Team:NU Kazakhstan/Entrepreneurship
Entrepreneurship
Entrepreneurship
Commercialization of our nanomaterials
Our 2018 iGEM project focused on sulfur waste bioremediation and we acquired nanomaterials as a byproduct. Later, we found out that these very nanomaterials have properties that resemble catalytic activities of platinum in Hydrogen Fuel Cells. After speaking with stakeholders, we noticed that our project idea was perceived very well and many encouraged the project to become a startup as it has a lot of entrepreneurial potential. Before we started to look into our project as a startup, we wanted to ensure that there was a need for our nanomaterials in the market.
After thorough research, we came to the conclusion that our project could indeed be implemented into an entrepreneurial venture. We noticed that the platinum reserves are depleting year by year and it will soon be used up in the industry. On top of this, platinum is expensive. As of 2017, 44% of global platinum reserves are used for automotive purposes of which the fuel cell industry takes up a significant amount of it. This is the primary reason we started to look into our project as a business. While we were not experienced in starting a commercial project, we went to the Astana Business Campus coaches who help technological projects to evolve into a business. They recommended us to enter their Incubation Program, which is a six months extensive incubation program for startups to become fully equipped with all the skills they will need. We were extremely fortunate to have entered this program that directed us to the right path in our entrepreneurial beginnings.
Without stopping there, we saw another great opportunity to become part of a Climate Launchpad competition that aims to promote green business ideas. One of our values was that our nanomaterials are not difficult to produce and do not produce as much greenhouse gases as the mining and refining of platinum does. This competition was an ideal platform to compete with other teams that also had great ideas to lower the carbon footprint. After three months of preparation for the National Finals, we became the winners with a chance to present our ideas at an international arena at the Global Grand Finals in Amsterdam, Netherlands in November 2019. We really wanted to fully experience the entrepreneurial ecosystem by entering the Green Tech competition where we got to pitch our idea in front of government representatives and investors. We received prize money and an opportunity to take part in an Investment Readiness Program (IRP) by Seedstars that will help to determine whether our startup is ready to have investors as it is not easy to find, to maintain, to sustain, and to satisfy the investors. Currently, we hope that we will be able to find investors at the end of the program during the Demo Day.
Below is a summary of the programs we took part in and what we have learned through these programs.
Without any knowledge in starting a business, we wanted to gain experience before we entered the market with our idea. These programs have jointly helped us to come to a level of our entrepreneurial journey where we can quantify our project, identify which information not to disclose, and with whom we can partner.
After these interactions, our assumptions about the fuel cell market were that Pt catalyst should be replaced without losing its efficiency and being too complex. The key insights we learned from General Motors, Hydrogenics, and Air Liquide was that catalysts made out of biomass are desired and that the solutions that are out there are not as cheap as our nanomaterials. These are the ‘pain’ points of our future customers and according to these, we were able to draw the values of our product. Along with the feedback of investors and company representatives, we found out that our product should provide the following values:
1) Reasonable price point
- Hydroplat is 30% cheaper than the existing platinum group metals (PGM). With our help, Toyota Mirai will be able to sell 1000+ more hydrogen cars starting from 2020.
2)High efficiency
- We proved that Hydroplat shows 20% more efficiency in the electrocatalytic activity of Oxygen Reduction Reaction (ORR) compared to platinum.
3)Easy manufacturing process
- Producing Hydroplat is relatively simple. Most of the production process is fully automated. Only two trained personnel are required to make nanomaterials from scratch.
4)Simple implementation into an existing production line
- We proved that the simple replacement of platinum in the Ultrasonic Spray Coating Technique with nanomaterials is enough and the production line will not be complicated.
5)Environmentally friendly
- According to our calculations, cutting down platinum usage by only 140 kg will result in 4 tons less of carbon dioxide (CO2) emission. On a bigger scale, if we switch to hydrogen cars which only produces water, we would decrease the global carbon emissions by approximately 40% per year.
Market and Competition Analysis
The global market for fuel cells is valued at $5.24 billion in 2019 and expected to grow at a compound annual growth rate (CAGR) of 15.7%. This growth is in compliance with the demand for advancement in fuel cell technology that could potentially outcompete conventional electric vehicles (EV) like Tesla. For our product to successfully enter the market, we need to maintain a strong edge in innovation and demonstrate the value of our product. The market share of our potential customers for the first year is 10% as we would like to mainly enter the market in Germany because as we researched, the fuel cell technology is advancing steadily and Germany has National Innovation Systems in place to increase the fuel cell market.
SWOT Analysis
Strengths:
1. Strong intellectual property strategy that will protect and provide exclusionary rights of the technology
2. A novel and innovative approach that consumes minimum amount of water and energy resources
3. The renewable product catalyst made out of biomass while the platinum resources in the world are finite
4. Wide-range product applications in different industries
5. Almost 30% decrease in the price of the product over PGMs
Weakness:
1. The limitation of testing the nanomaterials on fuel-cells
2. Lack of secure funding beyond the prototyping phase
3. Distant geographical location from beachhead market and the difficulties with resource accession and product delivery
4. Possible resistance by potential customers to a new synthetic biology approach
5. Competition with the PGM producing companies
Opportunities:
1. The growing interest in potential alternatives that could replace the platinum
2. Increase in the demand for products in which the platinum could be replaced
3. International connections with companies for future industrial testing and launch of the product
4. Finiteness in the platinum resources that need to be replaced
Threats:
1. Competition from established industry giants such as Anglo-American Platinum, Lonmin company and Impala Platinum
2. Lack of industrial trials that confirm the applications
- Competitor landscape
Anglo-American Platinum, Lonmin company, and Impala platinum are the world’s leading primary producers of Platinum Group Metals (PGMs). These companies mine, concentrate, smelt, refine and market PGM products that have autocatalytic, industrial, medical and jewellery applications. Our product’s advantage over PGM producers is the longer durability with almost 50% higher efficiency in hydrogen fuel cells. Also, the carbon monoxide and methanol tolerance should also be mentioned, as their abnormal presence in fuel cells greatly affects the efficiency of the catalytic material. The cost of our product is more attractive than PGMs, which can certainly undervalue our competitors.
There are other catalysts that exist as scientists and R&D of leading hydrogen fuel companies are tirelessly trying to decrease the Pt catalyst in hydrogen fuel cells with the use of other alternatives. However, even these alternative ways are not efficient and cheap. Some of these include using less platinum, using Pd or platinum cobalt.
- Potential markets
Our nanomaterial is used as a catalyst in PEMFC. However, due to its high methanol tolerance, it can be used in Direct methanol Fuel Cell. Besides fuel cells, it potentially can be used in lithium-sulfate batteries, and it is testing by National Institute of Batteries. Therefore, our nanomaterial can be used in various fields:
1. Portable fuel cell, used as backup power in telecommunication or portable vehicles,
2. Fuel cells, PEMFC in hydrogen cars and DMFC in methanol cells
3. Devices with lithium-sulfur batteries, drones, phones, planes and laptops
4. Energy generators, our nanomaterial can be used in the off-grid power system and Power plants which produces energy for home.
Value proposition & technical innovation
- Customer segments
The primary consumers of our product are fuel-cell companies that produce proton exchange fuel cells. Indirectly, these fuel cells, that have all the values described below over conventionally used platinum group metals, will be purchased by hydrogen vehicles, stationary power generators, and portable back-up power manufacturers.
- Channels of distribution
Our end customers are fuel-cell manufacturers. We are able to reach fuel-cell manufacturers by attracting investors through attending conferences and participating in incubator and accelerator programs that promote alternative energy. Further, since, receivables are to be purchased by companies in different parts of the World, it is more convenient for nanomaterials to be delivered through logistics companies that will not only ensure a safe delivery of the biomass for long distances but also carry out legal nuances when transporting through the borders.
- Customer relationships
Once the fuel-cell companies become our customers, we can further enhance the technique for nanomaterial production by conducting Research and Technological Development together with these companies, thus allowing them to acquire the intellectual property for more advanced technology. At the same time, we provide these companies with green reputation that have positive impact on the environment.
- Key resources
The key resources that are needed to sustain and support our business are biochem laboratory with types of equipment and apparatus that will be used to produce and test the product. Also, the patent and the qualified employees are needed for the production of the catalyst.
- Key activities
Our key activities will be to continue further on the research and development work of the project, to test the catalytic nanomaterial in hydrogen fuel cells and after the positive results to start the industrial production and market of the product to potential customers.
- Key partnerships
We will partner with laboratories that have all the needed machinery for the beginning of our journey before investing huge amounts on infrastructure. We can also partner with oil companies that generate hydrogen sulfide as a waste. We will be able to use the waste as a resource, while oil companies will not pay environmental taxes for those wastes. Another partner is National Institute of Battery that tests our nanomaterial’s effectiveness on lithium-sulfur batteries. We provide them the testing material, while we, as a result, find out the physical and chemical properties of the biomass. In the case of positive results, we open a new road to another market.
- Cost structure
The initial cost of the product will include materials costs, labour costs and total manufacturing costs along with expenses for intellectual property and taxes.
- Revenue stream
Our source of revenue is production of nanomaterials. After a year, we would like to earn profit license-based. Partnering fuel-cell companies will be permitted to use our patented innovative technology in exchange for licensing fees.
We have also included our pitch deck and business plan for HydroPlat.