Engaging with material innovators
Biomaterial innovation is still in its infancy
In most instances biomaterial innovation is still in its infancy.
This ‘next generation’ of materials will continue to evolve and improve over the next several decades.
We’re currently working with the 1st generation of biomaterials.
Over-hyped and under-delivering?
We are, at most,10-15 years into the development of new biomaterial innovation. The majority of biomaterial startups have appeared in just the last 5 years. Very few products are on the market in 2023 and of those, few are scaled and priced for mass adoption.
Claims of over-hype and under-delivery are not unfounded. Let’s look at the forces behind why that may be true.
In the last 5-8 years, sustainability and reducing impacts has gone from being a background topic, to top of mind for many fashion, sport and luxury brands around the world. Consumers are pushing brands to do better, and brands are evaluating where changes need to be made and seeking alternatives to existing materials.
Biomaterials, some of which are manufactured in highly novel ways using living organisms such as microbes, provide the perfect attention-grabbing headlines or ‘click-bait’. Nuance that captures the many varied technological approaches and complexities is often lost. In a bid to cover the latest coolest sounding product, journalists often fall victim of conflating different types of innovation. Frequently a graduate student’s ‘speculative’ project is featured alongside a biotech company that has raised hundreds of millions of dollars. No wonder people are confused.
Most startups will be looking to venture capital (VC) at some point and are required to demonstrate the market opportunity and early market traction. Investors want to see that the industry is listening and ready to either co-invest or sign off-take agreements. The media is seen as a key tool in garnering industry exposure and attracting potential brand partners.
Many founders themselves underestimate how long it will take to develop and scale their technologies. Time to market is often based on an educated guess, in many cases by people who have never worked in the industry they are building for. Additionally, VCs have typically rewarded bullish founders over prudent ones when it comes to investment.
Unfortunately, the effect of over-hype and under-delivery has impacts in multiple dimensions:
• Frustration and mistrust on the part of brands
• Fear and uncertainty on the part of investors
• Tougher fundraising climate for newer startups
The biomaterials innovation space is now experiencing a necessary adjustment. Startup valuations are less inflated and some recent funding rounds have even been down rounds.
Understanding innovator sophistication
As discussed in the media section above, all material innovation is not created equal. One area in which frustration occurs is in not understanding the real stage of development and potential for commercial scale.
In order to understand the potential for a technology to work and scale it helps to examine the following:
Who is the innovator - how likely are they to succeed?
What is the innovation - how novel or complex is it?
It may seem obvious but all too often we are not comparing ‘apples with apples’. Creating a convincing sheet of biomaterial is not that difficult, which is why you’ll find so many student projects in this space. However student projects are not companies, some are never intended to be a company, and those that do intend to be a company usually face a steep road ahead. Even amongst student projects, science students and design students bring very different skill sets.
Design students excel at presentation skills and storytelling often creating compelling prototypes. Science students may have solved some key technical challenges but created dismal samples. Which would you invest in?
CONSIDER BELOW:
Spot the student project:
(TômTex)
(Spiber)
(Scarlett Yang)
(Ecovative)
Looking for a balance of startup skills
Industry experience
At least one technical person who comes from the target industry ideally with skills in product development, commercialization and scaling.
Science
A scientific or technical leader with deep expertise in the underlying science.
Creative / Product
Someone who understands the target market from a material and product design and manufacturing perspective.
Business
Finance and business skills to power fundraising and commercial strategy.
The next most important factor is looking at how the team is weighted in terms of influence. If science leads but doesn’t understand the market requirements the team is not set up for success. If business leads but doesn’t understand the complexity of remaining technical challenges partnerships will likely not be best fit. And so on. The ideal situation is balanced across each perspective to achieve a high-performing team.
Teams should also look to leveraging the surrounding ecosystem. For example, non-dilutive funding from government grants, finding technical partners to support product development and scaling (such as tanneries), as well as ensuring advisory boards include expertise in legal and ESG.
Understanding innovation stage
Don’t confuse startups with suppliers
A key issue for brands and potential supply chain partners is understanding how to work with biomaterial innovators. These are not yet supplier relationships. Treating startups like suppliers only results in frustration all round.
Startups, by definition, are not yet producing a finished product at commercial volumes.
It may in fact take many more years before a convincing sheet of material or yarn turns into a viable scaled technology that a brand can afford and implement in their supply chain.
It is not unusual for material innovators to go through various iterations and ‘pivots’ in their technologies, feedstocks, applications and teams.
One example is Modern Meadow:
The company was founded to grow meat and leather without animals. Early on the meat application was spun out to focus on the leather alternative. The material technology has pivoted 3 times:
- Technology 1 was tissue engineering, using animal skin cells to grow a collagen sheet material in the lab
- Technology 2 was cell engineering and fermentation to produce collagen (biofabrication) to be formed with a textile into a material
- Technology 3 uses materials science and chemistry to combine commercially available soy protein, mixed with binders such as biobased PU
Technology readiness level (TRL)
Technology readiness level is a useful tool for both understanding the development stage of each innovator and for easier comparison between companies. TRLs were developed by NASA to explain to stakeholders how mature a technology is. Other industries have subsequently adopted and tailored TRLs as an indicator of progress.
We have further modified the TRL table in our previous biomaterials industry report* to better adapt it for material innovation. We have also added a column to specifically detail what to expect from the innovator at each stage.
Mushroom Vegan Leather Made With Mycelium: Will Shoppers Care?. 2022. Bloomberg
Adidas unveils Stan Smith Mylo trainers made from mycelium leather. 2021. Dezeen
Why Hermès, Famed for Its Leather, Is Rolling Out a Travel Bag Made From Mushrooms. 2021. Robb Report
Technology Readiness Level Definitions. Retrieved 17th April 2023. NASA
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