Is Direct to Consumer Marketing the Key to the Success of SynBio?
We spoke with Scott Franklin, Co-Founder and CSO at Checkerspot. Checkerspot is a synthetic biology company biomanufacturing high quality renewable materials for consumer goods. Scott’s deep technical expertise coupled with his diverse experiences commercializing bio-based products has led him to believe that marketing is often overlooked as a critical factor to a biotech company’s success.
Scott Franklin, Co-Founder and CSO at Checkerspot, with Co-Founder and CEO, Charles Dimmler. Photo credit: Erika Dimmler
Culture: You have quite a lot of experience working with microalgae in various industries producing different types of products. What is unique about algae as a biomanufacturing organism?
Scott: Microalgae have two unique traits that distinguish them from other biomanufacturing host organisms. First, they can grow using sunlight as an energy source, which has the potential for major cost savings in some instances. Second, microalgae are fantastic at making triglyceride oils; they’ve evolved over hundreds of millions of years to store energy in this way.
Culture: You note that microalgae being able to grow phototrophically (using light as an energy source) is a benefit in only some instances. Why and when would you grow microalgae phototrophically vs. heterotrophically (using carbon sources for energy)?
Scott: At the beginning of my career, I worked exclusively with phototrophic microalgae. The thinking at the time was that growing microalgae in large open pond facilities using sunlight, air, and water to make products would be drastically cheaper than fermenting yeast or bacteria in bioreactors. My first role was with Cyanotech in Kona, Hawaii, where everything was grown in ponds on a 90-acre outdoor facility. The products were primarily nutraceutical, mostly Spirulina, but we also made astaxanthin, which is a powerful antioxidant and pigment used extensively in aquaculture (it gives farmed salmon their pink color) and also as a nutraceutical.
From there I went to the Scripps Research Institute, where we were trying to produce therapeutic proteins in microalgae. At the time there was a lot of interest in producing antibodies phototrophically in plants; Scripps was the first place to make antibodies in plants using what they called “plantibody” technology. The idea was that producing the proteins in plants or microalgae relied on scalable and fairly simple agriculture or aquaculture techniques. Since downstream purification of antibodies is such a critical factor in their manufacture, we believed at the time that any issues with quality from growing them outdoors could be handled through purification. I left Scripps to help start Rincon pharmaceuticals, where we attempted to commercialize this technology in microalgae.
Culture: How did that work out? It sounds like a great idea, but I don’t very often hear of biologics being made in plants or microalgae…
Scott: There were a lot of challenges and it ultimately wasn’t very successful. The biggest challenge was that since we weren’t using a mammalian host, we were unable to make a fully functional, complex mammalian protein. In retrospect, we should have started with simpler proteins, setting the bar lower and focusing on molecules where our platform could really be impactful. For example, we could have worked to produce proteins for the cell culture market, where animal free systems are highly sought after or where our production method might offer a competitive advantage in terms of IP.
The key learning for me from Rincon and the time I spent at Cyanotech was that to be successful you need to understand your market and be able to articulate a rationale for why it makes sense to produce a particular molecule in a particular way. In terms of productivity, phototrophic, single celled organisms can never rival a heterotrophic system because light becomes limiting; as soon as you get even a moderately high level of biomass accumulation you prevent further product generation. In concrete terms, we could make about 325 metric tons of dried algal biomass per year in our ponds at Cyanotech on a 90 acre facility. With highly productive microalgal strains, grown heterotrophically, we can produce that much biomass in 2 large industrial fermenters in about 6 days.
For nutraceuticals, the phototrophic, outdoor systems work because there is a whole aspect of their marketing and connection with their consumers that is tied into how the product is made: people like knowing that their spirulina is all-natural and grown in the sun. With pharmaceuticals, which are in a cost sensitive market, if we had been able to lower production costs with a simpler molecule, we probably could have pulled it off. But really articulating the value of a product (i.e. good marketing), has to go beyond cost. The pharmaceutical industry is always looking to move away from anything that has to do with animal sources of production (because of viruses and other adventitious agents), so that was another angle we could have played-up if production had been more successful and we focused on the right molecule at the outset.
Culture: It looks like you next went to Solazyme, where you were then working with heterotrophic algae?
Scott: Yes, at Solazyme we focused on the development of microalgal strains as platforms for production of triglycerides. Many microalgae can grow heterotrophically, being fed sugars in a bioreactor just like yeast or E. coli. We employed both genetic engineering as well as classical techniques to improve strains and their resulting outputs.
Culture: That sounds very similar to what you do at Checkerspot, is it not? What did you learn from your time at Solazyme that led you to start your own company?
Scott: The basic challenge for early-stage industrial biotech companies is that they are, for the most part, trying to either replace or improve upon some incumbent molecule. They are trying to sell a process, platform, or molecule to customers who already have that molecule and have already figured out myriad ways to reduce their costs. The problem is that making these products by fermentation is not a great way to lower costs out of the gate, particularly if you are competing with petroleum-based products (especially if you are doing so for the first time in an entirely new platform).
Our biggest success at Solazyme, in my view, was in the consumer product space, where we were able to yield high margins because we had developed a unique brand around a molecule. We initially tried to market the molecule as a raw material, an ingredient, to some very large players in the personal care space. My Co-founder at Checkerspot, Charles Dimmler, lead that initial effort while at Solazyme. Charles and his team determined pretty quickly that the value we could extract from selling a raw material, combined with the time it would take to bring it to market, didn’t align with the investment we’d made thus far in its development. They came to the conclusion that a better path would be to develop a brand as a go-to-market strategy. The brand could do two things: first, and perhaps most importantly in the short term, it could animate what was possible utilizing microalgae as industrial microbes. It allowed us to connect to consumers, through marketing, to bring biotechnology into the personal care space for the first time. Second, and equally important in the long term, we could generate revenue, and with time and cultivation, create tremendous value for the company.
It was from this successful experience that Charles and I realized we should focus on a direct to consumer model when building a synthetic biology company. We would build a business around a brand that could extract value from what is novel about our technology, allowing us to articulate to our consumer demographic why what we were doing was exciting. Instead of starting the business around the molecule we wanted to make and trying to find a buyer, we would start it around the customers’ needs, delivering performance and connecting with them on an emotional level. This was the genesis for creating WNDR Alpine, an outdoor brand where we’re using new materials to create better products, starting with the Intention 110, our backcountry ski.
The Intention 110 backcountry ski by WNDR Alpine, containing biomanufactured molecules from Checkerspot. Photo credit: Carson Meyer
Culture: With this direct to consumer model, what is the creative process like at Checkerspot? Do you look for opportunities in the consumer goods space and then try to find bio-based molecules to create products, or do you identify the bioproducts and then see which would have the greatest application for consumers?
Scott: We look at things from the perspective of the consumer problem we’re trying to solve and how materials produced in our molecular foundry, combined with polymer chemistry, materials science and fabrication (engineering) can solve those problems. Animating our technology in our own product allows us to do a terrific amount of applications development, which we can feed back to our molecular foundry and think about how to design better molecules. Through this process we are working to create a palette of bio-based molecules that lend themselves to various, customizable functions.
To that end, a big part of what we do is to survey different triglycerides that exist in nature. In agriculture, there are about 15 crops that supply 99% of vegetable oils in the world. But there are tens of thousands of plants that make oil seeds with an incredible diversity of fatty acids. Our team will bring in obscure plant seeds, grind them up, ascertain their fatty acid profile, and if we find an interesting molecule, we’ll make an mRNA library (transcriptome) from those seeds. Utilizing a bioinformatics-based approach, we identify which mRNAs and resulting proteins are most likely to impact oil synthesis to produce these novel fatty acids. Genes of interest then enter our gene expression pipeline and are ultimately tested in our microalgae platform to see what the effect of expressing a given gene or gene combination is, producing a catalogue of genes for the production of unique, triglyceride oils.
Culture: As you’re making the libraries and cloning plant genes into the algae, what are some of the biggest challenges you encounter with strain engineering?
Scott: These microalgae are incredibly robust and very adaptable; they’re able to take these plant genes that control synthesis of new triglycerides and make them with very few issues, once we identify the right gene. That tends to be the biggest challenge, even when applying the best bioinformatics tools; finding the correct gene and gene/expression cassette context can be the biggest challenge. Once we do find the right gene, however, these microalgae hosts have a natural ability to fill up with oils to 70-80% of dry cell weight, and now we’re just giving them new oils to produce instead.
From a bioprocess perspective it has also been surprising how robust these organisms are-- they’re amenable to very high cell density fermentations at a very large scale making triglyceride oils they have never made before. Downstream purification has also been relatively straightforward. At the end of the process we crush the cell and remove the oils mechanically or with solvents, just like people have been doing with oil seeds for thousands of years.
Culture: Once you’ve identified an interesting fatty acid or enzyme involved in fatty acid synthesis and demonstrate you can produce it, then what?
Scott: Then we start to think about the functionality of that triglyceride in various material applications. The functionality for triglycerides as it relates to polymer chemistry comes down to three types of bonds: carbon-carbon double bonds, epoxide groups, and hydroxyl groups. We are searching oilseed transcriptomes for activities that, from a bioinformatics perspective, are likely to participate in creating these types of fatty acid modifications.
From a material science perspective, we know that if we make a molecule with a particular chemical structure, changing a bond here or adding a hydroxyl group there, how the physical properties of the resulting molecule will behave. We can then create polymers with different hardnesses, tensile strengths and elasticities that lend themselves to different applications. We’re working to create a palette of bio-based molecules that are customizable to fulfill a variety of functions. We take that a step further by doing real world applications development in our own products.
Culture: Are all of these molecules new?
Scott: Not necessarily “new” from the perspective of never before known to humankind, but certainly new from the perspective of being utilized at any scale and in materials applications. We see these fatty acids in an oilseed profile, or read of them in the literature, but they’ve never been utilized in this way.
Culture: So you’re building a library of biomaterial building blocks, while in parallel assessing how those building blocks could come together to create a consumer product?
Scott: Right. Take the Intention 110, our first product offering from WNDR Alpine. Charles and I are both very into the outdoors and backpacking, mountaineering, etc. We started talking to fellow outdoor enthusiasts who we know personally and who we’ve met at trade shows and through introductions, and realized that those consumers feel very strongly about how and with which materials their products are made. Backcountry skiers in particular are very cognizant of how design and materials impact performance, but they also care about how things are made and the core values of the companies that are making them. Backcountry skis were a perfect starting point, because there are 5-6 places within a ski where you can utilize polymers. Once the design team at WNDR Alpine began prototyping, we realized that we were measuring properties and performance in a way that no one else was, and we were therefore designing a product that was not just sustainably produced but also functionally superior. This is how we’re able to build a brand around our biomaterials that creates real value.
Culture: I typically end these interviews by asking whether you have any advice for others in the SynBio community who have just started or may be looking to start their own company. From your experience, what would you share?
Scott: I really think you need to have a product, and by product I don’t mean a molecule, that connects with an end-use consumer. There are a lot of ways to make a lot of different things. The lesson we have learned is that the key to building a sustainable business in industrial biotechnology is to get to physicality, animating what you can do with the molecule you have labored to produce. In my opinion, simply making a prototype isn’t sufficient. Connecting with the consumer, getting feedback, iterating through many prototypes, doing real applications development, all of these things are essential to understanding the real value in what you are making. That’s seldom realized on the first pass. This allows you to bring to life what your materials can do and deploy a marketing strategy to tell this story to your target demographic. Unfortunately, marketing can tend to be an irrationally dirty word in industrial biotech. Marketing is important in every industry and being able to wrap value around your product other than just positioning on cost will enable you to build a real business by capturing the most value from your technology.