talking to everybody, the customers were actually way more engaged than potential licensees.
37:38
SPEAKER_01: And we were looking at doing a scale-up with a couple of scale-up facilities, and then we said, this is really expensive.
37:45
SPEAKER_01: And then we were like, how much would it cost us to build a pilot?
37:48
SPEAKER_01: And we figured it would cost us less to build a pilot than it would to pay somebody else, like the government-funded pilot schemes, to do the piloting for us, to do just a couple of batches.
38:00
SPEAKER_01: So then we said, Okay, well, it makes sense to do a pilot.
38:02
SPEAKER_01: And then we said, okay, well, we've got some customers who want this, and we've got a pilot.
38:06
SPEAKER_01: And then it was pretty quick, like maybe one, two days.
38:09
SPEAKER_01: We said, okay, let's pivot.
38:11
SPEAKER_01: Let's try to make this work and see if this now works.
38:14
SPEAKER_01: And then, yeah, we got a lot more traction from that route.
38:17
SPEAKER_01: And how long did it take you to scale up your pilot?
38:20
SPEAKER_01: I think four months it took us to build.
38:22
SPEAKER_01: Okay, that wasn't long.
38:24
SPEAKER_01: A lot of the kits was homebrew kit or like semi-homebrew kit.
38:29
SPEAKER_01: So it was like 150-liter plastic tanks, which is also interesting.
38:33
SPEAKER_01: A lot of people would say you can't build a fermentation plant with plastic tanks.
38:38
SPEAKER_01: But like these things were costing like a few hundred pounds.
38:41
SPEAKER_01: And the one thing we did buy was the bioreactor, and which is expensive, but I think I've also seen people building those.
38:49
SPEAKER_01: I think if we'd had more time, we might have been t and less cash, we'd have probably been tempted to build something ourselves as well.
38:57
SPEAKER_01: So we bought that and it was relatively off the shelf.
39:00
SPEAKER_01: And the rest of it was cobbled together pipework, an IBC with an IBC mixer, and then just some brewery tanks.
39:09
SPEAKER_00: And how successful was that?
39:10
SPEAKER_00: How quickly did you start producing the kind of material that you needed?
39:13
SPEAKER_00: First batch.
39:14
SPEAKER_00: Wow, okay.
39:16
SPEAKER_00: So your process really worked.
39:17
SPEAKER_00: You had it nailed down.
39:18
SPEAKER_00: You had that process nailed down.
39:20
SPEAKER_01: I made a calculation error, and we missized the agitator.
39:26
SPEAKER_01: But then I mean we fixed that pretty quickly.
39:28
SPEAKER_01: Like that limited our throughputs rather than the quality.
39:32
SPEAKER_01: But then we resized that, and I mean that was like weeks, not months.
39:37
SPEAKER_01: And then it worked and it it exceeded metrics that we were hitting in the lab pretty quickly.
39:42
SPEAKER_00: And then from there to your commercial plant, what kind of time period was that?
39:47
SPEAKER_01: That took us about a year to build from getting the keys.
39:51
SPEAKER_01: It took us like we spent a little time raising the money.
39:54
SPEAKER_01: But yeah, from getting the keys to the site, it was just over a year.
39:58
SPEAKER_01: We I think we got the keys first of January, or like first working day, and then first batch was in March the following year.
40:05
SPEAKER_00: When you were raising that, I think it was was it 18 and a half million?
40:10
SPEAKER_00: Something like that, yes.
40:11
SPEAKER_00: In that round, again, what were the investors looking for?
40:14
SPEAKER_00: What did they want to see when they were committing funds for that?
40:17
SPEAKER_01: The big thing was customers paying for samples.
40:22
SPEAKER_01: So we had over 150k in sample payments from customers.
40:26
SPEAKER_01: And people were buying the product from our so our pilot plant was sold out, it was running as a commercial plant.
40:31
SPEAKER_01: So we were producing, I don't know, a ton a month and scrambling to get enough material to go out to customers because people were formulating into finished products.
40:40
SPEAKER_01: So even from our lab, we made our first commercial product.
40:44
SPEAKER_00: Let me just kind of go back real quick.
40:45
SPEAKER_00: What was the qualification cycle?
40:47
SPEAKER_00: And with whom was it?
40:49
SPEAKER_00: Because normally these things take longer to qualify.
40:52
SPEAKER_00: And they want to see it kind of through the supply chain.
40:54
SPEAKER_00: They want to see a cycle through the supply chain to make sure it's going to be okay.
40:57
SPEAKER_00: Those qualification cycles can hang around for a while, but you seem to move much, much faster.
41:02
SPEAKER_01: Yeah, and there were some qualification cycles which did take a long time.
41:06
SPEAKER_01: Like so, when we got into the big supermarket, that took two, three years to be able to qualify for them.
41:15
SPEAKER_01: And also they wanted some evidence we had a commercial plant.
41:18
SPEAKER_01: But small customers could do it in three months.
41:22
SPEAKER_01: So our first ever customer was making in a kitchen, and as long as the product worked and was safe, they knew we could make it out of the lab.
41:30
SPEAKER_01: So there was no supply chain risk for them because we'd send them a bottle that we made in the lab and they'd be able to formulate it in.
41:37
SPEAKER_01: But even like we found later, like some reasonably sized customers, people taking drums, were able to qualify in that kind of time period, say three to six months, particularly outside of Europe.
41:50
SPEAKER_01: So I think like we had an Indian distributor who had maybe 20 customers within kind of six months of us kind of pushing the market there.
42:00
SPEAKER_00: So let's kind of get into your commercial strategy a little bit.
42:03
SPEAKER_00: Kind of walk us through post, we're not going to pursue licensing right now.
42:07
SPEAKER_00: We're going to start producing stuff and we're going to work through these different channels.
42:11
SPEAKER_00: Walk us through kind of the development of your commercial strategy.
42:14
SPEAKER_00: What were the key points that made it work?
42:16
SPEAKER_01: So I think, and again, at that point, we didn't put enough effort into the commercial strategy.
42:21
SPEAKER_01: Like you hear about a lot of the things we did commercially, and there was a lot of time put into commercial, but that was not insufficient.
42:29
SPEAKER_01: If I went again, I would be putting a lot more effort into commercial from the first day.
42:34
SPEAKER_01: I would be hiring maybe somebody to do sales the very first hire.
42:38
SPEAKER_01: But that was something so we kind of figured people are doing take or pays, and the market is excited for this.
42:46
SPEAKER_01: We don't need to do a whole bunch of commercial work.
42:48
SPEAKER_01: And we kind of then focused on plant scale-up.
42:51
SPEAKER_01: We then decided later on, okay, one of the things we need to do is show customers how these work because everybody was interested.
42:58
SPEAKER_01: Everybody is saying biosurfactant's great, but then people try to formulate them and they try to replace often the wrong ingredient with the biosurfactant.
43:08
SPEAKER_01: So SLES, which is the ingredient which makes all the foam, is the thing which people knee jerk to because it's the biggest surfactant in the formula, and they would replace it with sulfur lipids and say this doesn't foam.
43:20
SPEAKER_01: And sulfur lipids like don't foam.
43:22
SPEAKER_01: It would be like replacing a car tire with an engine and saying it doesn't work because of course it won't work.
43:29
SPEAKER_01: But then, so we made what we called CTS customer technical service team, who built a load of formulations and compared them to what they happen.
43:38
SPEAKER_01: So we could show cost and use, we could calculate what the customer cost would be and rebuild a formula that would be cheaper for them and show them it could perform better.
43:47
SPEAKER_01: And then we hired salespeople around the world who could go out with our distributors.
43:52
SPEAKER_01: So that knowing what the sale was was one aspect, and the other aspect was having people who understood that.
44:00
SPEAKER_01: Could go out with a distributor to be front of mind and then also prove to the distributor that made sense for them to sell.
44:08
SPEAKER_01: Because I think we found the distributors early days, if you just threw it over the fence, the people would be bought in at the senior level and the people making the decision we're going to add this to our portfolio.
44:19
SPEAKER_01: But to actually sell it, it's different people.
44:22
SPEAKER_01: So you need to engage with the people who are actually selling, not just through kind of a technical seminar or those kind of things.
44:28
SPEAKER_01: You need to be out with them selling that they see, oh, people want to buy this, even though at that point it's more expensive than some of the other ingredients they have in the portfolio.
44:38
SPEAKER_01: It works cost and use.
44:40
SPEAKER_01: Oh, that's the point where people will go for this.
44:43
SPEAKER_00: It sounds like you had to create a two-pronged strategy.
44:46
SPEAKER_00: You had to get the distribution channels in place and understand how to do that.
44:51
SPEAKER_00: But then you also had to complement them with actual salespeople from HoloFirm who were going to work with them and get them clear on the narrative, on the benefits, on the features, on the solution overall.
45:04
SPEAKER_00: And then work with them on articulating that value proposition to their end customers ultimately and staying with them and supporting them.
45:12
SPEAKER_01: Yeah, I would say like being there for the first 30 meetings and then being there for the important meetings afterwards.
45:18
SPEAKER_01: And we switched this to a whole company focus.
45:21
SPEAKER_01: So we would be and have all of the sales team, plus Richard, who was the managing director and myself, traveling around the world with the distributors to go to the customers.
45:32
SPEAKER_01: Plus, then a lot, for instance, like normally some of the salespeople would work on, say, lead development, but we switched a bunch of our scientists and our office staff into, for instance, generating leads.
45:46
SPEAKER_01: We asked a lot of our scientists to then move into customer technical service, and they would then be doing the customer work and the interface with the customer.
45:55
SPEAKER_01: So we would have like half the company on the road with customers out at trade shows promoting the product.
46:04
SPEAKER_00: Wow.
46:04
SPEAKER_00: So just that super strong commercial focus.
46:08
SPEAKER_00: Once you started learning those lessons, and you've said that if you could do it all over again, you'd adopt that approach almost from day one.
46:15
SPEAKER_01: Absolutely.
46:15
SPEAKER_01: I'm working with a few startup companies at the minute and talking to them about their commercial approach.
46:20
SPEAKER_01: And there's not been a company that I've been to so far who I've not said, pause everything except commercial.
46:26
SPEAKER_01: That's literally been because I've said you're so far ahead on technical and everything else than you are on commercial.
46:33
SPEAKER_01: You should have every single person in the company working on commercial for the next two years.
46:38
SPEAKER_00: But in a way, even when you were still completing your PhD from the sound of it, you are contacting prospective customers and partners on your own.
46:47
SPEAKER_00: So you already had the outreach, it sounds like.
46:50
SPEAKER_01: Yeah, but I would say still, even with that amount of commercial focus, that was not enough.
46:55
SPEAKER_01: Because when we started building, we were focused on scale up and those kind of things.
47:00
SPEAKER_01: And I think actually the commercial side drives a lot of the other side.
47:04
SPEAKER_01: So I think if you put more focus on that earlier on, you get better feedback from the customer, you build the right thing more, and then you have funding.
47:12
SPEAKER_01: So I would even think can you fund this entirely from customers?
47:16
SPEAKER_01: You're gonna get a lot more attractive terms for VCs if you've got a lot of customers paying.
47:21
SPEAKER_01: But even could you actually go through the whole piloting phase?
47:25
SPEAKER_01: Even fundraise for a plant just from customer payments.
47:29
SPEAKER_01: Like if you can build a capital efficient plant, that wouldn't seem to be something that would be impossible from my perspective.
47:35
SPEAKER_00: That's so interesting.
47:36
SPEAKER_00: Is HoloFirm self-sufficient now?
47:38
SPEAKER_00: Does it require any more external capital?
47:41
SPEAKER_01: So it should reach profitability from this next phase of scale up.
47:45
SPEAKER_01: But I think, I mean, like we're looking to grow rapidly.
47:48
SPEAKER_01: So it makes sense that you'll be looking to attract more capital down the road because you want to scale faster.
47:54
SPEAKER_00: Sure.
47:55
SPEAKER_00: Last kind of part of our discussion that I'd like to focus on is a little bit of your role.
47:59
SPEAKER_00: How did it ultimately evolve?
48:01
SPEAKER_00: I understand you've recently stepped away.
48:03
SPEAKER_00: Kind of talk us through that, why you decided to take that decision, and maybe what some of your plans are going forward.
48:10
SPEAKER_01: Sure, yeah.
48:10
SPEAKER_01: So I think as you scale, and we were coming into kind of series B kind of phase, we'd built a first plant.
48:16
SPEAKER_01: We were scaling that up.
48:18
SPEAKER_01: It's a much more planned and structured requirement.
48:22
SPEAKER_01: And I'm very much, let's experiment and do things fast.
48:25
SPEAKER_01: So some of the requirements of the role changed.
48:28
SPEAKER_01: Alongside that, the kind of management and also the financial management changed.
48:33
SPEAKER_01: We were starting to talk to the kind of financiers who would be much more detail-oriented and wanted to understand exactly what the financial plan was, like how this was going to lead to returns and when, rather than big picture.
48:48
SPEAKER_01: And at this point now, new investors are not so interested in the technology, which was where I could really sell the story as well.
48:57
SPEAKER_01: So it made sense to find somebody else who had experience raising large amounts of money for the next phase.
49:04
SPEAKER_01: And then Charlie came in, who's raised uh circa a billion dollars in previous startups, which meant that I could then take the step into innovation.
49:14
SPEAKER_01: But I think what I also saw moving into innovation, like I'd had a lot of ideas that we had picked up at some time or other during the growth.
49:23
SPEAKER_01: But a lot of what I was looking at then would be kind of ideas that I already had and kind of thinking again, so it was less fresh because I've been working on the same thing for so long.
49:34
SPEAKER_01: And the team now that we have are really exceptional.
49:37
SPEAKER_01: Like we've got some incredible innovators in the team.
49:40
SPEAKER_01: So didn't really need me so much at that point.
49:44
SPEAKER_01: And I still work at Holotherm on a part-time advisory basis, and it makes sense that sometimes I can take a look at things and say, Oh, what about this or this idea?
49:52
SPEAKER_01: But me being there running the innovation team didn't make as much sense.
49:57
SPEAKER_01: And it means that then I have the opportunity to think more broadly.
50:00
SPEAKER_01: So I'm really looking at the minute to see what are the challenges in industrial biotechnology, some of them that we encountered are holo firm, some of them other challenges, see what the opportunities are, work with a few different people, and then with a view to either join a company where I can make a big impact over the next year, two years, or start something new.
50:22
SPEAKER_00: Ben, it's an amazing story.
50:24
SPEAKER_00: There is so much fresh thinking that it sounds like you brought to this the creativity, the flat out hustle, too, which again is not comfortable for I think a lot of scientists and researchers.
50:39
SPEAKER_00: That kind of I'm gonna contact 100, 200 executives in this industry, and I'm gonna start having conversations and I'm gonna let them know about what we're doing.
50:48
SPEAKER_00: It's just that level of activity, and it is activity and it is discussions, and it is then using the data from that to kind of impact your thinking on how this thing evolves, on how the thing should evolve, as opposed to sitting in your room with your team and drawing out this beautifully crafted plan that looks great on paper and is gonna be the foundation of a wonderful narrative, but may not align with reality at all.
51:13
SPEAKER_01: No, appreciate you.
51:14
SPEAKER_01: Thanks, Chris.
51:15
SPEAKER_01: But yeah, we definitely did uh like very briefly the second bit before testing it.
51:19
SPEAKER_01: And yeah, like you say, often the plan doesn't align at all with reality outside the room.
51:25
SPEAKER_00: Ben, thank you so much for your time this morning.
51:28
SPEAKER_00: It has been wonderful talking to you.
51:30
SPEAKER_00: I hope we can have you back at some stage and you can share with us what you're gonna do next.
51:35
SPEAKER_01: Appreciate it, Chris.
51:36
SPEAKER_01: It was really fun conversation.
51:38
SPEAKER_00: Thanks very much.
51:38
SPEAKER_00: Thank you.
51:39
SPEAKER_00: You've been listening to the Lab to Market Leadership Podcast, brought to you by Deep Tech Leaders.
51:45
SPEAKER_00: You can find out more about us on LinkedIn, Spotify, Apple, or wherever you get your podcasts.