Latest / Lab to Market Leadership with Chris Reichhelm / Commercialising Novel Chemistry | Tim Cesarek

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Commercialising Novel Chemistry | Tim Cesarek · Lab to Market Leadership with Chris Reichhelm

• 0:00
  Tim Cesarek: We all have that temptation, right?
• 0:02
  Tim Cesarek: If you are driven to perfection, which many leaders are, it's hard to manage that dichotomy, right?
• 0:12
  Tim Cesarek: Which is that dichotomy of having something that you know will work and be perfect versus the dichotomy of it's good enough.
• 0:22
  Tim Cesarek: And so managing that is, is, is critical, finding that right balance.
• 0:27
  Tim Cesarek: So I would say categorically, I have not seen a situation where that is not of concern, right?
• 0:35
  Tim Cesarek: Where every business struggles with this.
• 0:38
  Tim Cesarek: It's just how you're able to manage those shadows, right?
• 0:41
  Tim Cesarek: How can you tamp them down and, and, and, and recognize that you have to trust in the team that you've built and trust that you're going to come to market with a minimum technical solution that will work.
• 0:57
  Chris Reichhelm: Welcome to the Lab to Market Leadership Podcast.
• 1:01
  Chris Reichhelm: Too many advanced science and engineering companies fail to deliver their innovations from the lab to the market.
• 1:07
  Chris Reichhelm: We're on a mission to change that.
• 1:09
  Chris Reichhelm: My name is Chris Reichhelm, and I'm the founder and CEO of Deep Tech Leaders.
• 1:14
  Chris Reichhelm: 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.
• 1:25
  Chris Reichhelm: Join us.
• 1:25
  Chris Reichhelm: If you're building an industrial technology business, particularly a chemical engineering business, it could be waste to energy, it could be novel chemistry, it could be advanced materials, whatever, you need to listen to this week's podcast.
• 1:41
  Chris Reichhelm: I'm joined by Tim Cesarek, who's an American executive who's operated across a number of those different industries.
• 1:47
  Chris Reichhelm: He's been an investor, he's been in corporate innovation, he's operated in commercial leadership roles with biofuels groups like Enerchem and Gevo, and he's currently CEO of Synata Bio.
• 2:01
  Chris Reichhelm: Tim is going to talk to us today, I hope, about what it takes to take a novel chemical engineering company from lab to market.
• 2:11
  Chris Reichhelm: With all of the different commercial, operational, financial, and technological aspects that go with that, Tim has been doing this for a long time.
• 2:21
  Chris Reichhelm: He's operated on a global level.
• 2:24
  Chris Reichhelm: He's created partnerships.
• 2:25
  Chris Reichhelm: He's created a huge amount of value for the companies of which he's been a part.
• 2:29
  Chris Reichhelm: And so I'm hoping that he's going to have the kind of insight for us that's going to be able to help you get your company from lab to market.
• 2:37
  Chris Reichhelm: Let's get into it.
• 2:42
  Chris Reichhelm: Tim Cesarek thank you for joining me.
• 2:45
  Tim Cesarek: It's great to be here, Chris.
• 2:47
  Tim Cesarek: Like I said, it's always fun to catch up with you and, uh, and, and learn from your questions.
• 2:54
  Chris Reichhelm: Well, um, well on that, let's get into it.
• 2:58
  Tim Cesarek: Sure.
• 2:58
  Chris Reichhelm: All right.
• 2:58
  Chris Reichhelm: Tim, you've operated, at in corporates, you've operated as an investor, as an M&A guy, you've operated in startups, in commercial roles, and from a domain perspective, you've done waste to energy, biofuels, sustainable aviation fuels, chemicals, energy.
• 3:20
  Chris Reichhelm: I mean, you've covered an awful lot of ground.
• 3:23
  Chris Reichhelm: So, I think this is going to be a really interesting discussion.
• 3:28
  Chris Reichhelm: on what it takes to get, let's call it a chemical engineering company in the broadest terms from kind of lab to market.
• 3:39
  Chris Reichhelm: And my first question for you is, in your experience on all these different sides of the fence and all these different domains, what are the most common obstacles that trip up leadership teams of these young companies, in your view?
• 3:57
  Tim Cesarek: Sure.
• 3:58
  Tim Cesarek: Well, I appreciate it.
• 3:59
  Tim Cesarek: That's a great question and a very humbling synopsis of my background there.
• 4:04
  Tim Cesarek: Um, you know, when I think about the experiences that at least I've had, right, and mentors of mine have had, and people that I've worked with, it's very interesting.
• 4:16
  Tim Cesarek: What's unanimous is growth is never linear.
• 4:19
  Tim Cesarek: And so when you think about that and you're in a situation where, whether you're a CEO or a head of innovation or chief commercial officer or head of engineering, whatever that might be, it's always important to recognize what the end is in mind, right?
• 4:36
  Tim Cesarek: Never lose sight of that end, but recognize that you're going to be following a serpentine pattern to get to that end.
• 4:44
  Tim Cesarek: Um, and, and the importance, I believe, in the roles that we have in navigating This growth or the taking of tech and bringing it to market is to be very mindful of the balance between the risks associated with the technology and the risks associated with the market.
• 5:09
  Tim Cesarek: Um, and, and there's always this temptation, To let perfect to be the enemy of good, um, and, and sometimes, many times, it's important to define your minimum technical solution that generates the appropriate return on a risk adjusted basis.
• 5:36
  Tim Cesarek: I know that's a, a word salad.
• 5:40
  Tim Cesarek: When you step back about that, it's important to define your minimum technical solution.
• 5:46
  Chris Reichhelm: Yeah,
• 5:47
  Tim Cesarek: that on a risk adjusted basis generates profitability because if you, because if you think about you always tell people there's an obstacle associated with time, right?
• 5:59
  Tim Cesarek: Time is is an adversary, right?
• 6:03
  Tim Cesarek: And so when you think about taking technology and bring it to market You have to be mindful to not just continually fund into this continuum of a moving goalpost, right?
• 6:17
  Tim Cesarek: And so you have to find the balance between the day to day and the purpose of what you're trying to do.
• 6:25
  Tim Cesarek: And, you know, to maybe borrow from Simon Sinek, you've got to have your golden circle well defined in terms of your why and your how and your what, right?
• 6:38
  Tim Cesarek: And so, and not only just from a visionary perspective, but you know this from talent acquisition.
• 6:46
  Tim Cesarek: That you've got to have the right people in the right seats with the right virtues, with the right virtues, the right value system, accomplishing that connection from the why to the how to the what.
• 7:01
  Tim Cesarek: So you know, I think obstacles, if I were to zero in specifically on things, I'll mention time.
• 7:09
  Tim Cesarek: Time is not your friend, right?
• 7:12
  Tim Cesarek: And so in the back of your mind, you should know what your burn rate is on a daily basis, right?
• 7:19
  Tim Cesarek: You should socialize that across the team so they understand every day that you're further away or closer to, in a good sense, to that end in mind, is less money funding into a situation where you're not generating profitability, right?
• 7:34
  Tim Cesarek: I once heard somebody said, technology without revenue is just technology.
• 7:40
  Tim Cesarek: Technology with revenue is innovation, right?
• 7:43
  Tim Cesarek: And so it's a very powerful statement to me in the sense is it resonated heavily in the fact that.
• 7:50
  Tim Cesarek: You can put a bunch of patents on the wall, but if the market doesn't value it, and if you're not doing a good job of establishing and understanding what that perceived value is in the marketplace, then all you have is a patent, right?
• 8:02
  Chris Reichhelm: Yeah.
• 8:05
  Chris Reichhelm: So is it, so when you look at these companies in your experience, are they failing to appreciate that?
• 8:12
  Chris Reichhelm: By and large, they have failed to appreciate the aspect of time and are they letting perfect be the enemy of good?
• 8:23
  Tim Cesarek: I, I think, I think it's, we all have that temptation, right?
• 8:29
  Tim Cesarek: If, if you are driven to perfection, which many leaders are, it's hard to manage that dichotomy, right?
• 8:39
  Tim Cesarek: Which is that dichotomy of having something that you know will work and be perfect versus the dichotomy dichotomy of it's good enough, right?
• 8:48
  Chris Reichhelm: Yeah.
• 8:49
  Tim Cesarek: And so managing that is, is, is critical, finding that right balance.
• 8:54
  Tim Cesarek: So I would say categorically, I have not seen a situation where that is not of concern, right?
• 9:02
  Tim Cesarek: Where every business struggles with this.
• 9:05
  Tim Cesarek: It's just how you're able to manage those shadows, right?
• 9:08
  Tim Cesarek: How can you tamp them down and, and, and recognize that you have to trust in the team that you've built and trust that you're going to come to market with a minimum technical solution that will work.
• 9:22
  Tim Cesarek: And learn along the way.
• 9:24
  Chris Reichhelm: Yeah.
• 9:24
  Tim Cesarek: Learn along the way.
• 9:25
  Chris Reichhelm: No, I mean, there's a lot of truth in what you say, but what is a minimum viable product in a chemical or chemical engineering based business.
• 9:36
  Chris Reichhelm: How much can you accomplish with an MVP?
• 9:39
  Chris Reichhelm: And what should, you know, are there any kind of general rules around what an MVP needs to look like before you start taking it out and building partnerships on the back of it and?
• 9:51
  Chris Reichhelm: And, you know, dare I say, commercializing it.
• 9:55
  Tim Cesarek: So, it's an excellent question and I can tell you that there's not an answer that fits all, right?
• 10:01
  Chris Reichhelm: I'm sure.
• 10:02
  Tim Cesarek: Unfortunately.
• 10:03
  Tim Cesarek: But what I will tell you is, is that, um, you remember the book Crossing the Chasm?
• 10:08
  Chris Reichhelm: Sure.
• 10:09
  Chris Reichhelm: Geoffrey Moore.
• 10:09
  Tim Cesarek: Um, exactly.
• 10:11
  Tim Cesarek: And in that book, there's the discussion in some respects around that initial product offering into the marketplace.
• 10:20
  Tim Cesarek: I'm a big believer in providing a product that does what it says it's going to do.
• 10:26
  Tim Cesarek: It may not be the optimum product.
• 10:28
  Tim Cesarek: You already know what that end is in mind, but the reality is, is you've got to get something to market so you get feedback, so you can get those innovators, those tech geeks to kick it around and say, Hey, this doesn't work, or this works, or I don't like this and you'd like, like, I don't like this.
• 10:45
  Tim Cesarek: This is how, to me, you have to do the market discovery, and that's what I mean by the Minimum Technical Solution.
• 10:51
  Chris Reichhelm: I get it.
• 10:52
  Tim Cesarek: It provides utility based upon that promise that you're making to the marketplace.
• 10:59
  Tim Cesarek: So, for example, it.
• 11:00
  Tim Cesarek: For Synata Bio, for example, if I can use us as an example, um, we are building a plant in China.
• 11:07
  Tim Cesarek: It is our first commercial plant in China.
• 11:10
  Tim Cesarek: It will take waste gases and it will make ethanol that will be made into ethyl acetate in a paint and coating.
• 11:18
  Tim Cesarek: We already know that there are things that we could do to that process that ultimately will make it even better.
• 11:24
  Tim Cesarek: But the reality is, is that we want to take this plant, the first of its kind, and run it through its boundary conditions as this solution, and learn from those boundary conditions so then we can optimize again.
• 11:41
  Tim Cesarek: And again, and again, recognizing that plant two will be different from plant one.
• 11:48
  Tim Cesarek: Plant three will be different from plant two.
• 11:51
  Tim Cesarek: You know where I'm going with this, right?
• 11:53
  Chris Reichhelm: Absolutely.
• 11:53
  Tim Cesarek: So, so in our case, right, we know we're going to learn a lot.
• 11:58
  Tim Cesarek: We would be totally, um, we'd be very arrogant if we thought that we're not going to learn something.
• 12:06
  Chris Reichhelm: Yeah, of course.
• 12:07
  Tim Cesarek: And so, so this is what I mean, right?
• 12:09
  Tim Cesarek: Which is.
• 12:10
  Tim Cesarek: And in these learnings, coming back to some of those lessons, if I may, may be specific to the utilization of, let's say, large chemical processes.
• 12:24
  Tim Cesarek: My advice would be, chances are that if you surrounded yourself with the right team and you've thought through this and you've got your good risk registers in place.
• 12:34
  Tim Cesarek: You probably got your, your process pretty well lined out, but you remember, you're probably integrating into other processes.
• 12:42
  Tim Cesarek: So in, in engineering, we call that outside the battery limit and inside the battery limit, if you follow what I'm saying.
• 12:49
  Tim Cesarek: And so you have a box and in that box, it takes, in our cases, waste gases and it makes a product, right?
• 12:56
  Tim Cesarek: But outside of that box, who's going to manage the waste water?
• 13:00
  Tim Cesarek: Who's going to manage the utility?
• 13:02
  Tim Cesarek: Who's going to manage the feed system, right?
• 13:04
  Tim Cesarek: And so what we've learned and what I've learned is that many times those risks or those learnings, which is a nice way of saying the screw ups, um, ultimately are things that happen outside your own battery limit.
• 13:21
  Chris Reichhelm: Yeah.
• 13:22
  Tim Cesarek: I can point to many experiences, whether in an operating role or whether in an investor role where, we've observed this where, oh my gosh I didn't.
• 13:33
  Tim Cesarek: I thought we were going to be able to manage the wastewater to the standard and now it's not meeting that standard.
• 13:40
  Tim Cesarek: Now I need an environmental adjustment to be able to do that.
• 13:43
  Tim Cesarek: Well,
• 13:44
  Chris Reichhelm: yeah.
• 13:45
  Tim Cesarek: Those are the things that I would say.
• 13:49
  Tim Cesarek: I once had another mentor who said it's that last 5 percent that can make the difference, right?
• 13:56
  Tim Cesarek: And so, just be mindful of that last 5%, many times it's not right in your sweet spot.
• 14:04
  Tim Cesarek: It's outside of your sweet spot.
• 14:07
  Chris Reichhelm: There's a whole load of stuff to unpack there.
• 14:10
  Chris Reichhelm: That was wonderful, what you've just shared.
• 14:12
  Chris Reichhelm: Let me ask a question in there.
• 14:15
  Chris Reichhelm: To get to a first of a kind, your first plant in China, you need to have demonstrated some kind of commercial validation up until that point.
• 14:23
  Chris Reichhelm: Of course.
• 14:24
  Chris Reichhelm: Into the financing, to the complexity and building true first of a kind, regardless of the scale, it's, it's still a big deal.
• 14:31
  Chris Reichhelm: What was the, what was the validation for you guys?
• 14:36
  Chris Reichhelm: You know, and what did it take?
• 14:38
  Chris Reichhelm: You know, did you have, you know, what did it take for you guys to get that quality of validation for everyone around the table and other investors to say, okay, we'll finance a first of a kind.
• 14:47
  Chris Reichhelm: We're ready to go.
• 14:49
  Tim Cesarek: Sure.
• 14:49
  Tim Cesarek: It's another excellent question.
• 14:51
  Tim Cesarek: Um, I think again, this comes to the balance, right?
• 14:55
  Tim Cesarek: Which is technology for technology sake, as I stated before, is just going to be a patent on a wall.
• 15:02
  Tim Cesarek: So I think for us, at Synata Bio, it's a combination of really listening and understanding through commercial discovery.
• 15:11
  Tim Cesarek: What is it the customer has in terms of a pants on fire need?
• 15:16
  Tim Cesarek: It's like, oh my God, my pants on fire.
• 15:17
  Tim Cesarek: I got to do something.
• 15:20
  Tim Cesarek: And so to me, that is a very visceral image of somebody needing to do something right away.
• 15:27
  Tim Cesarek: And what that is, what is the solution for that pants on fire need?
• 15:32
  Tim Cesarek: And so, it's, it's a combination of identifying that, working from right to left, right?
• 15:38
  Tim Cesarek: From the end in mind, utilizing that customer feedback, to obviously having This massive hammer called technology looking for a name, right?
• 15:51
  Tim Cesarek: And so it's a combination of then matching those two together.
• 15:57
  Tim Cesarek: And, and so, and it's, it has to be done, it's never done in sync because here, that would be too ideal, right?
• 16:06
  Tim Cesarek: Where can that happen?
• 16:07
  Tim Cesarek: Please point me to that.
• 16:09
  Chris Reichhelm: And what is, and what is in sync anyway?
• 16:12
  Chris Reichhelm: at that level where you're, you know, it's, it's just too difficult.
• 16:17
  Chris Reichhelm: How was it for you guys?
• 16:18
  Chris Reichhelm: You know, did you have a plan that you took to market?
• 16:21
  Chris Reichhelm: So it was a bit of push or was it more pull people saying, Hey, this is what we need.
• 16:25
  Chris Reichhelm: If you had this, we would be all over it.
• 16:28
  Tim Cesarek: Excellent question.
• 16:29
  Tim Cesarek: So at Synata Bio there was a predecessor company called Cascada, right?
• 16:34
  Tim Cesarek: In, in 2005, the company was founded with a premise to biologically convert gases into ethanol, right?
• 16:44
  Tim Cesarek: A premise that at that point in time, I would argue, was ahead of the market.
• 16:50
  Tim Cesarek: And so, remember, it's 2005.
• 16:53
  Tim Cesarek: I mean, this was way before the energy transition was cool, right?
• 16:58
  Tim Cesarek: And, and I'm saying that with a little bit of cynicism, but you, you know where I'm going with that, right?
• 17:02
  Chris Reichhelm: This is clean tech version one.
• 17:04
  Tim Cesarek: Exactly.
• 17:05
  Chris Reichhelm: Back in the day.
• 17:05
  Chris Reichhelm: Yeah.
• 17:05
  Chris Reichhelm: I remember.
• 17:06
  Tim Cesarek: And, and so with that end state in mind, um, there was a lot of work in the technology in a laboratory, right?
• 17:14
  Tim Cesarek: Which is not only the biology being perfected, but also the chemical engineering being impacted, uh, impacted.
• 17:21
  Tim Cesarek: at beaker scale to pilot scale, right?
• 17:26
  Tim Cesarek: Again, learning in sync with understanding the market in terms of what's there.
• 17:32
  Tim Cesarek: Now, remember that that time, the funnel of the market is huge, right?
• 17:37
  Tim Cesarek: And we'll come back to this hopefully in our discussion around Some of those learnings associated with dealing with platform technologies, right?
• 17:46
  Tim Cesarek: So again, this is a platform technology, a very large solution space, taking waste gases and making ethanol.
• 17:53
  Tim Cesarek: That's big.
• 17:55
  Tim Cesarek: And so taking that information and then finding the right solution space with enough technical proof to then finance the demonstration scale, right?
• 18:09
  Tim Cesarek: We went from lab and pilot to a 300x scale up at a demonstration scale.
• 18:18
  Tim Cesarek: Um, this would have been in the 2012, 13, 14 timeframe.
• 18:25
  Tim Cesarek: And then of course, it's the right balance of listening to what your customers are looking for, for that proof, right?
• 18:32
  Tim Cesarek: Which is Great technology, like it, but I need to see it run continuously for a period of time, right?
• 18:40
  Tim Cesarek: And that's what the demo did.
• 18:42
  Tim Cesarek: The demo gave us Very long runtimes.
• 18:45
  Tim Cesarek: And what I tell people is, is those demonstration plants are in place to really test the operating envelope.
• 18:52
  Tim Cesarek: You follow what I mean by that?
• 18:53
  Chris Reichhelm: I do.
• 18:54
  Tim Cesarek: You drive a car and you've got guardrails on both sides, hopefully, and, and of course you're going to bounce off one, bounce off the other.
• 19:01
  Tim Cesarek: Sometimes that guardrail expands a little bit.
• 19:05
  Tim Cesarek: But these are the important learnings that you need to have.
• 19:07
  Tim Cesarek: You need to find the failure points in that process, and you need to find the operating optimization in that process.
• 19:15
  Tim Cesarek: And that's really, I think, what a demo does well.
• 19:19
  Tim Cesarek: And then, obviously, the next step, right, is to bridge from that demonstration scale to now your commercial scale.
• 19:29
  Tim Cesarek: And, and this is difficult in the sense of what is commercial in, in the world we live in from an energy transition perspective?
• 19:37
  Tim Cesarek: What is the right scale?
• 19:40
  Tim Cesarek: Um, look, I sometimes jokingly say that big oil, independent oil companies don't get out of bed for less than a hundred thousand barrels a day, right?
• 19:50
  Tim Cesarek: That's a lot of volume, right?
• 19:52
  Tim Cesarek: But remind, but, and I can't blame them.
• 19:54
  Tim Cesarek: I came from there, right?
• 19:55
  Tim Cesarek: In the sense that the opportunity costs to manage something smaller.
• 20:00
  Tim Cesarek: It doesn't make sense in their solution set.
• 20:02
  Tim Cesarek: So they're looking for scale, but yet, in a world where you're taking, say, biomass and you want to convert biomass to, say, a fuel, the resources available for you are not at that same scale.
• 20:16
  Chris Reichhelm: Yeah.
• 20:17
  Tim Cesarek: Right?
• 20:17
  Tim Cesarek: If I, and this isn't to pick on a technology, but I'm just going to ultimately kind of give you some perspective.
• 20:22
  Chris Reichhelm: Yeah.
• 20:23
  Tim Cesarek: Let's think about, let's think about LG as a feedstock to make fuels, right?
• 20:28
  Tim Cesarek: I remember having a conversation back in the day, um, and being very interested in LG as a resource to extract the oil and make, um, diesel fuel, right?
• 20:42
  Tim Cesarek: This would have been back in 2006.
• 20:46
  Tim Cesarek: And then I remember kind of doing the mass balances.
• 20:49
  Tim Cesarek: Um, I was working for, for Koch Industries at the time.
• 20:53
  Tim Cesarek: Koch has a huge refinery in Minnesota, And I remember doing the mass balances and saying, hey, practically speaking, if I wanted to displace 100 percent of that refinery's diesel volume, how much algae would I need?
• 21:09
  Tim Cesarek: And over what landmass would I have to do that?
• 21:11
  Tim Cesarek: Well, as it worked out, it's close to the state of Arizona, right?
• 21:16
  Tim Cesarek: And I'm, I'm, I'm exaggerating a little bit.
• 21:18
  Chris Reichhelm: Sure.
• 21:18
  Tim Cesarek: But my point of that is, is that as we drive technology, what we might have is a very cool thing, but what is the practical solution to bring it to market?
• 21:29
  Tim Cesarek: And this is where, you know, Scalability in your technology is so important.
• 21:33
  Tim Cesarek: It's important to understand where are the sweet spots relative to the scale you can grow into.
• 21:41
  Tim Cesarek: Right?
• 21:41
  Tim Cesarek: Because, because technically speaking, moving from a demo to another 300 to 500x scale up is, is, is.
• 21:51
  Tim Cesarek: is suicidal, right?
• 21:54
  Tim Cesarek: So you, you, you've got to ultimately think about what is that interim step and where is the market application associated?
• 22:00
  Chris Reichhelm: Yeah.
• 22:02
  Chris Reichhelm: Where do you start to explore the scalability question?
• 22:06
  Tim Cesarek: Yeah, that's a great, yep, it's a great question.
• 22:09
  Tim Cesarek: And to me, it, that scalability question should be asked early on in the process, right?
• 22:15
  Tim Cesarek: It's, as I said, commercial discovery is something that needs to be It's close to in sync as possible with technical discovery.
• 22:27
  Tim Cesarek: Um, you know, one of the adages that I'd learned from another mentor was, You know, people like to say fail fast.
• 22:34
  Tim Cesarek: I don't like to say that.
• 22:35
  Tim Cesarek: I mean, it just kind of rubs me wrong, right?
• 22:37
  Tim Cesarek: So, but the way I think about it is, is that I want to go discover as quickly as possible because that discovery, if it's being managed appropriately, should be connected through a closed loop to the organization.
• 22:52
  Tim Cesarek: Where that knowledge makes its way back into the design basis, into how you run the process, whatever that might be.
• 23:01
  Tim Cesarek: So the quicker you discover, the quicker you can be discussed successfully, right?
• 23:05
  Tim Cesarek: And so, you know, Charles Cook used to call this or does call this experimental discovery, right?
• 23:11
  Tim Cesarek: Um, and so you have to go through the process of experimental discovery.
• 23:17
  Tim Cesarek: And it's not limited to technological experimentation.
• 23:21
  Tim Cesarek: It's also market experimentation.
• 23:23
  Chris Reichhelm: That's right.
• 23:23
  Tim Cesarek: So, those two things have to be involved.
• 23:28
  Tim Cesarek: to get to a solution as quick as possible.
• 23:30
  Tim Cesarek: And that is in where lie lies where the scalability questions should be answered along the way.
• 23:37
  Tim Cesarek: Right.
• 23:38
  Tim Cesarek: And, and you know what, and I hate to break it to you again, that's not a perfect formula.
• 23:43
  Tim Cesarek: You're going to be wrong.
• 23:44
  Tim Cesarek: And so in the end, you have to ultimately adapt and adjust, be agile and, and, but be thinking in terms of common denominators, right?
• 23:54
  Tim Cesarek: We all go to market for us.
• 23:56
  Tim Cesarek: We'll go to market with a 50 KTA plant, and we'll go to market with a 200 KTA plant, because for us, we believe our process has the right to win, and we'll hopefully speak about this later, the right to win in those scales.
• 24:12
  Tim Cesarek: This is where we do exceptionally well, and if we can hit 200 KTA and we can hit 50 KTA, there's a beachhead of opportunity for us to be successful.
• 24:22
  Chris Reichhelm: Yeah.
• 24:23
  Chris Reichhelm: What kind of Well, let me ask it in a different way.
• 24:28
  Chris Reichhelm: How experienced do teams need to be when they're starting out?
• 24:37
  Chris Reichhelm: You know, a lot of the opportunities that we see, we see they're starting out, been doing research for a while, kind of, and we meet them when they're TRL, end of TRL 3, sometimes TRL 4.
• 24:51
  Chris Reichhelm: Occasionally five.
• 24:53
  Chris Reichhelm: Um, so it's, you know, they're kind of prototype.
• 24:56
  Chris Reichhelm: We've seen other things at research phase, which are a little earlier where, and often the teams are very inexperienced.
• 25:03
  Chris Reichhelm: So there are groups of students, maybe one or two have some professional experience, but they're generally on the more junior end of things.
• 25:12
  Chris Reichhelm: Are those teams, are those teams, you know, is that kind of experience ideal for these sorts of exercises?
• 25:23
  Tim Cesarek: That's a great question too.
• 25:25
  Tim Cesarek: I mean, as you know, I mean, you've been at this a long time in terms of acquiring talent, right?
• 25:30
  Tim Cesarek: I would tell you it's going to depend on the circumstance, but more often than not, um, experience is a good teacher.
• 25:40
  Tim Cesarek: Although experience can create bias, it can create cynicism.
• 25:47
  Tim Cesarek: And so, what, what I enjoy most about working with younger engineers or younger market driving individuals that are fresh, right, the, the perp, the sense of purpose is so true.
• 26:04
  Tim Cesarek: Right.
• 26:05
  Tim Cesarek: It's so unvarnished, right?
• 26:09
  Tim Cesarek: It's so unabashed, right?
• 26:12
  Tim Cesarek: It's, it's, it's, it's, and it's wonderful in the sense that it gives people like me energy.
• 26:19
  Tim Cesarek: It opens up our mind in terms of why did we do it that way?
• 26:25
  Tim Cesarek: And so to me, it's again, the balance, right?
• 26:28
  Tim Cesarek: Which is you want to have that, that purposeful driven vision, but yet you've got to add a dose of practicality to it.
• 26:38
  Tim Cesarek: And so, starting out, I think if you're a young team with a solution, find somebody that can help you, that's got experience as an advisor, as a mentor, whatever that structurally might be, depending upon whether you're sitting in a lab.
• 26:58
  Tim Cesarek: Right?
• 26:59
  Tim Cesarek: I would encourage you, respectfully, try to step out of an academic point of view as soon as possible, right?
• 27:09
  Tim Cesarek: Um, I would say that these are things that, unfortunately, people try to put into books, but they're not things that are always, let's say, um, managed from a book, right?
• 27:26
  Tim Cesarek: And so, um, there's a place in time to step out of an academic world or out of a lab and And that mindset that's there, which is a wonderful mindset, I'm not discounting that, but you need that dose of practicality.
• 27:41
  Tim Cesarek: And you can get that through advisors.
• 27:44
  Tim Cesarek: Over time, um, you bring in experience.
• 27:49
  Tim Cesarek: Notice I said not professional managers.
• 27:53
  Tim Cesarek: You bring in experience, um, that's maybe a topic for a different day in terms of the learnings associated with plucking somebody out of big company A and putting them into startup.
• 28:06
  Tim Cesarek: I mean, you could probably speak reams of that experience, right?
• 28:10
  Tim Cesarek: So, um, because it's just a different world, right?
• 28:14
  Tim Cesarek: So, find someone that's had that practical, Early stage lab to market type experience to just kind of help you, mentor you, navigate.
• 28:26
  Chris Reichhelm: Yep.
• 28:26
  Tim Cesarek: And then grow up as a business to where you then can support a management team.
• 28:32
  Tim Cesarek: And remember that if you're that young engineer, don't lose that passion and that purpose.
• 28:39
  Tim Cesarek: Be open minded to the fact that there's some experiences out there that ultimately may shape the success of bringing that technology to market.
• 28:49
  Tim Cesarek: Notice I said shape, right?
• 28:51
  Tim Cesarek: That's the important thing.
• 28:53
  Chris Reichhelm: It is.
• 28:54
  Chris Reichhelm: What are some of the characteristics or features of high performing teams that you've been a part of, Tim?
• 29:01
  Chris Reichhelm: How do they work?
• 29:02
  Chris Reichhelm: You know, you talk about this.
• 29:04
  Chris Reichhelm: You know, the kind of balance between commercial tech and scale up and engineering.
• 29:08
  Chris Reichhelm: And, you know, tech can be the technology discovery and the final solution itself.
• 29:12
  Chris Reichhelm: And then the scale up and engineering tends to diverge from that.
• 29:16
  Chris Reichhelm: And then the commercial piece.
• 29:17
  Chris Reichhelm: But those three things are the way I've traditionally thought about it.
• 29:20
  Chris Reichhelm: Those three things working in concert.
• 29:23
  Chris Reichhelm: Um, is that your experience?
• 29:25
  Chris Reichhelm: And what are some of the qualities or features of high performing teams that are building those solutions, trying to get it to market?
• 29:33
  Chris Reichhelm: How do they operate?
• 29:35
  Tim Cesarek: Yeah, so I think it's an excellent question.
• 29:41
  Tim Cesarek: And, and, and I would tell you, been at this for over 20 years and, and every time is different, right?
• 29:50
  Tim Cesarek: I mean, it's a different organism, every organization you walk into, right?
• 29:55
  Tim Cesarek: But one of the things that I would say that resonates for me across the board, Is that sense of purpose, the sense of the true sense of the humility necessary to recognize that if you have a solution, that that solution is bigger than any one individual and that it requires a team and not just a team, but an ecosystem.
• 30:24
  Tim Cesarek: And I'm sure you've heard this before, right?
• 30:27
  Tim Cesarek: Which is there are all kinds of stakeholders in this energy transition.
• 30:33
  Tim Cesarek: So think about that, right?
• 30:35
  Tim Cesarek: Individual has an idea, takes a team within a corporation to bring that to market.
• 30:40
  Tim Cesarek: But without all those stakeholders in that ecosystem, for us, you know, we use waste gases.
• 30:47
  Tim Cesarek: So who's, who are, who's providing the waste gases?
• 30:50
  Tim Cesarek: We make ethanol.
• 30:51
  Tim Cesarek: Who are the buyers of the ethanol and for what purpose, right?
• 30:55
  Tim Cesarek: And so who are all the engineering partners that we need to be thoughtful of, right?
• 31:00
  Tim Cesarek: And so this ecosystem is orders of magnitude greater than you as an individual, right?
• 31:08
  Tim Cesarek: and as your team.
• 31:09
  Tim Cesarek: So I would say that you got to have that purpose in mind, you got to understand who your ecosystem is, and then you have to hire the right talent for what you're trying to accomplish.
• 31:24
  Tim Cesarek: But that talent has to share similar virtues, right?
• 31:29
  Tim Cesarek: Similar set of guiding principles culturally you want to build in the organization, whether that's integrity or respect or collaboration or whatever those things are you want.
• 31:43
  Tim Cesarek: You've got to have people that share those same virtues because you can have the smartest person in the world not being willing to collaborate.
• 31:51
  Tim Cesarek: Well, they're not speaking the same language of the organization, right?
• 31:54
  Chris Reichhelm: Yeah.
• 31:54
  Tim Cesarek: So obviously they're not enabling the success of that organization.
• 31:59
  Tim Cesarek: So to me, it's for the success, you've got to have a sense of purpose.
• 32:04
  Tim Cesarek: You've got to have a clear sense of virtues.
• 32:06
  Tim Cesarek: You've got to recognize that your purpose is small in comparison to the whole, right?
• 32:13
  Tim Cesarek: And, and you need to hire the talent.
• 32:16
  Tim Cesarek: That has the right balance of experience and know how to be able to accomplish that.
• 32:22
  Tim Cesarek: Yeah.
• 32:23
  Tim Cesarek: I know that's very high level.
• 32:24
  Chris Reichhelm: Yeah.
• 32:25
  Tim Cesarek: And, and if you want to take a deeper dive there, I'm happy to.
• 32:27
  Tim Cesarek: But again, that's very specific, right?
• 32:29
  Tim Cesarek: In terms of.
• 32:30
  Chris Reichhelm: It is.
• 32:31
  Tim Cesarek: You know, and for us, I would say for us, it's the right balance between commercial effort.
• 32:38
  Tim Cesarek: And process optimization and delivery of our first commercial plant, right?
• 32:44
  Tim Cesarek: And so, and so you have to balance the right people in the right seats based upon those sets of priorities, right?
• 32:55
  Tim Cesarek: If you think about it.
• 32:58
  Chris Reichhelm: Yeah.
• 32:59
  Chris Reichhelm: Yeah.
• 32:59
  Chris Reichhelm: Yeah.
• 33:00
  Chris Reichhelm: It's true.
• 33:01
  Chris Reichhelm: And do you find you need to be constantly re evaluating what those priorities are along the journey?
• 33:07
  Tim Cesarek: Oh, yeah.
• 33:08
  Tim Cesarek: Of course, it's, it's, it is a, if you've set it up right, it's a, it's a feedback loop.
• 33:16
  Tim Cesarek: And, and that's where sometimes it's very difficult, right?
• 33:20
  Tim Cesarek: Which is, and I don't like this term either, which is pivot, right?
• 33:24
  Tim Cesarek: It just, it has this negative connotation, right?
• 33:27
  Tim Cesarek: To me, it's more around agility, right?
• 33:30
  Tim Cesarek: Which is, it's not a pivot.
• 33:32
  Tim Cesarek: It's a situation where you're being responsive to, you're a market demand or a market need.
• 33:38
  Chris Reichhelm: Yeah.
• 33:38
  Tim Cesarek: I mean, there's today, for example, right, let's take in the United States, for example, there's uncertainty in the marketplace, right?
• 33:48
  Tim Cesarek: That uncertainty is driven by the lack of IPO market.
• 33:54
  Tim Cesarek: It's driven by political change, uncertainty around that political change and the ramifications associated with This as existential, which I believe this as existential need to do something about climate change, right?
• 34:12
  Tim Cesarek: And so, but on top of that, um, recognizing that if you're going to have a solution, you have to bank on a solution that can make money based on economic profit and not political profit.
• 34:26
  Tim Cesarek: So if you think about, take our solution, for example, we can be competitive with ethanol.
• 34:32
  Tim Cesarek: That's produced on a standard, by standard means today, by comparative means today, whether it's synthetic ethanol or crop based ethanol.
• 34:40
  Tim Cesarek: We can, we have a solution that's competitive with that.
• 34:43
  Tim Cesarek: So we know we can make economic profit without carbon value, without.
• 34:49
  Chris Reichhelm: Yeah.
• 34:49
  Tim Cesarek: Tax incentives without grants with all these things that in worlds where you have mandates, you need that carbon value to have a solution that ultimately can be competitive.
• 35:02
  Tim Cesarek: And so this also goes into the weaving of where you're going to build your beachhead from a commercial perspective.
• 35:09
  Tim Cesarek: Right?
• 35:10
  Tim Cesarek: Which is, do you have a solution that can make money without government influence?
• 35:17
  Tim Cesarek: Right?
• 35:17
  Tim Cesarek: And that's so important in a world where climate change is the existential purpose for what we do from an energy transition or a decarbonization perspective.
• 35:30
  Chris Reichhelm: I think that, I think that was one of the biggest lessons to come out of that first wave of clean tech innovation back in the early 2000s.
• 35:37
  Chris Reichhelm: So much of it relied on government subsidies.
• 35:41
  Chris Reichhelm: And, uh, or grants or rebates or whatever it was.
• 35:44
  Chris Reichhelm: And, uh, at the end of the day, it needs to be able to stand on its own merits.
• 35:49
  Tim Cesarek: Right.
• 35:49
  Tim Cesarek: Um, however, if I may, Chris, I'm sorry to speak over you there, but if I may, we all have short memories.
• 35:57
  Tim Cesarek: Right.
• 35:57
  Chris Reichhelm: We do.
• 35:58
  Chris Reichhelm: It's so true.
• 35:59
  Tim Cesarek: I mean, so you see, you see situations where, wait a minute, I need, I need to generate an economic cost of this.
• 36:09
  Tim Cesarek: And that's five times what I can make the comparative alternative for.
• 36:15
  Tim Cesarek: How am I going to do that?
• 36:17
  Tim Cesarek: Who's going to pay for that?
• 36:19
  Tim Cesarek: Right.
• 36:19
  Tim Cesarek: And so, and then so old salts like us say, Hey, Hey, Hey, I seen this movie, right?
• 36:25
  Tim Cesarek: And so
• 36:29
  Chris Reichhelm: it's true.
• 36:30
  Tim Cesarek: This is where, again, when you come back to that earlier question.
• 36:33
  Tim Cesarek: When you have a young team, having that practical experience is, is important so that you don't repeat history.
• 36:42
  Chris Reichhelm: Yeah.
• 36:43
  Chris Reichhelm: Talk a little bit about the trust building process with corporates, with your ultimate customers and industrial partners.
• 36:53
  Chris Reichhelm: What's the, what's the What, what needs to take place from your perspective?
• 37:01
  Chris Reichhelm: What needs to take place for trust to be well and truly established and for you to be considered a proper member of a value chain?
• 37:12
  Tim Cesarek: So I, in reflecting on that question, I'll start with the end in mind.
• 37:18
  Chris Reichhelm: Yeah.
• 37:18
  Tim Cesarek: So to me, the ideal partner is somebody that you believe you're shoulder to shoulder with.
• 37:23
  Chris Reichhelm: Yeah.
• 37:26
  Tim Cesarek: Um, and I would say that in all the years that I've experienced this, from your first meeting, you can identify whether you're across the table or whether you're shoulder to shoulder.
• 37:40
  Tim Cesarek: And many of that just goes to the psyche of who your customer base is, right?
• 37:44
  Tim Cesarek: Sometimes, I would say many times, early adopters are willing to be shoulder to shoulder with you.
• 37:53
  Tim Cesarek: Because they share a similar purpose, right?
• 37:54
  Tim Cesarek: Which is they want something new, something discontinuous in the marketplace to make its way into the markets, right?
• 38:03
  Chris Reichhelm: And maybe they have a problem, to your point earlier, maybe they have a problem that is an absolute burning platform for them that they have to solve.
• 38:12
  Chris Reichhelm: They need to do it.
• 38:13
  Tim Cesarek: That's right.
• 38:14
  Tim Cesarek: So, you know, for us, at Synata Bio.
• 38:17
  Tim Cesarek: We've gone through a very disciplined commercial point of view process, right?
• 38:22
  Tim Cesarek: Which is what gives us the right to win.
• 38:24
  Tim Cesarek: Based upon what the market's telling us and where we feel we can create margin above the commodity margin without political profit.
• 38:33
  Tim Cesarek: It's that simple.
• 38:35
  Tim Cesarek: That becomes a sweet spot of opportunity for us, okay?
• 38:40
  Tim Cesarek: Um, however, that sweet spot of opportunity is significant, right?
• 38:44
  Tim Cesarek: And so, you see this sometimes with platform technologies where you have all these opportunities.
• 38:48
  Tim Cesarek: Well, um, you know, you could die through indigestion, right?
• 38:52
  Tim Cesarek: You can chase so many things.
• 38:54
  Tim Cesarek: and not have one significant win.
• 38:57
  Tim Cesarek: So it takes the discipline and the, and, and the, and the discomfort associated with wanting to commercially have so many options, because you don't know which one's going to in the end win, to being disciplined to narrow that down to who are the folks that really have the pants on fire need, where I can generate profit or margin above the commodity margin for that.
• 39:24
  Tim Cesarek: And then finally.
• 39:26
  Tim Cesarek: You may have several that do that, but you may only have one or two that's willing to be shoulder to shoulder with you, and so that shoulder to shoulder means it's somebody that You're in agreement that when, when stuff happens, they're in the soup with you and they work with you to help figure it out because it will happen, right?
• 39:46
  Tim Cesarek: And where you've reached agreement early on in terms of aligned incentives, right?
• 39:53
  Tim Cesarek: The behaviors of the process
• 39:55
  Chris Reichhelm: Do you do that up front?
• 39:56
  Chris Reichhelm: Do you do that up front or do you do that as time goes on?
• 39:58
  Tim Cesarek: I start to try to do it right up front, right?
• 40:01
  Tim Cesarek: Which is Okay, let's make sure we're heading to the right target here.
• 40:05
  Tim Cesarek: What's your end in mind?
• 40:06
  Tim Cesarek: What's my end?
• 40:08
  Tim Cesarek: What's the reason you need this?
• 40:09
  Tim Cesarek: Okay, cool.
• 40:10
  Tim Cesarek: Now that we've established that, how do we get to that?
• 40:14
  Tim Cesarek: And then can we start, you know, my question is early on with folks, can we start to at least put down some bullet points of an outline of how we're going to work together?
• 40:26
  Tim Cesarek: How we're going to partner?
• 40:27
  Tim Cesarek: How we're going to collaborate?
• 40:29
  Tim Cesarek: And then that starts with some fundamentals, a framework of how are you going to work together.
• 40:34
  Tim Cesarek: And then from that framework, it teases out specific terms, right?
• 40:40
  Tim Cesarek: Monetary terms, on ramps, off ramps, milestones, all the things that are going to be important as you're taking a technology and bringing it to market, right?
• 40:50
  Chris Reichhelm: Yeah.
• 40:51
  Tim Cesarek: And, and, and then as that's going on, of course, due diligence is happening at the same time.
• 40:56
  Tim Cesarek: They're looking at your technology, you're looking at their technology.
• 41:00
  Tim Cesarek: And then the behaviors along that path help you just kind of take a pulse of, is this a partner that's looking to grab some chips off the table?
• 41:10
  Tim Cesarek: Or is this a partner that truly feels that everything that goes into the funnel we're going to share, right?
• 41:17
  Tim Cesarek: And that we're shoulder to shoulder on, right?
• 41:20
  Tim Cesarek: And so those are the extremes.
• 41:23
  Tim Cesarek: And sometimes when you're developing a technology, you have to be mindful of the fact that, yeah, you'd like to be in a situation where everything that goes into the funnel you share, but yet you've got to be intellectually honest as it relates to the risk of a TRL3 and the risk that they're betting on with their capital.
• 41:44
  Tim Cesarek: There may be some disproportionate reward that needs to go to your partner to continue to be shoulder to shoulder.
• 41:53
  Tim Cesarek: So, you've got to be intellectually honest with the structure associated with that.
• 41:57
  Tim Cesarek: You've got to compensate those folks that have the balance sheet, right?
• 42:02
  Tim Cesarek: To ultimately, um, who will be taking on the risk, right?
• 42:08
  Tim Cesarek: And the old adage, right?
• 42:09
  Tim Cesarek: He who has the pesos has the sayso's, right?
• 42:12
  Tim Cesarek: So, in the end, you've got to be mindful.
• 42:15
  Tim Cesarek: of, of, of who you're working with from a strategic perspective.
• 42:20
  Chris Reichhelm: That's the most Texas thing I think I've ever heard.
• 42:23
  Chris Reichhelm: He who has the pesos, has the saysos, brilliant.
• 42:30
  Chris Reichhelm: That's excellent.
• 42:32
  Chris Reichhelm: But you're right.
• 42:32
  Tim Cesarek: Well, it's true.
• 42:34
  Chris Reichhelm: And, and I guess the challenge there is finding that balance.
• 42:37
  Chris Reichhelm: Because, you know, especially when you've got IP that's valuable, you're protective of it, but you don't have a completed solution.
• 42:44
  Chris Reichhelm: And you are thinking, and there's still a lot of execution risk for you.
• 42:49
  Chris Reichhelm: There's still a lot of scale up risk for you and them.
• 42:52
  Chris Reichhelm: And so it's, from what you're saying, I guess it's coming down to, at the end of the day, uh, a feel, but a feel that's been tested a little bit through engagement up until a particular point.
• 43:08
  Chris Reichhelm: But then you've got to make a call.
• 43:10
  Chris Reichhelm: And so it's using, no, no, no, no.
• 43:15
  Chris Reichhelm: It's using that intuition that you've got.
• 43:17
  Tim Cesarek: It is.
• 43:18
  Tim Cesarek: And, and again, that comes from just discovery.
• 43:22
  Tim Cesarek: You're going to make some mistakes along that path.
• 43:26
  Tim Cesarek: Right.
• 43:26
  Tim Cesarek: And you're going to say, I'm not going to do that again, or that worked really well.
• 43:29
  Tim Cesarek: I'm going to put that in the page of the playbook going forward.
• 43:32
  Tim Cesarek: Right.
• 43:32
  Tim Cesarek: And so, um, and, and, but again, just being mindful, right, which is, Right.
• 43:38
  Tim Cesarek: Well, what is the goal from a commercial perspective, right?
• 43:41
  Tim Cesarek: The goal is to generate profitability.
• 43:43
  Tim Cesarek: So again, with your purpose in mind.
• 43:45
  Tim Cesarek: So how do you get there?
• 43:46
  Tim Cesarek: Well, eventually you've got to build a beachhead, right?
• 43:48
  Tim Cesarek: You've got to know where you're going to put your, your process, well, where your partners are going to be and who you're going to partner with.
• 43:55
  Tim Cesarek: You've ultimately got to zero in on a short list of opportunity.
• 44:01
  Tim Cesarek: And that's where it's so counterintuitive, right?
• 44:05
  Tim Cesarek: Your muscle memory says, I want to be able to get as many options as possible, right?
• 44:11
  Tim Cesarek: The fear factor is, I don't want to limit the number of opportunities ahead of me.
• 44:18
  Tim Cesarek: In many respects to get out of the lab to build that beachhead, you don't have the resources to address every option because you will die through indigestion.
• 44:32
  Tim Cesarek: And so you have to zero in on, and this is where it takes courage, grit, um, an intellectually honest balance of risk reward with your customer base and a set of partners that you know your shoulder to shoulder with.
• 44:49
  Tim Cesarek: And that's where you build your beachheads, because Again, once you get into that mainstream market, now all of a sudden it's again a different game, right?
• 44:58
  Tim Cesarek: Which is the price of your product changes, your product offering tends to be more minimum, it's not as built to suit because those beachheads typically have options to be able to serve that pants on fire need, which may not meet the broader market, right?
• 45:13
  Tim Cesarek: These are the things that, again, you need to be mindful of.
• 45:16
  Tim Cesarek: And, and for us, at Synata Bio, I mean, we see really, three channels, it's waste, chemicals.
• 45:24
  Tim Cesarek: It's waste gases to chemicals.
• 45:27
  Tim Cesarek: It's biogenic CO2 to chemicals.
• 45:32
  Tim Cesarek: And it's also biogenic CO2 and waste chemicals to sustainable aviation fuel.
• 45:39
  Tim Cesarek: That's where we see our, our ability for our technology to unlock the value of those options, right?
• 45:48
  Chris Reichhelm: Yeah.
• 45:49
  Tim Cesarek: And that's, we're enabling that solution.
• 45:51
  Tim Cesarek: Are we going to make sustainable aviation fuel?
• 45:54
  Tim Cesarek: No, we're providing the technology to unlock, right?
• 45:58
  Chris Reichhelm: Sure.
• 45:58
  Chris Reichhelm: Yeah.
• 45:59
  Chris Reichhelm: Yeah.
• 46:00
  Chris Reichhelm: When do you, at what point is, at what point is it sensible to move beyond those initial beachheads though and start bringing on, you know, start exploring some of those other opportunities?
• 46:15
  Tim Cesarek: Well, that's a great problem to be faced with, right?
• 46:17
  Chris Reichhelm: Yeah, it is.
• 46:18
  Chris Reichhelm: It is.
• 46:19
  Chris Reichhelm: It is.
• 46:20
  Tim Cesarek: You know, and so in that regard, you know, from, from my perspective, um, it's probably more of a step function situation, right?
• 46:31
  Tim Cesarek: Which is you've got your beachheads and then if you're delivering on what you say you're going to do, then hopefully, if you've done the right commercial discovery, You've got your list of folks that have said, look, I'm not the one that's going to invest in your first plant.
• 46:50
  Tim Cesarek: I'm not the one that's going to invest in your second plant.
• 46:53
  Tim Cesarek: I'm not going to be the one that invests in your technology in the first plan or the second plan.
• 46:58
  Tim Cesarek: Well, guess what?
• 46:59
  Tim Cesarek: You still commercially stay in contact with folks because you can continually learn from them.
• 47:05
  Tim Cesarek: They're in a, they're in a, they're on a different, they're in a different place in the parking lot.
• 47:10
  Tim Cesarek: You'll lose track of them, but they're in a different place in the parking lot and, and continue to build on those relationships.
• 47:18
  Tim Cesarek: Is it taking up all of your commercial time?
• 47:21
  Tim Cesarek: No, but it's taking up a portion of your commercial time.
• 47:26
  Tim Cesarek: You can't forget about those folks that are ultimately looking at taking those earlier, not the early adopters, but the mainstream market that ultimately you're trying to address.
• 47:43
  Chris Reichhelm: For some of the, you know, for some of this early commercial activity while you're building your beachheads, what is the, do you have a sense on kind of the ideal composition or size of a team or that commercial team in particular?
• 47:59
  Tim Cesarek: Well, I'll say it's going to depend upon that team.
• 48:05
  Tim Cesarek: There are a number and it's going to depend upon the opportunity, right?
• 48:12
  Tim Cesarek: I would say that if you have a team where you have a leader that can do a lot of cycles, meaning they've got the experience to, and the courage to ultimately say, this isn't going to work and this is not going to work.
• 48:26
  Tim Cesarek: It takes, I think, a small team from the beginning to establish a commercial point of view.
• 48:31
  Tim Cesarek: You could maybe do that with.
• 48:33
  Tim Cesarek: Two, at most three folks really working through a commercial point of view.
• 48:39
  Tim Cesarek: Um, and then
• 48:41
  Chris Reichhelm: by that commercial point of view, what are you referring to?
• 48:43
  Chris Reichhelm: Is that the building up a solution, a proposition?
• 48:46
  Chris Reichhelm: What?
• 48:47
  Tim Cesarek: It's, it's, what is the use case?
• 48:49
  Tim Cesarek: What is the value proposition from an economic and a technical perspective?
• 48:53
  Tim Cesarek: Right.
• 48:53
  Tim Cesarek: Which is what did the techno economics say?
• 48:57
  Tim Cesarek: And then where is the appropriate application?
• 49:01
  Tim Cesarek: Right.
• 49:02
  Tim Cesarek: And then relative to that appropriate application, In the energy transition, remember, you should be driving to making economic profits.
• 49:11
  Tim Cesarek: So, by definition, what you're selling is a commodity.
• 49:15
  Tim Cesarek: So, by definition, you're as good as your last bid is low.
• 49:23
  Chris Reichhelm: That's, that's, wow.
• 49:25
  Chris Reichhelm: Yeah.
• 49:26
  Tim Cesarek: Yeah.
• 49:26
  Tim Cesarek: Right?
• 49:28
  Tim Cesarek: So, so, so, however, what we're offering in our solution at Synata Bio is the ability to lower your carbon footprint, right?
• 49:40
  Tim Cesarek: In some parts of the world, that's a second order benefit.
• 49:45
  Tim Cesarek: In some other parts of the world, that's the primary benefit.
• 49:50
  Tim Cesarek: So it's not only that we're providing a commodity for us, so we have to be competitive on a commodity basis.
• 50:00
  Tim Cesarek: The attribute of the product that we're selling is different.
• 50:04
  Tim Cesarek: And so, we have to go into the marketplace and discover what is it that people are willing to pay an incremental margin that we would create for that attribute.
• 50:20
  Tim Cesarek: That's what a commercial point of view should tell you.
• 50:23
  Tim Cesarek: And are you then in a position, from a marginal cost perspective, to to be the lowest cost in the supply stack, or are you very far and up into the right in the cost stack, right?
• 50:38
  Tim Cesarek: And so if you're up and high into the cost stack and price is down here, your supply is not going to be meaningful, right?
• 50:48
  Tim Cesarek: And so if the, if the demand price point is much lower than your economic costs, you're not competitive.
• 50:54
  Tim Cesarek: And so that's what a commercial point of view needs to tell you.
• 50:58
  Tim Cesarek: And then once you've established the fact that you have a solution that can be competitive and lower in the left of the cost stack, and you have a good sense of what attribute, quality attribute you're selling, because you can charge an additional margin for it, and it tells you that you can generate a return or your customer can generate a return.
• 51:17
  Tim Cesarek: Now you should have a good sense of what is the segment of the market that's going to that your applications can apply to.
• 51:24
  Tim Cesarek: And chance if you're in a good spot, it could be many markets, right?
• 51:28
  Tim Cesarek: The Synata Bios scenarios, we got many markets we can address.
• 51:32
  Chris Reichhelm: Yeah.
• 51:32
  Tim Cesarek: But then you have to be disciplined to say, what really gives us the right to win?
• 51:37
  Tim Cesarek: Where can we hands down be the solution?
• 51:40
  Tim Cesarek: And so then you have to narrow that funnel.
• 51:42
  Tim Cesarek: This is where that counter intuition comes in, which is, Where do we feel based upon the market feedback we can be?
• 51:48
  Tim Cesarek: So to come back to your question, that should take three folks.
• 51:53
  Chris Reichhelm: Yeah.
• 51:54
  Tim Cesarek: And once you have that, and maybe I'm just underestimating it, but I think in my heart, it's probably three, three folks, but then now you've got to go execute, right?
• 52:06
  Tim Cesarek: And the folks that sometimes are ones that help in establishing that compliant commercial point of view.
• 52:12
  Tim Cesarek: It may not be the good executors, right?
• 52:16
  Tim Cesarek: Um, you know, there's a difference between a person who can open the door and can close the deal.
• 52:23
  Tim Cesarek: And so there are those enablers, there are door openers, and there are door closers from a commercial perspective.
• 52:31
  Tim Cesarek: It's ideal to find somebody that has all those capabilities.
• 52:35
  Tim Cesarek: It's rare to find somebody with all those capabilities.
• 52:38
  Tim Cesarek: So many times you have enablers and you've got experienced door openers with door closers.
• 52:44
  Tim Cesarek: And so my point is, is that your team size is going to vary based upon how you populate that team based upon that experience level.
• 52:53
  Chris Reichhelm: How much of a deal closer do you need in the early days?
• 52:58
  Tim Cesarek: Ooh, I would say you need one, but it's a different deal closer.
• 53:06
  Chris Reichhelm: How so?
• 53:09
  Tim Cesarek: So, uh, I would say that the deal closer in the early stage, um, needs to be, I would say more empathetic.
• 53:24
  Tim Cesarek: Somebody who truly can be intellectually honest about the technology risks that you're offering relative to the risk appetite of the other party.
• 53:34
  Tim Cesarek: So you have to understand what is that risk appetite.
• 53:37
  Tim Cesarek: And it's somewhere in there, you can't be bashful and you gotta close.
• 53:43
  Tim Cesarek: As the risk comes off the table, I think the closing process, although it's difficult, it becomes, I would just say, much more straightforward, becomes more programmatic.
• 53:58
  Chris Reichhelm: If, uh, if you had a blank sheet, Tim, you know what I'm going to say, if you had a blank sheet, you could create a business from scratch with all the lessons you've learned over the years.
• 54:13
  Chris Reichhelm: What are some of the top lessons that you would apply?
• 54:17
  Tim Cesarek: Uh, establish your purpose early on.
• 54:23
  Tim Cesarek: Um, again, as Simon Sinek would say, know your why.
• 54:28
  Chris Reichhelm: Yeah.
• 54:31
  Chris Reichhelm: Why is that so important?
• 54:33
  Chris Reichhelm: Why is knowing your why so important?
• 54:37
  Tim Cesarek: Well,.
• 54:38
  Tim Cesarek: Um, well, to me, I think it, it, it, it has to be something that people ultimately can identify with.
• 54:49
  Tim Cesarek: Sorry to quote Simon Sinek again, people don't buy what you do, they buy why you do it.
• 54:55
  Tim Cesarek: And so if you sit there and can converse with an individual as to why you are so passionate about the solution that you have into the marketplace.
• 55:05
  Tim Cesarek: What drives you and what you're trying to change, now you've stimulated a form of conversation that doesn't sound like that person you're sitting next to on the airplane that's like, blah, blah, blah, right?
• 55:15
  Tim Cesarek: So, sorry to say that, but I mean, how many times have we been in that situation where, uh, you want to be able to engage an individual based upon the purpose that you have.
• 55:27
  Tim Cesarek: And I think that's so important.
• 55:28
  Tim Cesarek: But once you have that, remember, that is the kernel of the vision that needs to proliferate itself throughout the organization.
• 55:35
  Tim Cesarek: So, Right?
• 55:37
  Tim Cesarek: That is the seed for what you build your organization from.
• 55:41
  Tim Cesarek: If you can't articulate your why to the people on the team, I mean, this is where, as you know, and I'm sure, you know, again, there are cases that are out there, right?
• 55:52
  Tim Cesarek: Where people have lost their way and lost their vision because of the disconnect between what they do and why they do it.
• 56:01
  Tim Cesarek: And so this is why it's so important.
• 56:04
  Chris Reichhelm: So connecting with your why, number one, having that purpose.
• 56:09
  Tim Cesarek: Number two, I would say, um, discover as fast as you can, um, go learn from the market, go to trade shows, go talk to people, converse in your solution, be respectful of people's time.
• 56:36
  Tim Cesarek: Don't sit there and talk for an hour when you can maybe just talk for 15 or 20 minutes.
• 56:41
  Tim Cesarek: But go discover, and remember, it's not all about the tech, right?
• 56:50
  Tim Cesarek: What is the purpose of what you're trying to solve for?
• 56:53
  Chris Reichhelm: How much discovery do you need to do?
• 56:56
  Chris Reichhelm: How long does the discovery process go on for?
• 56:59
  Tim Cesarek: I would, to be honest with you, I would say that, that if I had a continuum of time, I would love to find 50 percent of my time relative to discovery and 50 percent of around market discovery and 50 percent of the time around technical discovery.
• 57:17
  Tim Cesarek: And I know that sounds really counterintuitive, particularly when you may be working at a beaker scale, but again, if your goal is to generate profitability, why are you spending time doing something in a beaker, right?
• 57:34
  Tim Cesarek: Unless you feel that there's going to be a significant societal benefit associated with that, right?
• 57:42
  Tim Cesarek: You know this.
• 57:43
  Tim Cesarek: I mean, if it's going to make its way into society, you've got to create commerce around it.
• 57:49
  Tim Cesarek: I'm sorry to say that, or somebody's got to support that, whether it's you as a taxpayer, or whether it's somebody in a commercial market, somebody's got to support that.
• 57:59
  Tim Cesarek: the benefit associated, right?
• 58:02
  Chris Reichhelm: Yeah, absolutely.
• 58:03
  Tim Cesarek: So to me, discovery is just as important from a commercial perspective as it is from a tech perspective.
• 58:09
  Chris Reichhelm: Yep.
• 58:09
  Tim Cesarek: And early on.
• 58:10
  Tim Cesarek: And then finally, I would say, get integrated as soon as possible into your ecosystem.
• 58:18
  Tim Cesarek: Don't think that you're the only entity in the world that has a solution.
• 58:27
  Tim Cesarek: So learn from that ecosystem.
• 58:30
  Tim Cesarek: Who are your vendors?
• 58:32
  Tim Cesarek: Who are your customers?
• 58:33
  Tim Cesarek: Who are your suppliers?
• 58:35
  Tim Cesarek: Who has the leverage?
• 58:36
  Tim Cesarek: Who doesn't have the leverage?
• 58:39
  Tim Cesarek: Again, this is just kind of learning that ecosystem gives you a good sense of not only the development of your strategy, you also know that tactics is just as important as strategy.
• 58:50
  Tim Cesarek: So by understanding that ecosystem, you can develop your strategy and then know how to tactically maneuver within that ecosystem.
• 58:57
  Chris Reichhelm: Yeah, Tim, this was awesome.
• 59:03
  Chris Reichhelm: Thank you so much.
• 59:04
  Chris Reichhelm: I could just, maybe we'll continue running.
• 59:07
  Chris Reichhelm: This was great, but honestly, thank you so much for joining us today.
• 59:13
  Chris Reichhelm: This has been great.
• 59:15
  Tim Cesarek: My pleasure.
• 59:16
  Chris Reichhelm: You've been listening to the Lab to Market Leadership Podcast, brought to you by Deep Tech Leaders.
• 59:22
  Chris Reichhelm: This podcast has been produced by Beauxhaus.
• 59:25
  Chris Reichhelm: You can find out more about us on LinkedIn, Spotify, Apple, or wherever you get your podcasts.