The power of platforms in advanced materials
This story is brought to you by Antonio Castro Neto and Pierrick Bouffaron.
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Many startups that have materials science at the core of their technologies claim to be organized either as a platform gathering their main competencies (using an organizational point of view), or develop a breakthrough technology available to their customers (using a product-oriented approach). These platforms combine the knowledge, resources and strengths that help characterize and differentiate the company on the marketplace.
It should come as no surprise that the same thing happens for advanced materials. Just like in the biotech case, while technology can contribute to a materials science-based company’s overall competencies, technology platforms are a much more specific way to understand and take advantage of technology as a way to drive innovation. Therefore, the conceptualization of a platform requires ingredients that span the four categories of materials, processes, capabilities, and industrial applications, each requiring customized expertise and engagement in terms of technology and market maturation.
On the other side of the advanced materials spectrum, seasoned market leaders (e.g., Applied Materials, 3M, Bosch or Evonik) have long realized that consolidating their in-house technology platforms is a necessity. Leveraging them with a close ecosystem of partners and clients, platforms have become an attractive, straightforward and efficient way to ignite new businesses and scout the next wave of materials science innovation. Used as a tool to operationalize the concept of corporate “open innovation” — the paradigm that assumes firms build upon internal and external ideas and orchestrate internal and external resources and paths to market — and general productization, corporate-driven platforms have contributed to rejuvenate the materials science ecosystem capabilities, opening new partnerships channels, with the inherent side effect to institutionalize co-research, co-development and value creation in a more standardized way.
Obviously, both categories of players — startups versus corporates — neither bring the same value to the innovation table nor talk from the same standpoint. While corporates strategize around their mastery of current industrial applications and core capabilities (i.e., market pull) to explore new materials and processes, startups rather start from materials science and early-stage process discoveries (i.e., technology push) to tentatively mature and standardize ad-hoc processes, gather capabilities — both internally while scaling up and externally through partnerships — and address “low-hanging fruit” industrial applications on their path to markets.
It is important to face the hard truth that over the last two decades, advanced materials platforms have not been particularly productive when it comes to producing multiple products or supporting the integration of nanotechnologies into B2B value chains. Each effort to work on material integration and usage is often a low-throughput, bespoke process: due to nanomaterials complexity, strategies and solutions that work for a particular application are likely irrelevant for the next one.
As a16z rightly pointed out referring to biotech, another market driver adds to the picture, namely, when many materials science startups look for successful products as “golden eggs”, platforms have been broadly considered as the “geese”, most of which produce few (if any) of those precious “eggs”. Driven by their early-stage limited capabilities as well as the perceived necessity to come up with tangible assets for investors, startups end up being torn with the dilemma of why and how to spend resources feeding the “goose”. It is usually better to identify an asset that has a shot of being a “golden egg”. Therefore, startups and research institutions alike tend to starve their platforms in order to nurture a potential product: little effort, if any, is placed on earlier-stage capacity building or the platform itself. Naturally, when one “golden egg” is discovered, all players are happy to pat themselves on the back for their success. But in most cases, the science-driven productization efforts do not lead anywhere, and for many reasons (e.g., inconsistent value proposition, bad market timing, competition, execution challenges, etc.). Without a solid platform to pivot the technology, those efforts are particularly difficult to recycle in the same environment.
We would like to argue that the negative impacts of these product-first, narrow down, strategies have been massively overlooked from a go-to-market standpoint. When properly articulated and controlled, investing in the platform itself means benefits accrue and compound over time, translating into faster and cheaper improvements in concomitant advanced materials processes and products. Moreover, just as it happens for platforms in the digital realm, materials science-based platforms are the foundation on which many future applications can be built. Unsurprisingly, some entrepreneurs and analysts hastily draw comparisons to what digital platforms are, misunderstanding what is currently happening in materials science and, inevitably, tending to exacerbate the operational challenges of the model. However, advanced materials platforms have the capacity to aggregate know-how in powerful ways, looking more at execution speed and consolidation than hyper-scalability and networks effects.
Recently, “fertile geese” start emerging in the advanced materials space by realizing new opportunities. New kinds of platforms are driving the market from bespoke craftsmanship in nanotechnologies to industrialized advanced materials integration and development. They are built around powerful new breakthrough technologies such as nanoengineering and artificial intelligence, amplifying the efficiency of both modelling and engineering solutions. These platforms allow scientists and engineers to study and solve problems in materials science at unprecedented scale and detail, intervene on new applications in previously inconceivable ways, and enable us to engineer complex materials systems with specific functions. These new platforms will transform the industry, from small production, development and engineering to standardization and commoditization. They will change what is made, how it is made, and how the entire materials science industry is going to be structured in the coming decades.
AM2’s next-generation functionalization platforms — platforms that give us the ability to engineer bits of materials to create programmable particles, nanofibres and films — already enable us to decode complex industrial needs and solve scientific and engineering challenges against which researchers and industrialists have long been struggling. As pathfinders in this challenging but rewarding field of nanotechnologies, the AM2 team initiates an ambitious work that combines science, engineering, product, operations and entrepreneurial innovations to succeed.
The nature of the venture studio itself is paramount to articulate the horizontal infrastructure (i.e., the technology platforms and related capabilities) that is needed to become stronger over time, while engaging in a portfolio of carefully selected applications. These projects — i.e., the AM2 spin-outs to be — can follow either a vertically-integrated approach, a strategic partnership with best-in-class players, or a hybrid form of venturing. We believe that building a vertically-integrated stack to maximize productivity, assembling all the research, functionalization, integration and manufacturing capabilities to produce a complex formulation from start to finish (i.e., a factory to industrialize processes for all end products), is such a large endeavor that only a handful of ventures presenting strong technical and market fundamentals can follow this path.
By building AM2, we are learning hands-on the three key ingredients of successful frontier tech platforms:
1. Strengthen the scientific and engineering bases.
At its core, a successful platform approach is forged by the operationalization of transformative science and engineering, which is then synthesized in more generic platform building blocks, structure and processes. From ignition to maturity, advanced materials entrepreneurs are first to demonstrate both the criticality and demonstrability of their technology stack, as well as the breadth of applicability of the platform. At AM2, we decided to build upon ten years of applied research in understanding and manipulating two-dimensional materials in a large variety of environments.
2. Strategize and execute around a portfolio of opportunities.
The horizontal model is coming to the advanced materials field. Because most traditional new material integration are essentially bespoke efforts, selling components or generalized infrastructure across the entire industry is risky (i.e., too much customization efforts spread over a pipeline of customers). But, with the rise of programmable nanomaterials, the industry increasingly needs and is building components, processes, and interfaces that can be applied broadly. These modular components and tools can be swapped in and remixed across a wide range of applications.
3. Embrace compounding productivity.
Industrialized nanotechnology platforms enable new business models. If platforms are 3x or 10x more productive or can produce 3x or 10x better products, everything — from how we start projects, build companies, to how value creation if defined — is modified. The default mode for the materials science industry has often been a full-stack integration, i.e., build the framework to master the end product. Through AM2, we look at compounding the productivity of each part of the stack.
We are at the beginning of our journey. Join our incredible community building the future of advanced materials 🔥🤖
