Archive for June, 2010
In my ongoing work on analyzing the intellectual property landscape in biofuels, one of the most impressive companies I’ve run across is Amyris, a renewable products company whose clever use of synthetic biology goes far beyond biofuels. Amyris was founded by Kinkead Reiling, Neil Renninger, and Jack D. Newman who met at Berkeley and founded Amyris in 2003, headquartered in Emeryville, California. With a grant from the Bill & Melinda Gates Foundation, they first developed their technology under a non-profit initiative to provide a reliable and affordable source of artemisinin, an anti-malarial therapeutic. It was viewed as a long-shot, but they found success that paved the way for the growth of the company into other areas. They are now developing new microbial strains that can produce other useful molecules from renewable feedstocks. This industrial synthetic biology platform is providing alternatives to a broad range of petroleum-sourced products. he extremely useful molecule farnesene is an important part of their business. It provides a compound that can be used to produce flavors, perfumes, detergents, cosmetics, biodiesel, and other products.
This week Amyris created a stir by announcing a record number of deals and partnerships for a single week (a record among bioenergy companies, according to Biofuels Digest). These partnerships include P&G, Total, Soliance, Cosan, M&G Finanziaria, and Shell:
Amyris has taken it up a notch with a series of stunners surrounding its synthetic farsenene, which it has named Biofene – the first product that Amyris is seeking to produce at commercial scale.
Beyond its success this week with Biofene announcements, which are the basis for the P&G, M&G and Soliance partnerships — there are the broader arrangements with Cosan to develop a platform in renewable chemicals, and the equity agreement with Total that will provide needed capital as well as a broader platform for Amyris’s expansion into hydrocarbon fuels.
The mysterious agreement with Shell, regarding diesel, is one to watch. The decidedly vague disclosure was buried in Amyris’ amended S-1A registration statement, but not otherwise mentioned in a flurry of press releases from the company as it promotes its expansion in this pre-IPO environment. Shell Western Trading & Supply is one of 17 Shell trading companies that buy and sell to customers within and outside of Shell.
This news shows an interesting example of companies forming partnerships with an innovative start-up with great technology and apparently highly valuable IP. According to my Patbase search, Amyris has 21 patent families, quite a large number for such a young company. They clearly have been active and aggressive in pursuing patent protection, and those patents are critical for the meaningful partnerships they are now forming. It’s a great unfolding story of open innovation and technology transfer.
The story extends beyond the US. They have operations in Brazil, for example, which is one of the world’s hotbeds for bioenergy, bioproducts, and collaborative innovation.
Further information comes from today’s article, “Amyris: farnesene and the pursuit of value, valuations, validation and vroom,” also from Biofuels Digest.
Lucky breaks are often behind some of the surprises in science that lead to successful innovation. This is especially true when chemical compounds are being studied. The stories of how new beneficial uses are discovered sometimes seem like pure luck. Take the discovery of sucralose, for example. This potent artificial sweetener, now used in hundreds of products, owes its market success to a potentially dangerous misunderstanding. As the Wikipedia article on sucralose reports:
Sucralose was discovered in 1976 by scientists from Tate & Lyle, working with researchers Leslie Hough and Shashikant Phadnis at Queen Elizabeth College (now part of King’s College London). On a late-summer day, Phadnis was told to test the powder. Phadnis thought that Hough asked him to taste it, so he did. He found the compound to be exceptionally sweet, as sucralose is 600 times as sweet as sucrose.
One scientist said “test” but the other heard “taste.” That’s the kind of communication gap that can get you killed quickly in a chemical lab, but the taster survived and recognized a powerful artificial sweetener was at hand.
The story is a reminder that there may be unexpected beneficial applications of many materials around us, and that it’s good to always be wondering about overlooked properties and applications that could open new product opportunities. With a little luck, sometimes innovation is as close as the tip of our tongue–but don’t go around tasting unknown chemicals.
The problem in large organizations, and the US federal government is pretty much the world’s largest, is that numerous entities have their own turf and their own advancement in mind, and without special efforts being taken will naturally work in ways that cause conflict and delay. Leaders must carefully work to align these interests and incentives toward organizational objectives, but this can be almost impossible when an organization gets out of control. Adding a new committee or bureaucracy in addition to everything else will rarely be the most effective path forward. Meanwhile, those who may have the answer and want to bring their expertise to the table find themselves discouraged, worn down, ignored, and ultimately punished for their passion to innovate and help. Welcome to organizational innovation fatigue, and welcome to the Gulf Coast disaster.
Several voices have discussed the need for innovation in dealing with the disastrous oil leak in the Gulf Coast. There are so many intriguing opportunities for technology–oil absorbent materials, new chemistries for dispersing or attacking the oil, controlled burnoffs, skimming and oil collection systems, barrier technologies to keep the oil away, materials that coagulate oil, and a host of proposed technical solutions for addressing the root cause and stopping the leak. Many of the proposals should be considered and tried. This is not the time for bureaucracy. This is not the time for the government to be shutting down efforts with its bureaucracy. If the Coast Guard is worried about inadequate fire extinguishers, round up a batch and take them over to the relief effort to help, not hinder the State of Louisiana as it tries to protect itself. But what the Coast Guard did in this case is akin to what happens thousands of times each day in companies and government around the world, contributing to the innovation fatigue that stymies much needed efforts at innovation and progress.There are some bright spots of innovation amidst all this mess. Kevin Costner of Hollywood fame has been developing a company with patented technologies for cleaning oil-contaminated water. Ocean Therapy Solutions (http://ots.org) represents a case of successful technology transfer that began in the US Dept. of Energy and some national labs. The technology has now emerged as clever centrifugal separators that split a contaminated stream into highly separated water and oil-rich streams. Portable units mounted on boats can go into contaminated waters and process large quantities of ocean water, recovering oil and returning much cleaner water to the ocean. Their website includes a couple of interesting videos, including one of Kevin testifying before Congress. The system has received relatively little interest for the past decade and the factory has been dormant, but now awareness is rapidly increasing and BP is deploying some of these units for use in the Gulf. A single unit can process 200 gallons per minute or more.
Kudos to Kevin and his team! He certainly has an advantage with his name recognition and extensive networks–without that, he may have been viewed as just another voice in the wind claiming to have something. There are others with technologies and potential solutions. May they also find their way to make a difference. May all the innovation fatigue factors remain far from Kevin Costner and all others seeking to bring something new to help us fix the Gulf Coast disaster.
Our idea was simply to form a microscopic mold as a template, fill it with metal, and remove part of the template leaving individual metal hairs surrounded by an insulator. Then, we could use any number of methods to coat the hairs and form solar cells. At the end of the day, its not too far technically removed from fabricating a micro scale Popsicle using a semiconductor foundry.
When our technical work started in earnest, we thought we might have been a bit deluded to think we scooped the big boys of the world (GE, BP, Sharpe). Off to my basement I went. I worked through the physics. I looked through hundreds of journal articles. I read through over 3000 patent abstracts. All the while, simply using Google, the US PTO, and the WIPO search engines. While I prefer using search engines like Aureka, it really isn’t to bad doing a search manually either. As long as you are short on money and don’t mind working like a mad man, it’s not a problem. I was worried that I must have missed something so I double-checked my search against an IP search using artificial intelligence. No significant prior art came up.
It become evident that geometry of the nano scale hairs was perfect to create a super solar cell. The solar cells are probably coated with what are referred to as nano dots or at least coatings so thin that phenomena that cause electrical losses due to excessive thickness disappeared. The cells are also super light absorbent and conserve rare materials. This was not lost on the theoreticians. However, their further belief was that semiconductor equipment is cost prohibitive for the use in solar cells, which is correct for machines found in state-of-the-art foundries. What they missed was that older, more primitive equipment was sufficient to make the nano-wire solar cell cost effectively. General George Patton once said, “If we’re all thinking the same thing, someone isn’t thinking.” In retrospect, groupthink in the solar industry left us a brief crack of time, which we used to patent and develop the technology. In the years that followed, we learned a lot of work had started a short time after ours.
The intellectual property needed to be done flawlessly. In my mind, that meant that I should draft the applications myself. However, the group voted to go with a big name national legal firm. Since we were bootstrapping the enterprise, we were starting with a provisional patent application. To save on legal fees, I drafted the application. Next, I spent the two weeks bringing an entry-level patent attorney up to speed on our technology, and then she let us know that the application was excellent and she supported filing it. No added claims. No significant improvements to the specification. Only a big “atta boy” and an invoice for $15,000. I think that when you work with a large legal firm and you are a fledgling startup, it is very unlikely that you will get the “A” level support. In the end, I suppose I did what I set out to do; we were just poorer for the experience. My only other qualm with our process is that our team viewed IP development as an ancillary activity. Some people just don’t get the value of IP until it is too late. Eventually excellent counsel was located through a recommendation of a former colleague, and the final application was done well.
Now all we needed was money. We chose two avenues, grants for academic research and angel money. Neither path is easy, but we managed to get several grants. The grants were nice to keep members of the team solvent, but they can also be a trap where too much focus is on writing papers. We found this to be the case, and eventually refocused fund raising on angel investors. That is not easy either. To get angel money, you need to have a good idea, and you need to have someone they know on your team. People who are trusted by angel investors or venture capitalists are not necessarily people that can be trusted. I cannot over emphasize how difficult it is to find a good person that meets that criterion. Mark Twain once said “A man who carries a cat by the tail learns something he can learn in no other way.” You cannot do too much background work. Fund raising last year was not fun. A Nobel Prize winner, a Stanford electrical engineer who graduated top his class in two and a half years, and few dozen other technical leaders, vetted us out. It was our experience that the complexity of the idea got lukewarm responses or ridicule from VC’s with little technical depth, but fantastic responses from investors with high levels of technical skill.
As grants and angel money trickled in, I frantically yet frugally raced to develop a prototype always working to stay one step ahead of the money. One problem was that there was no other technical support. Another problem was that manually performing operations that are normally automated around the clock is challenging. After many months of grueling work, it was gratifying to find that everything worked as I thought it would. Finally, individual investors gave us the money we needed to enter into long-term process development. The project has been moving forward according to plan. However, my personal and business priorities were not a match with the new management of the company, and the company no longer employs me. I am back in the consumer products business enjoying a brisk consulting business. This type of venture is not for anyone with a weak stomach for long hours, high risk, or high stress. However, if you are willing to pay the price and can work with trustworthy people, it can be the most satisfying and financially rewarding adventure in your career.
My recent visit to three beautiful regions of Brazil included opportunities to learn more about the economic climate and the future of innovation. Entrepreneurial opportunities are tremendous for innovative and bold Brazilians, in spite of the challenges that come with extremely expensive capital, high taxation, and occasional bureaucratic barriers. Brazil continues rising rapidly, on its way to be one of the world’s great superpowers. The spirit of Brazil was contagious!
The opportunities from the agricultural potential of Brazil are mind-boggling. The biodiversity of the few parts I saw was overwhelming, and that was only a minute sampling. By strengthening the airport system in Brazil, there are many opportunities to move away from supplying bulk commodities like fiber and coffee to providing value-added consumer products shipped directly to consumer markets. A nationwide effort to enhance transportation is needed (and is underway). One product area where I eagerly await further progress is in the field of beverages. For example, all over Brazil there are drinks based on the guarana berry from the Amazon, including the wildly popular Antarctica brand carbonated beverage. These are more popular than cola beverages and frankly, they taste much better. This one of many Brazilian flavors waiting to emerge into the US market.
Brazilian businesses have also evolved a variety of interesting business models, including efficient methods for managing buffets where you pay by the kilo. I would welcome that approach here.
The business area that most impressed me for its innovation was in the field of education, and distance education is particular. I had the privilege of meeting with the CEO of POSEAD, a remarkable company offering distance learning service to Spanish and Portuguese speakers. They have drawn upon 40 years of experience in a non-profit educational organization, CETEB, along with many years of commercial experience, to create a rapidly growing business that solves some of the real problems of education and training in emerging nations, where the cost of commuting to a school or training center may exceed monthly incomes. They have developed advanced diagnostics and delivery systems to really understand what a student is doing, what they need, and how to get them to move forward. There are so many mistakes that can be made by newcomers in this area, especially in meeting the needs of Spanish and Portuguese speakers, but they’ve figured out how to avoid them and have created a remarkable efficiency in their systems that results in extremely low cost.
Some of the innovation in education goes back to a remarkable woman, Rosa Pessina, who long ago recognized that the pressure to build more schools to accommodate burgeoning classes in the earlier grades was treating a symptom, not the cause of the problem. Her analysis showed that class sizes were suffering because too many students were failing to advance in school, resulting in low graduation rates and high class sizes as kids went back through the same grade more than once. She then developed programs for accelerated learning to help these kids quickly get back to the right grade for their age, making the students feel better about the class they were in and enhancing motivation. This was the beginning of the non-profit organization CETEB, and those who participate in its accelerated learning programs have a 94% success rate, if I remember correctly–an extremely high percentage that go on to graduate. CETEB’s services include distance learning tools to help Portuguese and Spanish speakers. There is a huge opportunity here for the United States, where we have the children of many Spanish-speaking immigrants doing poorly in the schools. If they do not gain an education, the risk for ongoing poverty and crime is much higher. By accelerating their progress and helping them gain education at low cost, remarkable social good could be achieved here in the U.S. Governors, CETEB awaits your call!
There are layers of innovation in other areas in both CETEB and POSEAD, including how they quality and prepare content, how they form alliances, how they manage the challenges of certification and regulatory burdens, and in general how they identify and meet the needs of students and communities. There are brilliant minds at work here, and I feel that it’s time for US schools, companies, and governments to explore collaborative efforts. I’d be happy to help make a connection.