Technical Versus Commercial Success

Both are dependent on each other

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This concept of technical success versus commercial success has been on my mind lately for some reason. When you are a technical person who only thinks about technical things then this is often the only success you care about. Commercial success is the backbone of western society and combining both technical innovation with commercialization is how we get modern progress, but you cannot get one without the other and where does it all start?

When you are an academic in a lab the concept of success is straight forward. The below examples are somewhat simplified.

If you are in a synthetic lab did you make the thing you wanted to make and did it work the way you had hypothesized? Success.

If you are in an analytical lab did you develop a technique or method to successfully observe and/or separate the thing you wanted? Success.

If you are a synthetic biology lab did your metabolic engineering strategy yield the product you wanted? Success.

This technical success usually involves more experiments, testing, and proving out some basic underlying principle that you can turn into a paper and publish in a peer reviewed paper. You probably used the scientific method. If you do this enough as an independent researcher then institutions tend to reward you with a PhD or if you are a post-doc you get nickles and a bag of peanuts (kinda joking, but not really).

Let’s say you graduate or are interested in leaving academia and you go work for some company where their main goal is to: make and sell products using chemistry as the science engine. You might a bunch of seemingly ridiculous terms such as:

1. Stakeholders

2. Shareholders

3. Cross-Functional

4. Return On Invested Capital

5. Regulatory Compliance

6. EBITDA

7. FMEA

8. Six Sigma

9. I could go on, but in the interest of time…

All of these terms are important and these people, tools, and concepts will help drive your technical success to commercial success. Let’s frame it from the view of a new technical person in a few steps that has no idea what they are doing (me about 10 years ago):

1. Company gives you money to make stuff they want you to make in a lab

2. You give that stuff to your coworkers

3. Coworkers take that stuff to customers and they either 👍 or 👎

4. You either work on it till 👍 or your company decides 👎

5. Some chemical engineers scale it up

6. $$$ in the bank. Rise + Repeat

The simplistic view above doesn’t take into account time, cost, or complying to regulations. In my opinion this is what caused Zymergen’s ultimate implosion and the torching of billions of dollars. Let’s start from what a CEO might want to tell their board and work our way backwards on how to get there. Some of these things can happen slightly out of order, but you should get the general feel for a B2B specialty chemical product development process. Once again this is simplified.

1. Successful sales of $1 million dollars in the first year of product launch with 40% margins!

2. The customer got their product in specification, on time, and in full all year

3. Manufacturing was able to manufacture the product and meet internal specifications all year

4. Customer successfully finds value in product after a year of formulation and testing at lab and production scale

5. Samples sent to customers

6. Sales and Marketing team engage customers who request samples

7. Regulatory approval gained to sell product

8. Successful scale-up with commercial sized equipment

9. Successful scale-up with pilot sized equipment

10. Quality plan and scale-up process starts

11. Apply for regulatory approval

12. Technical success in the lab

13. Technical team hires some fresh out of school scientist/engineer for the project

14. Sales and marketing team supply project constraints and timeline to technical team

15. The marketing team sees a technical problem their technology could fix and provide; their customers tell them they want X problem fixed

16. The company allocates money to fund the product team to generate growth

17. The company captures profit from sales of existing products that were developed in the past

This 17 stage story ends where it started and thus we have a chicken and egg problem, but in this situation we know that there is no funding without a hint of technical success and there is often no hint of technical success without the government providing funding for academic research. Is this a long winded way of saying the government drives innovation through what is often derided as “pointless,” but if you’ve ever applied for grants then you probably feel this:

Government Funding Is The Way

My graduate education was mostly fueled by teaching undergrads how to recrystallize aspirin and do simple distillations, but there was also some National Science Foundation (NSF) funding that played a role. Without government research grants I probably wouldn’t have a PhD and I probably wouldn’t be writing this newsletter. Much of the stuff you rely on today was likely a product of some scientist or engineer finding technical success in a lab and their educations were likely funded by taxpayer money.

In 2023 the National Science Foundation will have about $10.5 billion to give out as grants to fund basic and applied science research.

It appears Meta will lose about $13 billion in trying to get us to all spend time in the virtual reality (boring).

Amazon spent about $10 billion on Alexa this year alone.

I’m having trouble finding additional $10 billion dollar failures right now in our modern tech era right now, but my point should hopefully be clear. What would be possible if all this money went into deeper tech areas as opposed to getting us to spend our money on virtual stuff or telling Alexa to buy more toilet paper?

You can complain about the US Government all you want, but it’s why you can do shit on the internet, watch TV for hours and hours, and not die of diseases due to vaccines.

Life is so rich.

Tony