How to be Competitive as a Startup: A Case Study of Mango Materials
Meet Mango Materials: a woman-founded, woman-led startup launched under IP protection from Stanford University. Mango Materials takes waste methane, one of the most potent greenhouse gases, and turns the gas into a fully biodegradable polymer that is a viable plastic substitute. Larta Institute previously worked with Mango Materials in our National Science Foundation (NSF) commercialization acceleration program (NSF CAP1) in 2012, and we featured them as a presenting company at our 2015 Ag Innovation Showcase. Today, Anne Schauer-Gimenez, Vice President of Customer Engagement, talks with Larta founder and CEO, Rohit Shukla, on Mango Materials’ competitive edge in the world of bioplastics on our latest installment of Ideas, energized.
Recently, Mango Materials debuted a biodegradable polyester, set to revolutionize the fashion and apparel industries. Anne Schauer-Gimenez wrote a quick description of the material:
“Mango Materials has developed a biodegradable biopolyester fiber to replace persistent polyester in apparel and other products. If clothing from this new material ends up in a landfill, it will biodegrade naturally. If the methane released from this biodegradation is captured, it could be used to make new garments using Mango Materials’ closed-loop process. This naturally occurring biopolyester can be used with other natural textile materials to produce a truly durable and sustainable product. Mango Materials is currently scaling the production of the biodegradable fiber at a San Francisco Bay Area wastewater treatment plant. This circular technology benefits the environment throughout its entire process from renewable feedstock sourcing to carbon recycling at the end of a product’s life.”
Listen to the podcast:
Hello, I’m Rohit Shukla, and this is Larta Institute’s podcast series, Ideas, energized which shines a spotlight on entrepreneurs in the hard sciences with whom Larta has worked over the years.
Every year, we work with hundreds of science-based, would-be entrepreneurs who are developing technologies and solutions that feed, fuel and heal the world. They are grantees of the great science-based agencies like NIH, NSF, USDA, NIST and DOE, all of whom are our clients and partners.
Conventional wisdom has it that innovators in the sciences do not necessarily make good entrepreneurs. Yet at Larta, we've seen many such would-be entrepreneurs cross the chasm to nurturing and cultivating their innovative concepts to meet specific demand.
Today, we are talking with one such entrepreneur, Anne Schauer-Gimenez, Vice President of Customer Engagement at Mango Materials.
Mango Materials is a woman-led startup based in Palo Alto, California. The company seeks to develop a biodegradable plastic that will help eliminate the horrible problem that plastic waste has created for the world's oceans, waste dumps and even for life itself.
We worked closely with their founder and CEO, Molly Morse, in 2012 to develop their 18-month commercialization plan and strategy and then Anne was also the representative of the company at the 2015 Ag Showcase which we put on in St. Louis.
Rohit: Our conversation today explores the vital subject of competitiveness. How does one rise above the signal noise? Welcome, Anne.
Anne: Thank you so much for having me!
Rohit: So, one of the first things that companies need to think about is the mission that they have developed for themselves. And in your case, Anne, it is quite a mission. Why don't you speak a little bit about the mission the company has developed?
Anne: Yes, so Mango Materials’ mission is to transform waste into eco-friendly affordable materials at competitive economics. So converting waste, which in our case is methane, to a specific biopolymer called PHA or polyhydroxyalkanoates so that way this can be a plastic substitute and can then be integrated into many, many plastic goods for consumers around the globe.
Rohit: This is great because it shows here a mission that is not just about doing good, but also doing good at a competitive price and a competitive posture, which I think is exactly the essence of competitiveness for a company. Let me ask you though, Anne, is this a novel idea or is it an enhancement of existing solutions?
Anne: So, we're not the first ones to make PHA. PHA has been around and been studied for quite a long time, actually. But others use sugar as a feedstock, which can be an energy-intensive and potentially costly process, so getting PHA out on the market has been a challenge due to price and performance. Using methane gas, which is extremely cheap and very abundant, really changes the game when it comes to being able to have PHAs on store shelves and in everybody's home, which is our dream for the future.
Rohit: So the process of using methane gas is specifically what you've been able to innovate?
Anne: Absolutely, yes. So, our core technology is that conversion. It's a bacterial process, so there's a specialized set of microorganisms that we've been cultivating for many, many, many, many years to make sure that they're the best polymer producers they can be.
Rohit: So Anne, I know you've established quite clearly that this is a novel idea: the use of methane gas to produce biopolymers and plastic products that are substitutes for existing plastic products. I guess I just wanted to check in on the notion of who your customer really is and I know you have the ability to reach a much larger audience than you're currently reaching. Just speak to us about that.
Anne: Yes. So, when ultimately Mango Materials is widely successful, we will be a raw materials supplier, so we will be supplying plastic pellets and then entering a quite large, extensive value chain. But for now, because we are relatively small and PHA isn't quite out there on the market in vast quantities, we need to work with the whole entire value chain in more of a B2B type approach and make sure that everyone's on the same page so that you can convert whatever product that they're looking for. PHA is extremely versatile and can be converted to many different products. So, ultimately in the future, you’ll see all sorts of plastic goods that are made from PHA on the shelves. So we will be a consumer-facing product eventually, but we need to work with the businesses now to get there and work with them to make sure that they're educating the consumers properly as well. So it's a little bit of a tiered approach that we worked together in a partnership format.
Rohit: Very good. So you talked earlier about price and performance and I wanted to pick up on that to ask you, is the cost of your product competitive enough for people to adopt something new? Because this is a new process, even though biopolymer has been around forever. Using this, using methane gas as a means of being able to produce those products is a new and fairly novel concept so are the cost issues that you have shown up with attractive enough for your customers to buy from you?
Anne: Definitely, once we get to commercial scale. Obviously as you are a growing company, it takes a lot of inputs to get your output. But once we are full commercial, our economics show that we can be cost-competitive with petrochemical-based plastics, which we firmly believe will then lead to wide market adoption for PHAs. And that’s kind of been one of the slightly stumbling blocks for PHAs, is they are a higher price point right now, which is fantastic as you are a growing company. But once you get to full commercial, we need to drop that price in order to be competitive with the polypropylenes of the world.
Rohit: I'm sure you're staying up at night thinking about this stuff and thinking about it every single day, right?
Anne: [laughs] Yes, I think about it every single day. You just, you can't stop thinking about it, because things change, you grow, the consumer landscape changes. You never know what's coming next, so you always have to be proactive instead of reactive.
Rohit: That's part of your competitiveness. What does it mean in your case to scale? How far are you from scaling and what are the steps you are going to be taking? Because that's going to affect how competitive you become in a changing landscape.
Anne: Absolutely. We definitely take advantage of economies of scale. The larger facility that we can build, the better we can drop that price. Right now, we're currently close to the process of building a demonstration facility producing thousands of pounds of polymer per week. Not huge in the whole polymers landscape, but for us is really, really big and we're really excited about that opportunity. After our demonstration facility is up and running, we will be getting ready to hit the ground running with our first commercial plant, which will produce about 10 million pounds of polymer a year. And after that, it's really just a replication at various methane production sites, even internationally, to produce billions, if not trillions of pounds of polymer in the future.
Rohit: The idea was that in 2015, you were going to develop these microbeads that were very much a part of the whole biopolymer universe you were considering, and then what happened?
Anne: [laughs] And then some legislation was passed that had some kind of vague language that basically banned all microbeads, so the brands are pretty much eliminating them completely. Which we’re very much a proponent from because you're not going to have those little beads that end up, you know, in the environment indefinitely but it definitely changed our thinking because we no longer had a market for the application we initially thought. So we had to kind of go back to the drawing board and as I said, PHA is really versatile so you can convert it into many different products. But, what was next?
Rohit: And what was next was the fibers?
Anne: Yeah and then it turns out that last year we were able to spin this into fiber. I went back to some of the contacts that I had met, you know, in 2012-2015 and said, “Hey is this interesting?” And they were like, “When can we get it?” “How can you do it?” “Can you show it?” “Can I see it?” “Can you show me?” “When?” “When?” “Now.” “Now.” “We need it now.” And people we jokingly say have been doing backflips over this application.
Rohit: Why are they so excited though, Anne? I mean, what is the deal with it?
Anne: Polyester is ultimately an amazing material -
Rohit: - the most versatile material you can find.
Anne: Exactly, exactly. I mean there's so much polyester out there but it comes with -
Rohit: - a cost, a terrible price.
Anne: Exactly, exactly. And a lot of the brands are feeling the pressure of this cost, and therefore we have a solution that can change the way that you think about polyester. We thought it was exciting, but now I know this is exciting.
Rohit: And do you think many of them - the fashion brands - would do an environmental message as well, as part of their sort of marketing for the product?
Anne: Yes, we're seeing a lot of that kind of -
Rohit: Already happening?
Anne: Underlining, yes, definitely. A couple of brands in Europe, you know, have made 100% compostable organic t-shirts and things like that which is, the movement is there and it’s definitely gaining momentum. So it's really was just the right place, the right time, so I kind of believe this is what Mango Materials was meant to do.
Rohit: Well I tell you, and I mean, you are the poster child for our mission to feed, fuel and heal the world.
Rohit: Finally, Anne, I know we wanted to save the best for last and there's some exciting new things that are happening at Mango Materials that go well beyond what we’ve talked about today. Give us a sense of what that is.
Anne: Yeah, so, we're really excited that back in October, we launched our biodegradable fiber for textiles, so we were able to produce a bio polyester. So, we want to change the way that people think about polyester. Polyester, you know, 85% of it just ends up in landfills and it's not going to go anywhere. So if you can convert that into a biodegradable substitute, so your T-shirt will last as long as you need it, but once you don't need it anymore, the organisms will do their work and be able to biodegrade that t-shirt. It changes the game on textiles and the whole fashion industry and we’ve received an overwhelming response on this. We're really excited to move forward with hopefully some development projects here in this year or close to this year and be able to put some things on store shelves or online to see if there is potential interest from the consumer, if they're looking for a biodegradable replacement for those various textiles.
Rohit: And that's good news for hoarders like me because what will happen is, I will not need to hoard anymore. That T-shirt can come back again in another form downstream. That's wonderful!
Anne: Yes, absolutely.
Rohit: So exciting!
Anne: So, say it ends up at a landfill with a Mango Materials facility, your T-shirt will biodegrade to methane and then be able to be made into a whole new t-shirt again.
Rohit: Love it, love it.
Anne: We love that option, we’re really excited about that as one of our first applications that we’re moving forward with.
Rohit: Anne Gimenez, thank you so much for joining us today.
Anne: Thank you!
At Larta, we are really proud to be associated with Mango Materials. We’re watching and waiting for big things to happen to Anne, to Molly and to Mango Materials in the next few years as they prove themselves in an increasingly competitive marketplace. So let's consider Mango Materials. They’re still an early stage company, but they're making strides. They've taken the risk out of their innovation one step at a time. They've determined where exactly they fit in the market. They've aligned what they do with the specific features that people are looking for, and they're out there passionately advocating on behalf of the issue that is the cornerstone of their mission. Understanding your company's competitiveness is a complex and constant learning curve, one that doesn't go away after you’ve first measured it. So embrace this process. Whether you know it or not, it needs to become your new favorite pastime as an entrepreneur.