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In the 20th century, corporate powerhouses like Bell Labs and DuPont Central Research funded R&D from their balance sheets, creating a clear path for postdoctoral scientists to innovate beyond their university research. In 2024, with the decay of corporate laboratories, graduates are taking the commercial start-up route more and more. C&EN, business reporter Matt Blois discusses several such start-ups, exploring how the founders are making the transition from PhD to CEO and mapping the various routes they’ve taken to secure funding to continue their research.
C&EN Uncovered, a project from C&EN’s podcast, Stereo Chemistry, offers a deeper look at subjects from recent stories. Check out Matt’s story on how PhDs are learning to become CEOs at cenm.ag/chementrepreneurs.
Cover photo: Laura Stoy inside Rivalia Lab
Subscribe to Stereo Chemistry now on Apple Podcasts, Spotify, or wherever you listen to podcasts.
Credits
Executive producer: David Anderson
Host: Craig Bettenhausen
Reporter: Matt Blois
Audio editor: Ted Woods
Copyeditor: Bran Vickers
Episode artwork: Jim Prisching
Music: “Hot Chocolate,” by Aves
Contact Stereo Chemistry: Contact us on social media at @cenmag or email cenfeedback@acs.org.
The following is a transcript of the episode. Interviews have been edited for length and clarity.
Craig Bettenhausen: Welcome to C&EN Uncovered. I’m Craig Bettenhausen. C&EN Uncovered is a podcast series from Stereo Chemistry. In each episode, we’ll take another look at a recent cover story in Chemical & Engineering News and hear from C&EN reporters about striking moments from their reporting, their biggest takeaways, and what got left on the cutting-room floor. In this episode, we’re talking about making the jump from academia to the C-suite. In the 20th century, corporate powerhouses like Bell Labs and DuPont Central Research funded R&D from their balance sheets, creating a clear path for postdoc scientists to innovate beyond their university research. In 2024, with the decay of corporate labs, graduates are taking the commercial start-up route more and more. In a story that appeared in the Aug. 19 print issue of C&EN, today’s guest looked at several such start-ups, how the founders are making the transition from PhD to CEO, and the various routes they’ve taken to secure funding to continue their research. We’ll put a link to the story in today’s show notes. I’m here with C&EN business reporter Matt Blois, who wrote the article. Hey, Matt.
Matt Blois: Hi, Craig.
Craig: So, Matt, for anyone that hasn’t yet had a chance to read the article, can you give a brief recap of what it’s about?
Matt: Yeah, so like you said, it’s kind of looking at this idea of people who take a technology that they developed in either, like, a PhD or a postdoc, and then instead of going on to, like, a big company or going on to try and get a job at a university, they take their technology and they found a start-up, and then they’ll become the CEO of that start-up. And so the way I told the story is I really followed three specific people who were CEOs of early-stage start-ups based on a technology that they worked on or that they developed during a PhD or postdoc. And I started talking to them about late last year, and I kind of stuck with them for, I think, about 6–8 months and just checked in with them every couple months to see what was going on and just get a sense of what that early stage is like, and kind of what their motivations were, how they were making this transformation from scientist to CEO, and then trying to just, sort of, capture that whole journey.
Craig: How did you pick who to follow?
Matt: I wanted to find people who were willing to talk to me for a long time, you know, because that was the thing I wanted to do, so I wanted to get a really honest look at this. Because it’s a really tough journey. And so, you know, I give a lot of credit to the three people that I talked to, which is Laura Stoy, Sudharsan Dwaraknath, and Andrew Wang. I talked to them early on and said, “Hey, I want to stick with you for a while, like, I want to hear what it’s really like. I want you to be candid with me.” And they were really great about that. And so that was kind of what I was looking for, is, you know, kind of probing to see, you know, are you gonna stick with me for months? Are you gonna be willing to have multiple conversations? I’m gonna take up a lot of your time, and are you gonna, you know, be willing to sort of tell me the truth about what’s happening, not just sort of give me the glossy press release version? So I feel like they did a really good job of that, and it was fun to talk to them.
Craig: Yeah, this trend that we end up writing about a lot in C&EN of venture capital–backed chemistry start-ups, it can be tricky, because venture capital was kind of built around the software boom, and that’s not instant, but it’s a lot faster than building factories. But that also wasn’t the way that chemistry innovation happened for a long time. Can you talk a little bit about that earlier model—with your Bell Labs, your DuPont Central Research—and how that worked?
Matt: Right, right. So there was, you know, in the 20th century especially, you see these organizations. The one I write about the most in this story is Bell Labs. But you have other big corporations that have, like, really big research departments with tons of scientists doing, you know, a range of work, some of it sort of fundamental basic science, but a lot of it sort of this, like, translational piece, where you pick up an idea that came out of academia or that is basic science, and you sort of turn that into some sort of useful innovation. In the 20th century,you had Bell Labs, you had Dupont, you had [General Electric], you had companies like Xerox. And all these companies really came up with some really powerful innovations, and sometimes not even within sort of the thing that they’re—you know, Bell Labs came up with all kinds of stuff that was useful for things beyond telephones. The lead of the story kind of deals with the transistor, which ended up being sort of more of a computer technology. That was sort of a big success story in many ways, but there’s some trade-offs there too. Because when you think about Bell Labs, one of the reasons they did all this research into basic science and translational research was because they were basically allowed to have a monopoly over the phone system. I don’t know how specifically sort of codified that was, but I think the monopoly was allowed in part, I think in maybe in an unwritten way, because they were generating so much useful research, and, you know, the government didn’t want to get in the way of that. So a couple of things happened. You have, you know, one, the government comes in and says, OK, that’s probably enough monopolies. We’re gonna bring you guys up. You know, that’s one thing. And the other thing people have talked to me about is just globalization. You know, part of that is maybe due to communications technologies, the world becomes smaller. You’re having to compete with companies all over the world that are doing different sorts of things. And so, you know, there’s this argument that maybe you have to be more careful with your balance sheet, and betting on super risky ideas becomes harder to justify. And so they’ve moved towards, the big corporations have moved towards, Let the start-ups develop something, and then when it gets to a certain stage where it’s not so risky, we’ll just acquire them. It’s kind of the model that a lot of the bigger corporations use now. And so, yeah, we’ve moved into a more fragmented ecosystem, where you have universities still doing sort of basic research, a lot of the start-ups sort of pick that up and run with it, a lot of times with venture capital money. And then if you get to a certain point, if you’re lucky, most of the time, these start-ups are looking to be acquired, you know, they get bought up, and then that’s sort of the bigger firm, sort of be the ones that sort of commercialize it in a large-scale way. So that’s kind of been how things have evolved system-wise, over the last 100 years or so.
[music break]
Craig: So is there a specific person or company that you feel has led to this increasing trend of start-up chemistry companies?
Matt: I wrote a lot about these training programs or, like, accelerators. They’re looking at this ecosystem where there’s tons of people with good ideas and who are graduating with PhDs. They can’t go get a job at Bell Labs and just tinker away for the rest of their lives, and so many of them want to start businesses, but they don’t know how to start a business because they spent the last, you know, 8 years figuring out how to do chemistry. And so there’s a couple of organizations that are really devoted to training people who have skills on technology and have really good ideas to run a business and lead a business and do fundraising. So some of the big ones I talked about in the story is, there’s a fellowship program called Activate, which basically does some of this training, and then also essentially gives the founders of these companies a salary for, like, 2 years so they can, you know, they can pay themselves. It’s sort of start-up funding, gives them 2 years to really prove out the technology, learn how to be a CEO. It’s sort of like a training-wheels period. They typically end up in sort of a seed round, you know, raising their first round of venture capital by the time they’re at the end of that program. And then there’s other ones that are similar to that. Breakthrough Energy, which is a big for-profit venture capital firm, also has sort of a fellowship program that’s sort of for earlier-stage founders to get them sort of out of the gate and up and running. And then the other one I really like too is there’s a [US] Department of Energy fellowship that puts entrepreneurs, or people who want to be entrepreneurs, into a national lab, and they sort of work hand in hand with scientists at the national lab to work on their technology. And similarly, just sort of gives them, you know, they’re funded themselves for 2 years to sort of figure things out and learn how to be the leader of a company and prove out their technology and all that. And I think those types of programs, more than, like, a specific start-up company, to me, that’s sort of, like, the quickest way to sort of understand this trend and how people are viewing it, rather than a company, is these training programs.
Craig: In my, you know, fantasy of this podcast, you know, investors are listening. I wonder if you give us just some sense of, you know, what the timeline is from making an investment in these early-stage companies to the exits that your real hard-core, like, business office wants to think about?
Matt: Yeah, I mean, it certainly depends on the technology, depends on your industry, but it’s all slower than software. The most hard-core flex that you can do as a cleantech founder is to start your own software company. [Laughs] I think, like, oh, software, yeah. One of the founders I wrote about, Laura Stoy, she was actually the cofounder on a software company. And it’s something that basically, it’s a software that helps score competitions. They do, like, science fairs, and they do, like, academic poster sessions. So it’s not, like, a huge, you know, it’s not going to be Google or anything, but it was, you know, you still had to write the code and sell it to people. And, you know, when she was in grad school, I think it was her and I think her now-husband created this software, and, you know, started a whole company, and it’s still going. She still runs that company on the side of, like, this technology that she’s developing is, which has to do with extracting rare earth elements from the ash from coal-fired power plants. And so she did a lot of, like, comparing, you know, What happened with this software company I built? versus What do I think is going to happen with this cleantech company that I built? The timelines are just so much longer. And because they’re longer timelines, it’s harder to see that far into the future too, I think. There’s so many checkpoints that you have to make it through that can either slow you down or divert you onto a different path. I mean, it can take years, decades; it can be a really, really long time. I’m sure you could look up the timelines from, sort of, successful technologies of the past, but even ones that seem commonplace to us today, that are, like, materials technologies, it took a really long time for those things to really gain traction. So it’s, I think, all these new ones, it’s no different. If you’re introducing a new chemistry or materials technology, it’s a long time.
Craig: So with Laura Stoy, specifically Rivalia [Chemical], their initial funding came from Alabama Power, a public utility with some of the big coal ash ponds, which is one of the by-products of, you know, just coal electrical generation. Is that kind of thing available? Are those fits common? How can Laura’s story influence some of the future entrepreneurs who are looking for that perfect-fit funding?
Matt: Well, I think, like, with her story, because there was such a perfect-fit funding was why she felt like, OK, this is, like, I should do this. I think she was patient, you know, she had this tech, she was, sort of, developed the technology during a PhD, and, you know, didn’t start a company right away, because I think she was like, I want to get to a point where I feel like I’ve got the right fit. And so I think it was when that opportunity came up, she thought, That’s the perfect thing. That’s my signal to go for this. You know, and I think people can get a lot, into a lot of trouble, if they’re not sort of lined up with sort of the right sorts of funding, in a lot of different ways. Like, I think Laura valued that partnership because it was like, she got to go talk to people who were, you know, would be using this technology and get a sense of, like, What does this look like if you actually use it? What problems is it gonna cause you? How is it going to make things better? How could I, you know, tweak it to make it even more useful? And I think that sort of feedback, getting in and talking to customers—one of the other companies, so Quorum Bio is Sudharsan Dwaraknath’s company. So he’s an agriculture technology company. The first product is microbes that go into the soil, and they break down phosphorus, which makes it available to plants. And then farmers have to use less phosphorus, less pollution. Farmers are spending less money. So it could be really impactful technology. And he has an interesting piece where he ended up getting a fellowship that put him in New York, in New York City, and so their labs are in New York City. And he talked to me a lot about, you know, there’s some real advantages to being in New York City, because you get connected with, you know, there’s a million climate tech investors in New York City. When he goes and meets with an investor, he just goes, you know, he’s up the street. And talent-wise too. You know, biotech talent, New York City can be a good place to get scientists, and he’s had a lot of success with that. But he is always on the road. Like, every time I called him, it was like, I’m in this part of the world. I’m in this, I’m out in the Midwest. I’m, you know, meeting with farmers in Memphis. And I think that was a really important thing for him, in a similar way, just like, [I’ve] got to get out there and get to where my customers are. The more you can sort of align your funding with people who care about what you’re doing, the better.
[music break]
Craig: So the third company in your story is Standard Potential. That’s Andrew Wang, right?
Matt: Uh-huh, yes.
Craig: So what is he trying to do with Standard Potential?
Matt: Standard Potential is a really interesting one to follow. Their technology is they’re trying to use sodium-ion cathode materials to make batteries cheaper. And so most batteries that you see in an electric vehicle, and what Standard Potential is really focused on, is more like stationary energy storage, like storing electricity from a windmill on the power grid. Most of those batteries are going to be made with lithium. Lithium was for a long time very expensive, and the price was kind of going crazy, and people were really worried. How do we, you know, this is really gonna affect our ability to produce enough batteries, is gonna make it so expensive. And so there was a lot of interest in, Can we use sodium instead of lithium, which would be a lot cheaper. You basically are making these batteries out of soda ash, I think is kind of the ultimate starting material. And then the price of lithium totally tanked. And so the argument, you know, Do we need a cheaper raw material? gets weaker and weaker as time goes on. And so they had a really interesting—It’s Andrew and then he has a cofounder, Richard May, who’s really involved too—it was really interesting to talk to them throughout sort of the collapse of the lithium price as they’re saying, OK, so what do we do now? You know, we think sodium ion could be this, really, you know, regardless of what the price of lithium is, it’s still a more abundant, cheaper technology that has some other advantages. It’s safer in many ways. They made several pivots in the time that I was talking to them. You know, they pivoted to, OK, so one of the things, the key things, we have is an additive that was going to extend the life span of our batteries. We could actually use that same additive in a lithium-ion battery and extend the life of that. And that sort of protects you against sodium versus lithium, because you could use it either way. And, they just kept plugging along. They kept working. And they actually, just through the process of making a lot of batteries, came up with a new way to make sodium-ion batteries that they thought would just be a lot cheaper, even than what they were doing before, and it has to do with the manufacturing process rather than the raw materials. And that made it cheap enough that even though the price of lithium dropped, like, we have this new way of doing it, and it’s going to be even cheaper and even more impactful. And you know, as we sort of start to put batteries out on the electrical grid, like an important way of doing that. So, you know, it was really interesting to follow them as they sort of shifted and pivoted and figured out, OK, how do we, sort of, orient ourselves to adapt to, like, what the reality of the battery industry is right now?
Craig: So in some ways, getting a PhD is the act of becoming the world’s foremost expert in one incredibly specific thing. It requires massive amounts of tenacity, the ability to keep going even though things aren’t working, which is, as we heard from that example, sometimes the opposite of the skill sets you need to be a CEO, where you need to be able to make decisions and pivot. So how do you bridge that gap as a PhD to CEO?
Matt: So one of my favorite people I talked to about this was Ray Weitekamp. He’s the founder of a company called PolySpectra, and they make resins that get used in 3D printers, and they’re really rugged. And he was a PhD, then CEO. He went, he did his PhD at Caltech, and went straight and founded this company, got some funding through Activate, had a lot of success. Then, I forget exactly when, but at some point, he started this email course where he said, You know, I’m going to help other people do the same thing. He had so many interesting ideas about this, like, How do you make this jump? And I have this quote in the story where he says, you know, “There’s so much you have to unlearn.” You know, you’re taught to do so many things in academia that end up being detrimental if you become a CEO.
You know, the people who are successful at this, I think, are people who are not incredibly rigid. Like, they went into a PhD and they learned a bunch of stuff, and they learned how to be a certain way there, you know. They learn how to, like, keep going, after there’s a million failures, and just go. And I think, someone who can learn to do that and then turn around and learn to do something else, they’ve certainly shown the capacity to learn a new way to do things. And so I think there’s an argument, a couple of people made this argument to me. You know, if you figured out how to be the world’s foremost expert in something, you’re good at learning, like, as long as you can sort of be flexible and be willing to sort of undo some of the habits that you learned as you’re training to be a scientist, you probably are gonna be pretty good at learning how to be a CEO.
Craig: So in some ways your article is about that transition from PhD to CEO. And I wonder if you could talk a little bit more about the training resources that are available. Because obviously there is a financial incentive through these venture capital funds and accelerators for people to do that, but how do they get the skills?
Matt: Actually, I wanted to talk about this on the podcast because this is the one that blew my mind. So NSF has, National Science Foundation has, something called Innovation Corps, or I-Corps. The whole point is, like, they’re basically helping people sort of recognize, You have the scientific idea, what are the possible commercialization opportunities around this? And the way they do this is by just forcing the scientists to talk, do like, tons and tons of interviews. I think the numbers that they have to do 100 interviews over the course of, like, 8 weeks or 7 weeks or something like that. A hundred. It’s supposed to force them to, like, listen, rather than, like, pitch and rather than sort of, like, explain. I talked to somebody at NSF about this, and she said, What we found is there’s a real turning point. Like, the first 50 interviews, people don’t quite know where they’re going, and they’re just a little bit overwhelmed by it. And then after you talk to 50 people, like, people just sort of get the sense of, like, it all sort of starts to coalesce. And they’re like, I think I get it, like, I think I know who I need to talk to next. And then, sort of the second 50 interviews are really directed by that, and they’re like, OK, now I need to know who to talk to. And they sort of get on a roll. And I thought that was so—I related to that as a reporter, because I, like, sometimes you start a reporting process, you’re like, What? I don’t really understand, like, I don’t know how to frame this. I can’t quite pick out what the trend is. And then after you get through the middle of it, you’re like, Ah, now I know what it is. Now I know who, need to know who I talk to. But I was just kind of blown away by that, that 100 interviews is just so many phone calls.
[music break]
Craig: So beyond the obvious one, which is money and how to get enough of it to make your thing a reality, what are the biggest upsides into going the start-up route versus continuing your research in the university lab, you know, trying to get a professorship and then have a, you know, be a PI [principal investigator] somewhere?
Matt: I think it really depends on what you personally want and what your personal goals are. Because that was some of the, like, sort of business side of the research thing I looked at is, like, it totally does not make sense financially to start, like, a chemistry or materials start-up. I think it really comes down to, like, you know, why are people doing this? It’s impact motivated. Like people want to have the biggest impact. But that’s not entirely it. So Andrew Wang talked to me. He said something really interesting to me that sort of upended the way I think about this. Because he was saying, like, Yeah, we think about, you know, we want to go out there and have, like, a big impact on climate change. That’s a huge part of why we’re doing this. But he’s like, But if I really wanted to, like, have the biggest possible impact on climate change as, like, a battery scientist, probably the best thing for me to do is, like, brush up on my Chinese, like, go work at CATL [Contemporary Amperex Technology], like, one of the big, the biggest, huge battery manufacturers in China, and help them, you know, make their separator in the battery like 1 micron thinner, which will make, like, all of the batteries they produce just that little much better. And he’s like, I bet if you added up the sort of, like, climate change, you know, CO2 emission reduction potential, like, that’s probably the route to the most impact is sort of, like, make an incremental improvement to an already-scaled technology. Like, he was just saying, I just like the challenge of sort of transforming myself into a CEO. It’s a huge challenge. I hesitate to say fun, but, you know, like, I think it’s rewarding. Maybe “rewarding” is the right word. I think it’s rewarding for people to, you know, take on something that seems really difficult. It requires you to, like, learn a lot really fast. It’s fast paced and, you know, I think that’s really appealing to a lot of people, and certainly the people that are actually doing it. I think you have to want that. I think to be successful, you have to, like, enjoy the rewards of just sort of bringing the most out of yourself and, like, learning to do these things that you didn’t know how to do before and really succeeding at it.
Craig: So stepping back to the 10-thousand-foot view, how does our current innovation system compare to the corporate lab model in terms of that ultimate goal of getting world-changing technology out into the world?
Matt: It depends on who you talk to, and I certainly didn’t talk to every business researcher in the world, but most people I talked[to think we’re worse at it now than we were before, I think. For me, it’s really hard to determine what metric to look [at], like, and also understand exactly what that metric means in terms of how innovation is happening. It feels like we are doing innovation really well, but then there are signs in the data that we’re not doing it that well. The data is a little bit confusing. It’s hard to know what metrics to use. I think there’s a chance that we’re not doing as well as we have done before. It might just be harder to do innovation than it used to before. It might just be that, like, the farther you get technologically, the harder it is to come up with something new. But I feel like people would have said that 100 years ago. Like, it always feels like we’re high tech. No matter what point in time you are, it feels like you’re high tech, and there’s always more to go. So I don’t know. Regardless of whether we are doing it better than we were in the 20th century, or are we doing it better now, we sort of are living with the system that we have. And that was another thing a lot of people told me. It’s like, You know, we’re not going back to the corporate research model. Like, you know, I talked to some people that kind of favor that and thought that that was really good. Even those people are like, You know, those days are gone. So, like, all we can do is just try to take what we have and do it better. But I think that’s the way forward is, you know, look at what we’re doing now and keep trying to improve it. Because regardless of whether, what the reality is, whether we’re doing it better or whether we’re doing worse, you could always do better. But, you know, we can always be better than we are doing.
Craig: There’s a lot more to talk about here. Matt, thanks for diving deep with us on this.
Matt: Yeah, yeah, it was super fun. Love talking about it.
Craig: Listeners can find me on social media as @Craigofwaffles. Matt, how can our listeners get in touch with you?
Matt: Call me: 805-233-1686.
Craig: Yeah, that’s an answer you don’t hear very often anymore. Nicely done. You can find Matt’s cover story about PhD students turned CEOs on C&EN’s website or in print in a double issue that came out Aug. 19. We put a link in the show notes along with the episode credits. We’d love to know what you think of C&EN Uncovered. You can share your feedback with us by emailing cenfeedback@acs.org. This has been C&EN Uncovered, a series from C&EN’s Stereo Chemistry. Stereo Chemistry is the official podcast of Chemical & Engineering News. Chemical & Engineering News is an independent news outlet published by the American Chemical Society. Thanks for listening..
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