A nascent and evolving understanding (+questions) on the nature of businesses that will be built around biotechnology.
I’ve been attempting to wrap my head around the world of biotechnology, specifically with a startup lens. Let’s not get into why that makes sense (for me), but into what some initial thoughts and theses look like.
The end user lies somewhere in the spectrum of knowing she is consuming something built on biotech or not knowing (or caring) about that fact.
E.g. A company providing data storage solutions, relying on Helixworks for manufacturing the synthetic DNA (in due course) vs. e purchasing Memphis Meats (all I care to know is no animals died — the rest is meh).
Either way — let’s just say there is one end entity which is providing the product/service to me as a user — managing branding, distribution, consumer education and all of that.
A step backwards into the value chain — two things happen here.
A) Enabling products: An entity doing research ground up to come up with tech that they’re subsequently using for _ of potential _ use cases.
Technologies/products that are used for development of the end products ( Helixworks, Twist, Thermo-Fisher etc.), i.e. these are basically raw material providers to someone who will make something further.
Synthetic DNA is an example (a common one) of a raw material for this industry (SynBio).
Helixworks for example, has come up with entirely new tech and automation that they’ve been working on, to synthesise DNA.
B) Enabled products: An entity building upon existing enabling tech for a specific use case
These are the end products that come from genetically engineering an organism (why we do this? To engineer an organism to synthesise proteins , fibers etc. which one can subsequently use).
E.g. Perfect Day and Memphis Meats are building upon tech that is out there to some extent, for their specific use cases, by genetically modifying organisms to produce engineered milk / meat respectively.
Another company, Chinova for instance, is building ground up a custom built antimicrobials — one use case being natural preservative for F&B. But they’re between A & B, because antimicrobial is an end product in itself as well.
I saw a bit of a pattern in the two options when I also look to checking out more companies.
Companies focusing on building a B2C product, with the brand being critical, were typically in category B, and those building a B2B product or service were typically in category A.
Branding and distribution are critical to the success of any B2C business; and therein possibly the attempt to build on top of technology that has already been taken forward.
The B2B space was seemingly more about companies picking a specific use case and solving for it from scratch (or from more of a starting point per se).
In more established industries — automobile, energy, consumer goods, electronics (?), I think this works a little opposite. There are major B2C brands in each of them already, and branding and distribution is either an ongoing battle, or a solved problem — and the companies focus on R&D to create unique products beyond the marketing gimmicks. E.g. Tesla, Patanjali, Athlos etc.
But in the B2B space — there’s less of a focus on R&D and building technology for these products, but more of continuing to supply the existing tech products with minor incremental innovation.
This is NOT to say that for biotech companies in the B2B space, brand isn’t an important lever. But it’s much more about the product being genuinely one of the best, and having a strong NPS (net promoter score) given it’s a close knit ecosystem for biotech. It’s less about the positioning and the story but more about the product.
For a B2C product I posit it’s not quite that (even though we wish it were ?).
In starting to dive into this, I have also come to believe that there isn’t an aspect of our life today on which, X decades from now, we won’t see a definite impact of biotech.
Food, fuels, plastics, clothes, cosmetics, storage, … I could go on.
What is this informed with? Looking through a dozen or more biotech businesses and speaking to say half a dozen of them over longer periods of time.
I’m sure I have a long way to go in developing clarity and refining my understanding — I’d love to know your thoughts, comments and more.
Thanks to Eshna Gogia who has helped and continues to help me in unravelling this world and its nuances.
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