Commercialising innovative materials is usually a long journey, punctuated with roadblocks, detours and delays. Dr Richard Holliday, from Isis Innovation, offers some personal perspectives on how developers, including university spinouts and early-stage companies, can improve their chances.
Finding your champion
The chance of introducing a new material into a large corporation’s products or processes will be substantially increased if you can identify and cultivate an internal champion in that organisation. This will be someone who can help you overcome the technical and commercial obstacles you will undoubtedly encounter as you proceed through the company’s evaluation and validation process. It might be a member of the purchasing department, who really wants your new material because of the cost savings it offers, or perhaps a young, ambitious materials graduate aiming to make their mark in the company. Whoever you identify as your internal champion, work closely with them and ensure that your priorities are aligned. During my time in the automotive industry, I was an enthusiastic internal champion for the introduction of high strength steels in automotive body-in-white structures. These new alloys offered substantial weight savings over the incumbent mild steel parts, leading to fuel economy improvements for the vehicle – something I felt passionately about and so was keen to champion on behalf on the steel industry. Customer pull is always better than technology push.
Pick your fight carefully
In the heady days of the lab breakthrough, it is easy to assume that your new material will triumph over the current incumbent material in all relevant markets and applications. However, that material is probably well placed for a number of reasons – it performs well, is cost effective and has an established supply base. Try to identify lead applications where the incumbent material is sub-optimal in some way. Perhaps the future price is predicted to increase due to raw material prices, or possibly there are concerns around security of future supply due to a merger or acquisition in the supply base. In the multi-billion dollar transparent conductor market, for example, indium tin oxide is the dominant incumbent material, but new alternatives, such as carbon nanotubes and silver nanowires, are achieving commercial traction, largely due to concerns around the continuity of raw material supply from China, the main producer of indium.
Alternatively, try to identify a new application or emerging market niche for which there is no incumbent material. At the same time, for start-up companies, the total addressable market and potential commercial returns will need to be large enough to attract external investment. Balancing these two requirements can be a challenge.
What’s the risk?
A new material may offer huge potential benefits in terms of cost or performance but, if the risks associated with its failure are high, the customer’s testing cycles will be long and their internal assessment process comprehensive. Some industry segments will have a lower tolerance for risk than others, with automotive, aerospace and the medical implant industries all having exacting requirements. For example, producers of magnesium alloys have had to work very hard to gain approval from regulatory bodies and aircraft manufacturers for using magnesium in civil aircraft interiors, primarily due to concerns over flammability.
Yet, within each industry there may be easier-to-target applications. A new material will face more questions and testing in a crash-critical component within a car than it will in a non-load bearing component. Don’t underestimate the risks that your new material creates for your intended customer. These risks might not just be with failure of the material. There may also be risks associated with continuity of supply and other commercially important issues. If you have the luxury of choosing a particular market segment, go for one with a lower risk profile (all other things being equal).
Watch out for raw material prices
The price of raw material feedstocks can create both opportunities and threats to the commercial viability of new materials. For example, the rising price of rare earth elements (REEs) has provided opportunities to introduce new alloys with reduced REE content, such as rare earth magnets with lower neodymium levels. On the other hand, potential customers could be concerned about the price stability of key materials used in your technology. Try to mitigate the perceived risk to a customer by showing a detailed understanding of the costs of the raw materials you use. There are many public sources of both historical commodity prices as well as future price predictions. In a previous role, I worked on the commercialisation of novel nanogold catalysts for diesel engine emission control. Although this was ultimately successful, our efforts were certainly not helped by a doubling of the price of gold (the raw material feedstock) when the economic downturn gripped the world in 2008/9. Although precious metals are an extreme example, base metals and other commodities are not immune to this issue.
Longer than you think
However scientifically advanced and exciting, university research is usually early-stage and rarely close-to-market. A university spinout aiming to commercialise a radical new material will be unlikely to see a return on its efforts for a number of years. One director of technology for a major UK materials company once told me his rule of thumb for materials commercialisation was 10 years from lab to market – about the same as commercialising a new pharmaceutical. DuPont reportedly took 20 years to fully exploit Kevlar and history has many other examples of the journey taking even longer. So those entrepreneurs seeking to commercialise advanced materials need to attract investment to sustain the venture over quite long development cycles. One trick can be identifying one of the few venture capitalists dedicated (or at least sympathetic) to the advanced materials sector.
Passing the customer’s testing cycles and validation process may mean your new material is now approved. But it doesn’t necessarily mean the first order is in the post. In many industries, the product development cycles are measured in years, so even if your new eco-friendly composite has been approved by a leading automotive manufacturer, you may still have to wait another year or two for it to be specified in a component on a new model and a further few years for that new model to roll off the production line. Don’t break out the champagne just yet.
Most of the new materials commercialisation projects I have observed over the last 20 years have taken longer than the initial plans (50% longer is probably not a bad rule of thumb). Reaching a reasonable market share can take even longer. A classic business school example that has been reported is that of the PVC pipe. This was introduced to the market as a novel materials technology in niche industrial applications in 1952, but took a further 15 years to reach reasonable volume in the housing market.
Given this, one might imagine that the introduction of innovative materials would be dominated by large companies, which have the financial resources to bear such a time burden. However, there are many good examples of small start-up companies successfully bucking this trend. A good example from the University of Oxford is Oxford PV, which has pioneered the development of perovskite thin-film solar cells and is setting the early pace in the building-integrated photovoltaics industry. Young advanced materials companies such as this often have the advantage of being hungrier and nimbler than the large corporates.
If you are about to embark on the journey of commercialising a new materials technology, don’t be put off by the challenges highlighted. Those working at an academic institution can access specialist advice, intellectual property protection and possibly seed funding by talking to their institution’s technology transfer organisation.
If you work with the right customers, ensure that you have sufficient resources (time and money) and carefully plan the industry market segments you will be targeting, then there is every reason to be confident of success. Each issue of Materials World is full of innovations that are, or soon will be, achieving commercial success.
To learn more about Isis Innovation, through which the University of Oxford’s expertise is available, email firstname.lastname@example.org