Latest / Lab to Market Leadership with Chris Reichhelm / Scaling Battery Technology | Rob Davies | 6K Energy

Transcript

Scaling Battery Technology | Rob Davies | 6K Energy · Lab to Market Leadership with Chris Reichhelm

• 0:00
  Rob Davies: Startups typically can fall in love with the technology and forget to think about how do we now bring this to market?
• 0:06
  Rob Davies: And how do we scale this to meet customers expectations?
• 0:09
  Rob Davies: And, you know, it's hard to put a, a, a metric behind how frequently that happens, but it does happen particularly when you have the founders or the owners still involved in technology development.
• 0:24
  Rob Davies: You know, that's their speciality and, and it takes a different skill set to think about building the commercial facing part of the organization.
• 0:32
  Rob Davies: The manufacturing part of the organization.
• 0:35
  Chris Reichhelm: Welcome to the Lab to Market Leadership podcast.
• 0:38
  Chris Reichhelm: Too many advanced science and engineering companies fail to deliver their innovations from the lab to the market.
• 0:45
  Chris Reichhelm: We are on a mission to change that.
• 0:47
  Chris Reichhelm: My name is Chris Reichhelm and I'm the founder and CEO of Deep Tech Leaders.
• 0:52
  Chris Reichhelm: Each week we speak with some of the world's leading entrepreneurs, investors, corporates, and policy makers about what it takes to succeed on the lab to market journey.
• 1:02
  Chris Reichhelm: Join us.
• 1:03
  Chris Reichhelm: If you're an executive or entrepreneur building an advanced materials or chemicals company and you're wondering how you're going to scale it, when you're going to scale it, what the obstacles and challenges of that part of the lab to market journey are going to look like.
• 1:21
  Chris Reichhelm: Then you need to listen to this week's podcast.
• 1:24
  Chris Reichhelm: For your listening pleasure.
• 1:25
  Chris Reichhelm: I have Rob Davies.
• 1:27
  Chris Reichhelm: Rob is a process engineer by background, a senior manufacturing and operations leader.
• 1:34
  Chris Reichhelm: He has served in very large corporates like Blue Circle, Lafarge, Wholesome, Cabot Corporation, and is now a fully paid up member of the startup world, working with a company called 6K, a spin out from MIT.
• 1:50
  Chris Reichhelm: 6K produces advanced materials for the additive manufacturing and battery worlds.
• 1:56
  Chris Reichhelm: I am hoping to have the kind of discussion with Rob where we really get into the guts of what being a manufacturing and operations leader is in a business like this.
• 2:08
  Chris Reichhelm: I know that Rob joined the company when they were about TRL 4/5 and they were questioning their own scaling journey.
• 2:15
  Chris Reichhelm: I'm really interested to hear how it's gone.
• 2:19
  Chris Reichhelm: I'm hoping that for your benefit, we can get an understanding of that journey, all of the different risks, the challenges, the obstacles they've had to overcome, and the cultural transformation they've had to go on.
• 2:31
  Chris Reichhelm: Because remember, this is a big cultural transformation too.
• 2:34
  Chris Reichhelm: So with all of that, I hope you enjoy the podcast.
• 2:38
  Chris Reichhelm: Let's get into it.
• 2:43
  Chris Reichhelm: Rob Davies, thank you for joining me.
• 2:46
  Rob Davies: You're welcome.
• 2:47
  Rob Davies: I'm looking forward to this.
• 2:48
  Rob Davies: Thank you, Chris.
• 2:49
  Chris Reichhelm: For, I want to jump right into it.
• 2:53
  Chris Reichhelm: You've, you know, we've got the pleasure of your company today and and you bring with you a, uh, a rich background in managing and scaling and bringing to market novel chemistry based innovations.
• 3:09
  Chris Reichhelm: If you wouldn't mind for our listeners, when you joined 6K, Where were they in their development?
• 3:17
  Rob Davies: So they'd achieved, if I describe this in TRL, some concepts, you know, they'd achieved the experimental proof of concept.
• 3:26
  Rob Davies: They'd achieved that in the lab.
• 3:28
  Rob Davies: They'd achieved technical validation by having some feedback from customers.
• 3:33
  Rob Davies: And they were scaling to that one ton a month pilot scale, where you run a pilot scale, typically, you know, five days, five working days per week.
• 3:43
  Rob Davies: And they were starting to contemplate, so what comes next?
• 3:47
  Rob Davies: And they had the concept of having a 24/7 pilot operation.
• 3:53
  Rob Davies: Um, they were planning to build it nearby.
• 3:56
  Rob Davies: Um, but we then began to look at, you know, what the utility requirements of that pilot facility would look like, and we realized it would be a lot more cost effective to co locate it with the full scale production site.
• 4:11
  Rob Davies: And so we decided at 6K to locate both the 24/7 pilot facility and the full scale production facility in Tennessee.
• 4:20
  Rob Davies: Um, I think that's the pivot point that you need to begin to engage manufacturing leaders when you're starting to recognize, yes, we have a concept, yes, we're getting good customer feedback, and it's time to think about how we now build larger production capabilities.
• 4:38
  Rob Davies: That was the time, I think, to engage people with the sort of experience that I bring to, to an organization.
• 4:44
  Chris Reichhelm: So is that somewhere between a TRL 6 and 7 at the point when you started to get involved?
• 4:51
  Rob Davies: Yeah, 5, 6, 5, 6, 7 is in that era.
• 4:55
  Chris Reichhelm: Yeah.
• 4:56
  Rob Davies: We, um, we certainly had the ability to produce a consistent product in the Battery Center of Excellence.
• 5:05
  Rob Davies: Um, we'd already shipped samples to customers and got validation that yes, the performance was, you know, very interesting to these customers.
• 5:14
  Rob Davies: And we got confirmation that they wanted to see larger scale samples, and so from a PPAP perspective, you know, they were asking, when can we get the C sample and the D samples?
• 5:25
  Rob Davies: And so that was the time then to think about transitioning to larger scale capacity.
• 5:29
  Chris Reichhelm: That makes sense.
• 5:31
  Chris Reichhelm: From your experience, how often have you seen situations where technology is developed, material or chemistry is developed, without much thinking for the manufacturability of it.
• 5:46
  Rob Davies: Um, you know, the people that develop the technology are, you know, ingrained in, in the minutiae of developing the technology.
• 5:56
  Rob Davies: And they're in love with, you know, the nuances that come with, with the novel technology.
• 6:02
  Rob Davies: Um, you need a different mindset to think about, so how do we translate this now to actually building a production facility?
• 6:09
  Rob Davies: How do we think about the provision of utilities?
• 6:12
  Rob Davies: How do we think about organizing labor?
• 6:15
  Rob Davies: How do we make it efficient?
• 6:17
  Rob Davies: Um, how do we make sure we have the ability for continuous improvement and that the technologists that have developed, you know, the, the process that we're working with, typically haven't got that experience, typically are focused on the development of the technology and not so much on how to now scale it and build a manufacturing facility.
• 6:39
  Rob Davies: And so their complementary skills, But, you know, smart organizations recognize that you need to make this transition.
• 6:47
  Rob Davies: And, uh, luckily enough at 6K, they recognized that and hired, you know, competent people at the right time.
• 6:55
  Rob Davies: Um, but startups typically can fall in love with the technology and forget to think about how do we now bring this to market and how do we scale this to meet customers expectations?
• 7:06
  Rob Davies: And.
• 7:07
  Rob Davies: You know, it's hard to put a metric behind how frequently that happens, but it does happen, particularly when you have the founders or the owners still involved in technology development.
• 7:21
  Rob Davies: You know, that's their speciality and, and it takes a different skillset to think about building the commercial facing part of the organization and the manufacturing part of the organization.
• 7:31
  Chris Reichhelm: It does.
• 7:32
  Chris Reichhelm: And so how, what can founders do?
• 7:36
  Chris Reichhelm: These same types of founders who are generally obsessed by the technology.
• 7:42
  Chris Reichhelm: Uh, and for good reasons too, um, what are some of the things they can do in your view to avoid the trap of creating something that ultimately they're going to struggle to commercialize and scale?
• 7:59
  Rob Davies: You know, I think it's key to get good advisors around the founders.
• 8:04
  Rob Davies: Um, whether they are parts of the management team or whether they are, you know, part of the board of directors or an advisory board of directors, I think it's important to have people that have seen technology growth and technology launch so that you can provide the right advice and provide the right steerage when needed so that you don't end up, you know, in the narrow focus of being only mindful of what's the next step in the technology development.
• 8:38
  Rob Davies: You have to step back and think about where does this take us in terms of customer acceptance, How do we take our proposition to the market and gain acceptance at the commercial level?
• 8:50
  Rob Davies: And then how do we support that by having the right manufacturing footprint at the right scale, at the right time, uh, to compliment, you know, the growth commercially.
• 9:00
  Rob Davies: And so the, the skillset commercially and from a manufacturing perspective really are quite different.
• 9:06
  Rob Davies: And I think having good advisors around the founders is the place to get the right direction here.
• 9:15
  Rob Davies: It's hard to think as a founder, you know, when's the right time to bring a commercial leader on or a manufacturing leader.
• 9:22
  Rob Davies: But I think the advisors can judge and provide good advice.
• 9:27
  Chris Reichhelm: How, how effective can engineers be early on in the process?
• 9:31
  Chris Reichhelm: Good scale up and engineering leaders, in your view?
• 9:38
  Rob Davies: You know, I think it needs to come a little later.
• 9:42
  Rob Davies: You know, it needs to come at the point where you're starting to think about taking.
• 9:46
  Rob Davies: the novel technology into a manufacturing environment.
• 9:50
  Rob Davies: That's the time when you need to be thinking about, you know, how do we, how do we provide the utilities?
• 9:56
  Rob Davies: How do we operate this?
• 9:58
  Rob Davies: You know, how, how, how much automation do we apply for the first generation of units?
• 10:04
  Rob Davies: And do we wait for the second or the third generation before we introduce higher levels of automation?
• 10:10
  Rob Davies: Because when you automate, you know, you, you take the human touch out of it and you have the risk here that maybe you haven't fully anticipated all of the automation scenarios that you need to.
• 10:22
  Rob Davies: And so there's a balance here as to when you transition from a manual operation to an automated operation as well.
• 10:29
  Chris Reichhelm: Yeah.
• 10:29
  Rob Davies: But I think it's at that point that it's the right time to bring engineers on board, people that have worked in the manufacturing environment so that they can be thinking about those things.
• 10:38
  Chris Reichhelm: Yes, yes.
• 10:40
  Chris Reichhelm: The, um, the, can you walk us through a little bit of 6K's journey from the pilot stage when you met them to their first of a kind?
• 10:52
  Rob Davies: Yeah, so there were a couple of, um, milestones I would say that we introduced.
• 10:59
  Rob Davies: And maybe this speaks to how the technologists need to have a different set of skills at the table when you're starting to make this transition.
• 11:10
  Rob Davies: You know, when I first arrived, they were contemplating building a 24/7 pilot facility.
• 11:19
  Rob Davies: And in terms of organizing the project, you know, they had a program management mindset.
• 11:26
  Rob Davies: And I know program management is typically about going through various stage gates.
• 11:31
  Rob Davies: Um, but when you're coming to build a facility, you do need to have construction skill sets and construction program management skill sets.
• 11:42
  Rob Davies: And there are some tools out there.
• 11:44
  Rob Davies: Um, things like front end engineering design and FEL1 through to FEL5 and FEL6.
• 11:52
  Rob Davies: You know, you need to approach the project, recognizing that you've got to go from a concept design through to the basis of design, through to a set of engineering drawings that you can get quotes from vendors.
• 12:08
  Rob Davies: Um, you've got to have, you know, a document that you can describe the basis of design and you've got to engage, you know, people that can build the building for you.
• 12:18
  Rob Davies: So you need to engage architects, you need to engage process engineers that can do the plant layout, you need to engage control engineers so that you can actually control and operate the plant.
• 12:30
  Rob Davies: And so I arrived at 6K as they were wrestling with, with this transition and they were quite accustomed to managing, uh, technology development using a program management framework and using stage gates, but certainly weren't familiar with, um, FE, FEL frameworks and FEED frameworks and hadn't really thought through, you know, are we going to do an EPC style project?
• 12:59
  Rob Davies: Or are we going to do a design build style project?
• 13:03
  Rob Davies: And so luckily, uh, for me and luckily for the team, you know, I arrived just at the time that we were able to have those discussions and make conscious choices about transitioning.
• 13:13
  Rob Davies: And we actually chose to do a design build concept, um, pace was important, you know, we needed to manage the timeline of going from the A and the B samples to the C and the D samples in a way that matched the commercial growth and our ability to build contracts with customers.
• 13:35
  Rob Davies: And so the pace became really important.
• 13:38
  Rob Davies: And you know, EPC is typically where you do the engineering phase, you hit a pause button and review it.
• 13:44
  Rob Davies: Then you do the procurement phase.
• 13:46
  Rob Davies: You have another review before you went to construction, but with design build, you've actually got the design work going on in parallel with the procurement work in parallel with construction starting as well.
• 14:02
  Rob Davies: And so the project that we have active here at 6K is, is a true design build project.
• 14:09
  Rob Davies: Um, working backwards, you know, we've broken ground and we are setting up the building plan.
• 14:15
  Rob Davies: Um, we're still actually procuring equipment and utilities and the framework of the building.
• 14:23
  Rob Davies: And there are still some parts of the design that are still being worked on.
• 14:27
  Rob Davies: And so it is a very parallel process, but it allows you to really concentrate the timeline of the project.
• 14:35
  Rob Davies: And instead of what would have been maybe a two and a half to a three year EPC style project, we're able to execute this in about 15 to 18 months.
• 14:44
  Rob Davies: So a very significant time saving, but obviously the level of project risk changes.
• 14:51
  Rob Davies: Um, and maybe we can talk a little bit about project risk for a few seconds.
• 14:56
  Chris Reichhelm: Before we do that, can I ask one quick question in there?
• 14:58
  Chris Reichhelm: Before we talk about project risk, what was it that led you to believe that design build was the better direction than EPC?
• 15:07
  Rob Davies: You know, the only new piece of equipment to the world was the plasma technology that we were introducing.
• 15:13
  Rob Davies: All of the raw material preparation and the post UniMelt process steps were all quite mature and we could get process guarantees from vendors.
• 15:26
  Rob Davies: Um, and so there was relatively low risk with most of the flowsheet.
• 15:31
  Rob Davies: And because we owned the technology, You know, we understood the risk that came with that.
• 15:37
  Rob Davies: And so for us, it was a, a natural step to take that we can own the technology risk and the overall production risk, because we understood the risk that we had with our own technology.
• 15:51
  Rob Davies: And we had that vendors provide us with process guarantees for the balance of the technology.
• 15:56
  Rob Davies: So from a risk perspective, we had our eyes open in terms of where we had overall project risk.
• 16:04
  Rob Davies: Um, and then as we engaged with vendors, you know, they were obviously it, we started this project at the tail end of COVID.
• 16:14
  Rob Davies: And so some supply chain issues were very long, you know, electrical equipment, for example, and switchgear at a really long lead time.
• 16:24
  Rob Davies: And so we needed to place orders for some of that switch gear early in our overall project timeline.
• 16:30
  Rob Davies: Otherwise we wouldn't have been able to keep the project on track.
• 16:34
  Rob Davies: And so a couple of issues influenced our choice here.
• 16:38
  Rob Davies: Um, we, we didn't have the luxury to do engineering and then do procurement, particularly because of the supply chain issues.
• 16:46
  Rob Davies: Um, but we also felt we owned the risk of our UniMelt plasma technology.
• 16:52
  Rob Davies: And so it became a natural choice for us to take the design build approach.
• 16:56
  Chris Reichhelm: I got it.
• 16:57
  Chris Reichhelm: I got it.
• 16:58
  Chris Reichhelm: You mentioned you wanted to discuss process risk a little bit.
• 17:04
  Rob Davies: Yeah.
• 17:04
  Rob Davies: So I hinted a little bit about that a few minutes ago.
• 17:08
  Rob Davies: Um, you know, when we have, let's say a six step production process, um, each one of them introduces a degree of risk, but now you've got to match the process capabilities of one step with the the following step, um, and you've got to make sure that the vendors are willing to sign up for the flow sheet that you've designed and the capability that you're providing.
• 17:35
  Rob Davies: Um, and from a project perspective, you know, there are, it's like a triangle.
• 17:41
  Rob Davies: You've got risk to worry about, you've got schedule, and you've got cost.
• 17:46
  Rob Davies: And so you can typically manage two of these quite comfortably, but it's really hard to manage all three.
• 17:51
  Rob Davies: Um, and so as we thought about risk, um, we decided to derisk the project with some tangible steps.
• 18:01
  Rob Davies: Um, we went out to market and found general contractors and architects that were accustomed to working with novel technology.
• 18:11
  Rob Davies: And were accustomed to working in a design build project environment, so we derisked our project by taking those steps.
• 18:23
  Rob Davies: Our UniMelt was new to the world, and we decided to launch the first production facility with our Gen 1, our first generation of UniMelt, as opposed to introducing a Gen 2 or a Gen 3 which was, you know, not quite as mature in terms of his technical capability.
• 18:43
  Rob Davies: So we de-risked the project by going with a smaller scale, but proven technology.
• 18:50
  Rob Davies: And we also de-risked the project by then picking partners to help us with, you know, the fabrication of some of the equipment and the, um, provision of assembled components.
• 19:03
  Rob Davies: And so we thought about, you know, the overall project risk in a couple of different ways, both from a contracting perspective, from a partner perspective, and then from the generation of the technology that we were deploying.
• 19:17
  Rob Davies: And so those were several key steps that we contemplated as we put the project together.
• 19:24
  Rob Davies: And it all fitted quite neatly with a design build program, because it allowed us then to continue to refine some issues whilst we took care of some long lead time items, for example, ordering the electrical equipment.
• 19:40
  Rob Davies: And, you know, they originally were on, uh, lead times of 60 weeks, and that's since changed.
• 19:47
  Rob Davies: But when we started, you know, that was an important, you know, component.
• 19:51
  Rob Davies: Uh, timeline for us, and we wanted to de risk that and place those orders early.
• 19:55
  Chris Reichhelm: You know, the capital requirements to pursue this line, this strategy, are they raised compared to EPC?
• 20:04
  Rob Davies: Yeah, it certainly has the potential to have a higher project cost because, you know, the value of EPC is you do competitive tendering and you level the tenders and you create some leverage with the vendors to drive down some, some cost savings.
• 20:21
  Rob Davies: We were successful, though, in driving some procurement savings during our design build project, because we had the mindset that we would always have two plus one vendors.
• 20:33
  Rob Davies: We would always have two proven, qualified vendors that we could, you know, put against each other from a competitive perspective and one vendor that was a developing vendor that maybe brought, you know, a new technology or a cheaper technology or something that gave us a competitive advantage.
• 20:54
  Rob Davies: And so we, we applied this two plus one concept very consistently throughout all the procurement phases here and actually achieved some significant cost savings cause we always had two companies that were qualified and viable, and we were able to leverage one against the other to get, you know, good economies in terms of the procurement savings.
• 21:17
  Rob Davies: Um, so we were, we didn't, um, pay dearly, you know, from a design build cost perspective.
• 21:24
  Rob Davies: I think we feel really good about the cost of the project.
• 21:29
  Rob Davies: For sure, had we had more time and were able to drive more procurement savings, we might have saved a little more.
• 21:36
  Rob Davies: But the advantage is that we've now come to market a lot faster than had we gone through that longer process.
• 21:41
  Rob Davies: And coming to market early was really important with this technology.
• 21:49
  Chris Reichhelm: On the commercial journey, how successful has 6K been at managing those commercial expectations with potential partners and customers?
• 21:55
  Chris Reichhelm: And, and, you know, what is your view on how that's done best?
• 22:01
  Rob Davies: So in the, um, the battery material space, you know, there are a couple of different categories that we've, we've thought about.
• 22:09
  Rob Davies: Um, you have the OEMs, you know, the large automotive car companies.
• 22:14
  Rob Davies: Who have very heavy process.
• 22:17
  Rob Davies: Um, they have a lot of qualification criteria.
• 22:20
  Rob Davies: They expect us to implement things like the IATF standard where you have to have supply chain risk processes and quality management systems.
• 22:32
  Rob Davies: Um, and then you have the, the companies that produce things like domestic batteries.
• 22:40
  Rob Davies: Um, they have a lot less process, there's a lot less risk involved, and we categorized the domestic battery producers as GoFast customers, and then the large OEMs as the OEM category.
• 22:57
  Rob Davies: And having two categories of customers allowed us to be able to come to market quickly with the GoFast customers.
• 23:05
  Rob Davies: and prove the concept and build a portfolio of supply contracts whilst at the same time working with the larger OEMs that have more stringent qualification criteria and a lot more process to work through to, you know, secure a contract.
• 23:24
  Rob Davies: You know, the RFQs that you get from a, from an automotive car company can run to hundreds of pages.
• 23:32
  Rob Davies: Uh, we dealt with one the other day that was 600 pages long, that the battery producers, they might give you a two or a, a 10 page RFQ.
• 23:43
  Rob Davies: You know, there, there's a very difference, significant difference here in the rigor that these companies bring to commercial negotiations.
• 23:51
  Rob Davies: And we've got a handful of, um, contracts in place with the GoFast customers, people that are in the domestic battery sort of environment.
• 24:00
  Rob Davies: And we're working through at least half a dozen RFQs now with, you know, automotive OEMs.
• 24:07
  Rob Davies: And it's a process, and you know, we've had to dedicate some people to just work the process to make sure that we are meeting the timelines and meeting the criteria that they set.
• 24:18
  Chris Reichhelm: Are there lessons you've picked up on how best to manage this process?
• 24:25
  Rob Davies: I think people count for a lot here.
• 24:28
  Rob Davies: Having the right skills in the team.
• 24:31
  Rob Davies: I think is critical.
• 24:33
  Rob Davies: Um, having the right commercial mindset to make sure that you can win in the commercial environment and bring the potential for revenue into the business.
• 24:45
  Rob Davies: That's a real key to be able to scale your business because without commercial contracts, you don't have a book of business.
• 24:55
  Rob Davies: The technology team also has to be agile.
• 24:58
  Rob Davies: Um, you've got to be able to, you know, learn as you gain more experience and apply it and course correct and improve.
• 25:06
  Rob Davies: And so there's a strong continuous improvement mindset that's needed in that technology team.
• 25:12
  Rob Davies: And then the manufacturing team bring almost a different set of skills.
• 25:18
  Rob Davies: You know, they need to be able to build a facility.
• 25:22
  Rob Davies: They need to be able to lay out the flow sheet.
• 25:25
  Rob Davies: They need to be able to think about how are we going to operate the equipment?
• 25:29
  Rob Davies: What sort of skills do we need?
• 25:30
  Rob Davies: Are we going to automate this or are we going to have, you know, unskilled labor to be able to operate the plant?
• 25:37
  Rob Davies: And And a very different skill set to, you know, trying to prove out the technology and figure out what's the next improvement we can make with the technology.
• 25:46
  Rob Davies: And so I think the symphony, as you described it, needs many different sections.
• 25:52
  Rob Davies: You know, you've got to have people with skills in all three of those dimensions.
• 25:58
  Rob Davies: Um, and they need to complement each other and sign up to the mission and then be able to integrate their activities in a way that you've blended it to develop a coherent business plan.
• 26:08
  Chris Reichhelm: We've worked with a number of clients who have chosen to work with third party manufacturing groups in order to help them scale and, uh, and, and others like yourselves are taking this on themselves.
• 26:23
  Chris Reichhelm: Do you have a view as to when a group may?
• 26:28
  Chris Reichhelm: should go with the third party versus taking it in house?
• 26:36
  Rob Davies: I personally think the in house approach has a lot more ownership of the technology, ownership of the business plan, and ownership of the success of the enterprise.
• 26:50
  Rob Davies: You know, development of the novel technology, I think is clearly best owned in house.
• 26:58
  Rob Davies: Um, you understand the nuances of the technology, you understand the dependencies of one piece of componentry with another piece of the components.
• 27:09
  Rob Davies: Um, and early investors are always looking for.
• 27:14
  Rob Davies: deep understanding of what it is you're creating.
• 27:18
  Rob Davies: But when you're developing a full scale production site, you know, you need then a different blend of skills.
• 27:25
  Rob Davies: You need to be able to put the process steps together, you need to be able to design the layout, provide the utilities, make the right decision on automation.
• 27:36
  Rob Davies: Um, and that's where some good advice can be helpful.
• 27:40
  Rob Davies: And at 6K, you know, we, we were intentional about making sure that we could project manage this in house, but we would outsource the engineering and the architecture and the control strategy.
• 27:57
  Rob Davies: Um, but we made sure that the project team had the knowledge about the technology and the experience to actually bring a technology to market.
• 28:08
  Rob Davies: Um, but we partnered with people that were comfortable with the design build philosophy and were comfortable with the pace.
• 28:17
  Rob Davies: And sometimes, you know, we don't have all of the answers and the contractors typically have to be comfortable with some ambiguity.
• 28:27
  Rob Davies: Um, but you know, if, had we gone down an EPC route, um, for sure we could have contracted somebody at a price to program manage this for us.
• 28:39
  Rob Davies: But they wouldn't have the same ownership and the same passion to make sure that it succeeded.
• 28:45
  Rob Davies: And we would have probably spent a lot more time focusing on project communication and project alignment, trying to make sure that all the parties had the same set of data and the same facts.
• 28:58
  Rob Davies: Um, and particularly when you get into large chemical projects, Um, you know, it's more typical that you have a dedicated program manager in the middle of all the contractors coordinating all the pieces.
• 29:12
  Rob Davies: Um, I'd like to think that the technology that we're building at 6K is modest in terms of its complexity.
• 29:20
  Rob Davies: And we saw more value in leading it from an internal perspective, but just partnering with some capable contractors that could support us with the right skills when we needed it.
• 29:31
  Chris Reichhelm: You mentioned earlier about the, the journey that technology development teams need to go on in order to adapt to, uh, to this phase of the lab to market journey.
• 29:44
  Chris Reichhelm: When you start producing at scale, can you talk a little bit about the evolution at 6K?
• 29:51
  Chris Reichhelm: of that technology development team.
• 29:54
  Chris Reichhelm: And the practices and the behaviors, uh, you know, is it something that's been quite natural for them?
• 30:01
  Chris Reichhelm: Has it been a challenge in certain areas?
• 30:06
  Rob Davies: So, um, the technology team has grown over time.
• 30:12
  Rob Davies: Um, you know, the technology was a PhD thesis way back in 2014, and it got spun out.
• 30:20
  Rob Davies: And, you know, the original organization was only a handful of people, and they were trying to explore, you know, where does this technology have its best application?
• 30:30
  Rob Davies: And so they went through a couple of years of discovery to try and understand, you know, where can we best apply this unique process, um, you know, treating materials to 6, 000 Kelvin is quite a unique chemical environment.
• 30:46
  Rob Davies: Um, it's the temperature of the sun, by the way, and, uh, figuring out what chemical reactions were best suited to this process did take some time.
• 30:57
  Rob Davies: The technology leader, the CTO, had experience from a couple of other battery startups.
• 31:03
  Rob Davies: And so he brought that unique knowledge about what it takes to be successful at the current phase and what it would take to be successful at the next phase of growth.
• 31:13
  Rob Davies: And so he was very instrumental in guiding that transition and very successful at it.
• 31:18
  Chris Reichhelm: That's super helpful.
• 31:19
  Chris Reichhelm: Rob, if you don't mind me asking, how early were they working with process engineers in the technology team?
• 31:26
  Rob Davies: Um, you know, we had some process engineers on board quite early because they were trying to figure out, you know, how to optimize process conditions.
• 31:36
  Rob Davies: But in the battery materials space, it probably came in the second wave of hiring as to when we brought chemical engineers on board so that they could operate the equipment and fine tune the equipment and then optimize, you know, the process conditions so that we could produce consistent products on a consistent basis.
• 31:56
  Chris Reichhelm: Yeah.
• 31:57
  Chris Reichhelm: Financing for businesses like 6K, not necessarily 6K, but businesses like 6K has been a challenge.
• 32:06
  Chris Reichhelm: Particularly over the last couple of years.
• 32:09
  Chris Reichhelm: Um, do you have any views?
• 32:12
  Chris Reichhelm: I mean, you guys are crossing the chasm right now of scaling these pilots by the design build stage.
• 32:19
  Chris Reichhelm: And, uh, and you've successfully raised as I understand it too.
• 32:24
  Chris Reichhelm: What advice or what lessons have you learned about this that you might pass on to others?
• 32:33
  Rob Davies: I think the organization needs to think about, um, the level of funding you need for the next phase of growth and maybe even the next two phases of growth.
• 32:45
  Rob Davies: Um, you know, you can't just be satisfied with having funds for the current phase.
• 32:52
  Rob Davies: Um, fundraising does take quite a time and you have, you know, it's all about building relationships and building, um, a level of understanding at the investor that they completely understand what you're trying to achieve today and what you're going to try and achieve in the next phase.
• 33:08
  Rob Davies: Um, so I think it's key to be thinking about your fundraising for the next one or two phases of your growth.
• 33:16
  Rob Davies: Um, and certainly before you commit to large investments.
• 33:20
  Rob Davies: Like building a, you know, a day shift pilot facility or building a 24/7 pilot facility.
• 33:27
  Rob Davies: You've got to make sure that you have the money in hand and the cash flow mapped out for the period that it will take to bring that, um, operation into full scale production.
• 33:40
  Rob Davies: Um, so you have to have some foresight.
• 33:43
  Rob Davies: You have to be able to build a cash flow that transitions several stages of growth.
• 33:48
  Rob Davies: Um, and you also have to be in parallel building relationships.
• 33:53
  Rob Davies: that are at different scales of investment.
• 33:56
  Rob Davies: You know, early investors are typically looking for your proof of concept.
• 34:02
  Rob Davies: They're looking for the ability to bring a new technology to market.
• 34:07
  Rob Davies: But then when you're going from the proof of concept to now trying to deliver samples to customers, the level of investment you need is typically higher.
• 34:15
  Rob Davies: And the level of understanding of the investors is a little different.
• 34:19
  Rob Davies: You know, they need to be mindful that you're bringing a concept to market and it's not just proving a concept, you're now trying to commercialize a concept.
• 34:31
  Rob Davies: One thing I would say though, that, you know, in the U.
• 34:33
  Rob Davies: S., in the U.
• 34:36
  Rob Davies: S., there are many government programs that allow you to support a growth such as this.
• 34:41
  Rob Davies: And we've been particularly successful because we had one individual dedicated to seeking out government programs.
• 34:51
  Rob Davies: Um, you know, we've probably raised over $150 million over the last few years from various government programs and the project that I'm currently executing, we actually have a, a, a grant of $50 million from the Department of Energy, which is part of the, the Biden Inflation Reduction Act.
• 35:10
  Rob Davies: Um, so the government is usually a rich source of funding provided you can tap into the right groups and get the right degree of support here at various phases of the growth.
• 35:20
  Chris Reichhelm: Absolutely.
• 35:21
  Chris Reichhelm: Well, the U.
• 35:22
  Chris Reichhelm: S.
• 35:22
  Chris Reichhelm: is blessed to have that program.
• 35:24
  Chris Reichhelm: Long may it continue.
• 35:26
  Chris Reichhelm: We'll see how long it goes on for, but, uh, but it's a great program.
• 35:30
  Chris Reichhelm: And I know they've been trying to attract companies from this side of the pond as well.
• 35:36
  Chris Reichhelm: Um, what about the, uh, The evolution of operations as a function within this type of company.
• 35:45
  Chris Reichhelm: Can you talk a little bit about that, about, about that role of operations leader, where it typically starts and when it might engage and how it evolves over time?
• 35:58
  Rob Davies: Well, that's a, that's a really good question.
• 36:00
  Rob Davies: You know, it, it does change with time.
• 36:02
  Rob Davies: Um, you know, a few minutes ago, we talked about the, the nature of the technology evolution and how you go from, you know, having a couple of engineers, just proving a concept to looking at different markets to then supporting that with product and process development.
• 36:19
  Rob Davies: It would certainly be too early once you're still in the proof of concept phase to be thinking about operations.
• 36:26
  Rob Davies: Um, you need to be thinking ahead that at some point you're going to have to commercialize this, but you don't need the team in place when you're still approving the concept out.
• 36:38
  Rob Davies: Um, but when you, when you're making that transition from, all right, we're now going from a lab scale concept to a pilot scale concept, and soon we're going to go to a 24/7 style of concept, uh, style of pilot plant.
• 36:53
  Rob Davies: That's about the time you need to think about how are we really going to operationalize this.
• 36:59
  Rob Davies: You know, how are we going to staff this?
• 37:01
  Rob Davies: Um, what's the degree of automation?
• 37:04
  Rob Davies: How are we going to move materials through this plant?
• 37:07
  Rob Davies: Um, how are we going to provide the utilities?
• 37:11
  Rob Davies: I think that's the time that you need, you know, operational capability.
• 37:15
  Rob Davies: Um, and obviously you don't need to hire a whole team in one instant here, but having one or two key leaders in place that understand how to make this transition and then know when to hire the right complementary skills and when to add, you know, new experiences and new skills to the team.
• 37:35
  Rob Davies: That initial operations leader should have the right experience to make that judgment so that you can, you know, not build too big of an organization too quickly and burn through a lot of cash, but build it quickly enough that you are a step or two ahead of where the projects will need to be in terms of executing, in terms of pouring concrete, putting steel in the ground and actually installing equipment.
• 38:00
  Rob Davies: Um, so that, that, that's, I think the transition point when you're going from the sort of the lab scale or the day shift environment to a 24/7 environment, that's, that's when you need a different set of skills.
• 38:14
  Rob Davies: Um, but you know, the, the operations team needs to be multidimensional in terms of skills.
• 38:22
  Rob Davies: They obviously need to know what good looks like, um, so that you can build a reliable plant and a plant that's easy to operate.
• 38:31
  Rob Davies: Um, you have to remember you're building this operations team alongside a technology team.
• 38:37
  Rob Davies: And so the technology team is usually very agile about taking new data and adapting and improving.
• 38:44
  Rob Davies: Sometimes that can be a little frustrating for the operations team.
• 38:47
  Rob Davies: You know, they want well defined scopes, well defined basis of design so that they can execute efficiently.
• 38:55
  Rob Davies: And so the operations team need a degree of agility as well here, because it's typically a fast paced organization.
• 39:02
  Rob Davies: And you have to be willing to wear multiple hats at any time and tackle multiple priorities because they don't come in in a linear fashion.
• 39:11
  Rob Davies: Um, and because of that, I think that, that the individuals need a degree of resilience.
• 39:15
  Rob Davies: They need to be able to, you know, handle competing priorities, changing dynamics, changing scopes.
• 39:23
  Rob Davies: Um, but certainly.
• 39:25
  Rob Davies: If you get the right skills in place, and they can be complementary to the technology team, then you could have a really successful project.
• 39:33
  Chris Reichhelm: Are the types of skills, sorry for interrupting, are the types of skills you need at the, when you're building your first prototypes, the types of operations skills you need then, are they the same ones you need when you are managing your operation, your, For TRL sake, you're TRL 9, you're in the market, you're producing at commercial scale.
• 39:57
  Chris Reichhelm: Are those the same types of operations executives or team members you need, or are they different?
• 40:05
  Rob Davies: You know, you could be fortunate enough to have some of the senior people that have experience with the development environment, as well as the scaling environment, as well as the production environment.
• 40:17
  Rob Davies: Um, so, you know, if you can find somebody that could work through that transition, then you'd have hit a home run.
• 40:23
  Rob Davies: Uh, but you're right, that there is subtly different.
• 40:27
  Rob Davies: And certainly when you get into the production environment, it's about reliability, it's about predictability, it's about consistency, and you need some discipline.
• 40:38
  Rob Davies: And that process discipline, um, it doesn't always, uh, appear when you're in that development phase where, New ideas are emerging and new process steps are being developed, and you need an agility, you know, the agility that comes with process development is a little different to the discipline that's needed to running, you know, production capability on a 24 7 basis.
• 41:04
  Rob Davies: You might be lucky to find individuals that can manage both of those dynamics, um, but they are subtly different and that's why you have to be willing to allow the team to evolve and bring the right skills into the organization at the right time.
• 41:20
  Rob Davies: You know, for the facility that we're building in Tennessee, we did take the philosophy that we would hire the management team early so that they could be involved in the process design, and then own it as we brought it into production.
• 41:35
  Rob Davies: And so we've handled a, sorry, we've hired a small leadership team.
• 41:39
  Rob Davies: And they'd be heavily involved with process design, but we all recognize when we get into full scale production, the complimentary skills that we'll have to bring on board alongside us will be more about consistency and quality management and having financial controls to make sure that the OPEX and the CAPEX are to plan, you know, that those skill sets are more stability focused and discipline focused.
• 42:07
  Rob Davies: compared to the, the sort of the entrepreneurial mindset that you have when you're designing something and you need to adapt because you've learned something new day to day.
• 42:18
  Chris Reichhelm: Yeah.
• 42:18
  Chris Reichhelm: Yeah.
• 42:20
  Chris Reichhelm: Let me ask, I've asked this question a couple of times already, but I want to ask it in a slightly different way, only because I want to know.
• 42:30
  Chris Reichhelm: The early technology development process, is there any way that can be improved upon by considering operational issues at an early stage?
• 42:44
  Chris Reichhelm: For example, manufacturability or supply chain issues or, uh, I don't know, whatever.
• 42:52
  Chris Reichhelm: I mean, it, or yes, regulatory issues as well.
• 42:56
  Chris Reichhelm: Um, and there could be lots of others, but in your view, or in your view, is it get through the technology development, let's see what you got, and then we'll worry about some of these operational issues once you've gotten past a certain stage.
• 43:15
  Rob Davies: Well, you know, I think it's context specific.
• 43:17
  Rob Davies: Um, if you were developing an assembly plant where you were putting widgets together to develop components or sub assemblies for something, you certainly need a high degree of predictability, and you certainly need to spend a lot of time on the manufacturing concepts before you put this whole plant together.
• 43:40
  Rob Davies: Um, I think a chemical process is a little, little more forgiving.
• 43:45
  Rob Davies: Um, at 6K, we were, we had the foresight to actually install full scale UniMelt production units in the Battery Center of Excellence.
• 43:57
  Rob Davies: And so we had operating data as to what a full scale UniMelt, uh, needs from a control perspective and what it needs from a utility perspective.
• 44:07
  Rob Davies: And, what it produces from a, from an output perspective.
• 44:11
  Rob Davies: Um, and so in our situation, um, we didn't need to be thinking too much about the overall manufacturing, um, capability whilst we were still developing the technology because we were developing at a full scale generation one unit.
• 44:30
  Chris Reichhelm: How early was that unit in place?
• 44:32
  Chris Reichhelm: How early was that unit in place?
• 44:34
  Chris Reichhelm: Like how many years into the journey?
• 44:37
  Rob Davies: Uh, maybe three, three years into the overall journey.
• 44:40
  Chris Reichhelm: Yep
• 44:42
  Rob Davies: they had previous generations of it, but we, um, we built the Battery Center of Excellence with, with four full scale UniMelts.
• 44:51
  Rob Davies: Um, and we ran them on campaign basis, not on full, uh, full-time basis, but on a campaign basis.
• 44:58
  Rob Davies: We understood.
• 45:00
  Rob Davies: you know, the process parameters and the needs of the process unit.
• 45:04
  Rob Davies: Now, when we began to decide, all right, now it's time for us to pivot from, um, you know, a lab environment or a day shift pilot environment to a 24/7 environment, that was the time we began to consider.
• 45:18
  Rob Davies: So how do we marry the Unimount up with the raw material preparation steps and with the post treatment steps?
• 45:25
  Rob Davies: For us, that was the right time to be thinking about the manufacturing scale up process.
• 45:31
  Rob Davies: Now, it's not, you know, a case where the same solution applies to all situations.
• 45:39
  Rob Davies: Had we had, maybe, had we not had the ability to run a full scale UniMelt, we might have spent a lot more time worrying about the scale up of the overall plant.
• 45:51
  Rob Davies: And maybe I should also underline here, there's a lot of effort put into designing the UniMelt so that it was a full scale UniMelt.
• 45:59
  Rob Davies: So, you know, there was development work that went along to think about the overall operation of a full scale UniMelt whilst they were developing, you know, the process and the product technology.
• 46:13
  Rob Davies: But from a integration of this unit into a full scale manufacturing plant, for us, it was a separate step.
• 46:19
  Rob Davies: And it, and it really happened when some new employees were brought on board, people like myself, who were brought on board to think about the scale up and the development of the, the manufacturing footprint.
• 46:32
  Rob Davies: And so the technology organization, you know, took the technology to a TRL 4, TRL 5, but then as we needed to transition to 24/7 pilot operation, and then full scale operation, we intentionally brought a different set of people on board and a different set of skills.
• 46:50
  Chris Reichhelm: That makes sense.
• 46:51
  Chris Reichhelm: And it's, it's, uh, that makes sense and that, well, rightly or wrongly, that aligns with what I've seen.
• 46:59
  Chris Reichhelm: In the past and, and I guess aligns with my beliefs to an extent that the, if they're at a TRL 4.
• 47:05
  Chris Reichhelm: 5 and they've got a functioning pilot that is broadly at commercial scale, it may not be, it's not going to be 24/7, but they've got a functioning pilot from which they can learn that's going to, that's going to further de risk the process going forward because there are a whole bunch of lessons they've already learned about it.
• 47:23
  Chris Reichhelm: Um, and it's going to make the ultimate journey to 24/7 that much easier.
• 47:28
  Chris Reichhelm: There, you know, there's still risk.
• 47:30
  Chris Reichhelm: You're not questioning the fundamental scalability of it at that point.
• 47:34
  Chris Reichhelm: The risks are different.
• 47:37
  Rob Davies: Yeah.
• 47:38
  Rob Davies: And so this goes back to that conversation we had a little while ago about project risk.
• 47:42
  Chris Reichhelm: Yeah.
• 47:43
  Rob Davies: Um, we bought, you know, most of the production equipment from proven vendors with process guarantees.
• 47:52
  Rob Davies: And we managed the risk because the vendors were taking the process risk.
• 47:57
  Rob Davies: Um, the only place we brought risk was with our new technology.
• 48:01
  Rob Davies: And to the point you just made, we'd actually operated this at full scale production.
• 48:07
  Rob Davies: We had four different units in the battery center.
• 48:09
  Chris Reichhelm: Wow.
• 48:10
  Rob Davies: And so we felt we owned that risk and understood it and knew what we were getting into.
• 48:14
  Rob Davies: And so it gave us some confidence to say, all right, now's the right time to scale to a 24/7 operation.
• 48:20
  Chris Reichhelm: That's great.
• 48:21
  Chris Reichhelm: That's great.
• 48:22
  Chris Reichhelm: That's a well managed business.
• 48:24
  Chris Reichhelm: I have very much enjoyed our conversation today.
• 48:27
  Chris Reichhelm: Thank you so much for joining me.
• 48:30
  Rob Davies: I've loved it.
• 48:31
  Rob Davies: And it was great to share our story and our experience, and hopefully there was some insight in there for others to benefit from.
• 48:36
  Chris Reichhelm: I'm sure there will be.
• 48:37
  Chris Reichhelm: Thank you again.
• 48:39
  Chris Reichhelm: You've been listening to the Lab to Market Leadership podcast, brought to you by Deep Tech Leaders.
• 48:45
  Chris Reichhelm: This podcast has been produced by Beauxhaus.
• 48:48
  Chris Reichhelm: You can find out more about us on LinkedIn, Spotify, Apple, or wherever you get your podcasts.