voiceover: A key component of the modern world economy, the chemical
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It is also an industry in transformation where chemical executives and
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Discover how leading companies are approaching these challenges
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Join Victoria Meyer, president of Progressio Global and
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As she speaks with executives across the industry and learns how they are leading
their companies to grow, transform, and push industry boundaries on all frontiers.
Here's your host, Victoria Meyer.
Victoria: Hi, this is Victoria Meyer.
Welcome back to The Chemical Show where Chemicals Means Business.
Today, I am speaking with Gaurab Chakrabarti, who is the
co-founder and CEO of Solugen.
There's a lot we can say about Gaurab.
He is a physician and a scientist, , a Forbes 30 under 30 recognition in
industry and manufacturing, and more importantly, in 2016, he and Sean Hunt
co-founded Solugen with this vision of decarbonizing the chemical industry.
So we're going to be talking about that today and more.
Gaurab, welcome to The Chemical Show.
Gaurab: Thank you for having me.
, really excited to be on.
Victoria: I'm really excited to have you here.
So chemicals and biochemicals.
Um, weren't part of your original plan is my guess, right?
So the story is, and you can tell us the story, but the story is you
were on your way to being a medical doctor, before you started Solugen.
So what got you onto this path?
Gaurab: So I ended up getting the medical doctorate.
What we, what I was doing, I was studying pancreatic cancer.
And in pancreatic cancer, there's, uh, like a unique quirk that people have
known for, for years is that it makes chemicals like hydrogen peroxide and
certain organic acids super efficiently.
And everyone just knew it.
It was like this like secret that everyone knew about in the
industry, but no one really knew why.
And so what I was really interested in learning was like, why is it, what's
actually driving its ability to do that?
So that's really what got me interested in the chemical side
was how does this cell do that?
But on top of that, I came from a chemicals family.
So my whole entire.
My dad was a chemicals entrepreneur.
My uncle's chemicals entrepreneur.
Everyone in my family is either a chemical engineer or a chemicals entrepreneur.
So that was the life you know, that was like the life path.
And so I said, you know what?
No, I'm not going to do that.
I'm going to go be a physician scientist.
I'm going to figure out cancer, right?
That's what I thought was a really cool place to be.
But little did I know, uh, that cancer really is just a chemical factory.
It's just like any other, you know, chemical process that
it's a complex chemical process.
But once I started studying the cancer biology, I realized that this is the
same thing that My dad talks about, this is the same thing my uncles talk about,
it's just, it's called mass balance.
Like, something goes in, something comes out.
That's really all it is.
Uh, and so
that's where it all started was this, um, insight that like, Hey, maybe there's
something about cancer that can teach us something about chemical processing.
So I talked to my best friend, Sean Hunt, who is at MIT doing his, uh, He's a Ph.
D.
in chemical engineering on the production of massive industrial chemicals.
He's like, I call him the dinosaur.
He's your traditional like heat pressure, petrochemistry, super skeptical of
biotechnology for a good reason.
Right.
There's, there's been some failures in the past.
So Where we came together, we said, was there's actually something here
is that there's this thing called an enzyme that's in pancreatic cancer
that can basically act as a catalyst.
So catalyst is used everywhere in chemistry, and this turns
out pancreatic cancer has the world's most efficient catalyst.
And so we teamed up and we realized that.
There's a better way to make these chemical products.
People just haven't had the opportunity to see it.
And so we were just in a fortunate position where, the stars kind of
aligned that I have this instinct on, hey, there's something here.
Sean has just the hardcore intellect of knowing how to make it real.
And together we just had this passion for like making something happen that
like, I think when you meet Sean and I, the thing that you'll probably pick
up quickly is that like, we're just relentless, like we will not stop until
we figure out like how to make it work.
And I think the two of us together kind of fed off that energy.
And we realized there was like a big problem in the market where it was.
Yield is the issue, right?
If you look at the whole point of the chemicals industry, you want
to go from feedstock to product as efficiently as possible.
In certain respect of the industry, that yield can be 50, 60%, which is good.
You make money, right?
You're making 20%, whatever it is.
But then the question becomes, well, what happens to that
other 40, 50% of your feedstock?
Either it can go into the environment as an emission.
Or it can be reused in your process.
But when you reuse it in the process, it costs energy.
It costs money.
It costs labor.
So what we said was, is there a world where we can take this enzyme from cancer
that has never been touched before in the context of chemicals industry and
put it in effectively a chemical reactor.
So instead of like trying to build like a biotech facility, we said, you know what?
Let's keep it simple.
Let's take it out of the cancer.
This little enzyme catalyst.
And drop it in a chemical plant and see if it works.
And obviously it didn't work completely well the first time, but it worked
well enough where we were confident that like, Hey, if this is a problem
that Sean and I are passionate about, I think we can solve it.
So that was really what got us to where we started the company.
It was less about like.
Our insight in the chemical industry, it was more about like, just his
passion to solve the problem.
And I think that's
Victoria: That's cool.
Gaurab: yeah, that's kind of why we did what we did.
Victoria: That's very cool.
And I, and I actually like how you relate the, the enzyme that are naturally
occurring in our bodies elsewhere.
I, a lot of times when I try to describe what a catalyst is to somebody who
has no idea, I'm like, you know, have you ever baked bread?
You know, think of
yeast.
Yeast is a catalyst.
And I, and I think we boil it down to really simple things.
Uh, we can demystify it,
Gaurab: Yes.
And it's not scary, right?
Like it's, I think the other beauty of, of why we started Solugen was
we wanted to bring people from different backgrounds, right?
I I'm not a chemical engineer.
Sean's not a enzymologist, but that's the environment that we're trying to create.
Victoria: Right?
That's very true.
It's a, it's an industry that, um, it's chemists and chemical engineers and
kind of traditional hard scientists,
Gaurab: Yeah,
Victoria: Continuing to work and develop and grow.
Gaurab: exactly.
Victoria: Let's talk a little bit about Solugen.
And what the company is and what you guys are really doing.
Gaurab: Yeah, absolutely.
So really going back to how we started, we started to think
about things in terms of yield.
So if you look at what we're trying to do at Solugen, we believe that to
decarbonize the chemicals industry is a nearly impossible task.
And I'm saying that with the, with a company whose mission is
to decarbonize this industry,
right?
Not like steel.
It's not like cement, right?
If you look at steel or cement or the big industrial emitters,
they're one product, right?
It's a steel, steel is steel, but in the chemicals industry, you're
talking about a slew of product.
You're talking about thousands of different SKUs, each with its own
unique quirk and how it's manufactured.
So what we said was, let's create a framework by which we can actually
think about this decarbonization.
And there's really three buckets in that framework that we break it down.
One is we believe feedstock and circular feedstock are going to be key.
This doesn't just mean bio based feedstock.
Imagine there was oil that was going to be burned for fuel value.
But what if you can reuse that oil for making chemicals, right?
There's all these like ways of recirculating, recircularizing
different feedstocks to actually drop carbon intensity.
So that was number one.
Number two was more efficient processes.
So this goes back to our earlier conversation on yield.
Where we believe that for us to have a decarbonized process, you
need the highest yield that, you can technically, get and so that's
where the enzyme technology came in.
And the third was local supply chains.
So we are quite convinced that being close to the customer and being close to
your feedstock are really the things that are going to matter to this industry.
Cause.
Otherwise you end up being in the same problem as what the
steel mill industry was, right?
There was these massive steel factories that created steel that had to be
shipped thousands of miles away to the end customer Until a company
called Nucor comes along and says hey, what if we miniaturize this?
What if we were able to make smaller versions of these factories and put them
close to either where the feedstock is or where the customers consuming the product.
So we, that's the same idea that we had was like, well, what if you can
create chemical mini mills instead of creating giant massive facilities
today?
And we did that.
So it isn't, yeah, exactly.
Yeah.
Victoria: That's cool.
And in fact, what's interesting with this, and I've had this conversation
with others, this idea of you know, when you look at the length of
chemical supply chains so much of the emissions, the environmental
impact is actually on logistics.
Right?
And so.
The shipping industry, the logistics industry is doing a lot
of work to try to decarbonize.
But this idea of being, uh, uh, close to where, you know,
Gaurab: I think close.
Victoria: the consumption is, close to where the feedstock is, is unique.
You know, I was involved in the very early stages of Shell Pennsylvania, which is a
new asset that Shell has recently started up for polyethylene in, in Pennsylvania.
Part of the, part of our logic and the value proposition was.
Being close to the customers where the consumption was and close to the
feedstock and cutting out logistics.
Now that's on a massive scale because the other challenge that the chemical
industry has, of course, is an unwavering view on what economies of scale
are right.
And this, and this.
Bigger must be better.
There must be more economies
in a bigger asset.
And so we see this today.
We see certainly when you think about the ethylene value chain, the
assets are getting larger and larger.
And, and there's a bit of a competition to get to who can build
the biggest, most efficient asset.
Which may or may not be the long term solution.
Gaurab: Yeah.
And the thing is like, that's why I think it's going to be so hard
for us to wrap our heads around.
Like, what does decarbonization mean in this industry?
Cause every product is so different, right?
With ethylene, you actually might really want massive scale.
Like to your point, that's where you get your economies of scale.
The problem then becomes Are we pushing volume onto customers
or are we pushing quality?
Right?
So if you look at like the way a lot of commodity chemicals are set
up, it is a volume game, right?
But by definition it's a volume game.
But what if there's a different way of looking at how we deliver
chemicals instead of saying, Hey, I want to push volume.
What if there was a world where we could say, Hey, I want to push performance.
I want to figure out how my product or my set of products can actually drive
more profit for you instead of saying, Hey, I just want to sell you volume.
That's where like Solugen is.
I think we're growing up in this era where like chemicals as a service
or like chemical leasing all these cool new ideas are starting to become
hot and we're starting to realize that there are technologies that can
be part of that story of delivering performance instead of just volume.
Victoria: and, and, and that's honestly, that's the
specialty chemical story, right?
And that's where we're specialty chemical companies focus is less on less on
volume, more on value and performance.
So what you guys have obviously figured out an array of products that can
be produced from your technologies.
Are there any particular areas that you're focusing in on?
Gaurab: Yeah.
So the way that we do it we have.
We have four core values at Solugen.
One key core value is think big, act now, which is, like, have
an insanely big dream, right?
Never give up on that dream, but what are the, I call it the stair steps or the
idea maze, where it's like, what are the little things we have to do incrementally?
To get to that big vision.
And so the way we look at it is we make products today.
We make two key products.
We started with hydrogen peroxide, as I said, but now really are the bulk
of our revenues now coming from two different acids, a gluconic acid and
glucaric acid, and what we've said here is that we don't just want to be a
glucaric acid or gluconic acid company.
We're doing that because we see it as a critical step in the way of
decarbonization journey, where that work that we're doing to sell the gluconic
and glucaric acid into these end markets.
So wastewater treatment.
Concrete agriculture.
We sell the application, the performance benefits.
We think those are critical to cashflow the platform so that we can go after the
bigger meatier problems like plastics, but you're not going to do that overnight.
So our approach has been like, I mean, it's not surprising.
This is what people have done in the chemicals industry for years is we create
products that have clear demand signal where we can have a performance advantage.
And then once we can cash flow that product, we reinvest it into
the platform so that we can go after the bigger molecules like
plastics and things like that.
Victoria: Yeah.
You start, start small, sell out, sell up and keep
Gaurab: relevant.
Exactly.
It's developing.
Victoria: Cool.
So where are you guys in the commercialization development stages?
Because when I think about, It's cellulogen certainly been in
the public eye for a long time, but I think the question is
always, how commercial are you?
So, so where would you guys categorize yourself?
Gaurab: Yeah.
the commercialization journey for us maybe I can just tell
you very briefly how we started.
We started selling peroxide to float spas.
So float spas, this is bizarre.
There's these like isolation tanks where you just sit and float
Victoria: Oh yeah.
Gaurab: 25 percent salt.
They use peroxide to clean it up.
So what we said was, Hey, our first product is peroxide.
There's no way we're going to compete against the big industrial guys.
So we started very commercial first.
Just servicing a small niche group of customers the best we could.
So we sold, we had 80 percent of the market share by 2018 or something, which
it wasn't like a huge number, but it was a profitably large number for us.
And so then that was really the philosophy with which we
approached commercialization.
Which is let's keep scaling up, but find customers that we can
delight at every single scale.
So we've got three facilities.
Now we have a Houston facility.
That's like our marquee facility that supports really in a 200 mile
radius, the different customers and wastewater energy and construction.
And we've got a second facility in West Texas, Lubbock, Texas.
That facility was specifically set up just to service produced
water and the energy sector.
That's a huge problem that's happening is when you drill for
oil, you're not just drilling for oil, you're getting a lot of water.
And so for us, our products were suited just like the float spot to
clean up that water really well.
So that's where our second facility is.
And now we just broke ground on our third commercial facility in Minnesota.
That's right across the corn, uh, belt.
So that's a perfect area for us to distribute.
So I'd
say where we are commercially, we've got three commercialized products at
scale growing revenues fairly rapidly.
But we want to keep launching products every 18 months using platform.
Victoria: Cool.
And there, and it sounds like they're primarily water treatment products.
What else is that a good
Gaurab: assessment?
That's where we're focusing a lot of our attention because we see
that as one of the fastest growing needs in the chemicals industry.
Especially if you look at like what's happening with semiconductors and
a lot of the manufacturing that's being on short in the U S we do need
to think deeply about, well, how are we going to handle all that water?
And so we'd rather have that be our chemistries than other chemistries.
Victoria: The path to commercialization, as you know, is not straightforward.
There's always been a lot of great scientists and innovators that
have identified molecules that frankly never get out of the lab.
And it's possible that you guys have some molecules that
may never get out of the lab.
So we'll see, right?
I mean, I'm sure there's, that's possible.
What's really the key enablers though, when you think about the enablers
of commercialization for Solugen.
Gaurab: So where we are again, we're small, right?
Like we're still tiny company in the scheme of this industry.
So the advantage we have is really getting to know what
the customer's pain points are.
And so we took motivation from polyethylene.
So basically HDPE, it didn't start as, as we know, HDPE today, right?
Like in every single product in the world.
It started off in the modest hula hoop market.
So basically, when it first kicked off, hula hoops were metal, right?
They're heavy.
It was hard to really get things going.
And then the folks that made this HDPE said, well, what if
we can make a lighter hula hoop?
Customers loved it, and that's where they started.
They started not at, hey, what's this like crazy great ambition?
They started a pain point that they knew that their product could solve today.
And then when we look back, HDP is one of the biggest successes
of the chemicals industry, but it
started off with a point, right?
Like it was a toy.
And so that's really like the, it's a much more, it's a slower strategy, right?
Where it's like, I want to first make sure I'm solving the pain
point for a hundred people.
And then really nail that pain point.
And then, then we can start going and attacking bigger and bigger problems.
So that's really the commercialization framework.
It's very simple.
What is the problem?
Can we solve it?
If we can't solve it, what do we need to figure out how to solve it?
Victoria: Cool.
So, so you talk about Solugen being a very small company and yet you
know, you've currently, I actually thought it was a billion dollar
valuation, but you're at a 2 billion
Gaurab: Yeah.
Victoria: valuation, uh, significant venture capital
investment, lots of media attention.
How do you reconcile this?
I think it's,
Gaurab: Yeah.
Victoria: you know, how does a small company have a 2 billion
valuation will be one question.
how do How do you grow into this expectation?
And I guess maybe when do you grow into this expectation?
Gaurab: Yeah.
This is where, um, we take a very, you know, like I agree that there's a lot
of, a lot of media attention on Solugen, because people want this to succeed.
Right.
People want cleaner chemistry, but you have to divorce like what people
want with what is best for business.
So like what's best for our business
is credibility and proof points.
We have this phrase called the two great filters at Solugen.
The first great filter is, does your technology even scale?
Is it real?
Right.
And so we've crossed that filter with, I think, pretty good grades.
Now the second filter we're coming to is great.
Does this thing scale into a massive business?
That's the second great filter.
And where we are on that, I think.
The biggest win for us, actually we announced it today, was the Department
of Energy's loan program, office loan.
So this one is, this was a 20 month diligence process where we had
the world's leading experts in our technology and markets come in and
really look under the hood at Solugen.
Every single customer contract, every single operating parameter on the
plant, it was diligence to death.
This was what we consider our second great filter, which was, okay, great.
We know the technology works, but does it work?
And does it scale up in such a way that we can build a massive business out of it?
The success of getting that department of energy loan program office loan.
This is the one that Tesla got for the Fremont facility that's
really when Tesla took off, right?
Is if you
remember it.
That was their inflection point.
I suspect we're in a similar inflection point right now, where, because we got
this loan and we're executing on this plant, I do believe that there is a chance
that Solugen will be a pretty big company.
I don't know how big, but I think that there's something
here that no one else has.
And that gives me the confidence to think through that there are markets
that we can go in very quickly.
Victoria: Yeah.
So first of all congratulations on getting that.
I know that's there was a lot of work for you and your team to, to get the
loan and not just, I guess, and it's not just about getting that DOE loan.
It's what it signifies.
Right?
Gaurab: It's the, it's basically that stamp that says like,
wow, this is real, right?
These are real hardcore projects that have real return on invested capitals and
that means we're no longer that startup, that's bright eyed and bushy tailed.
We have a lot of work to do now.
Like we have to chop a lot of wood to get to where we want to get.
Victoria: So you're in the process of building the Marshall facility, which
I guess is what the funding is for.
What's the timing of startup when you think about that?
Gaurab: Yeah.
So right now we're pegged for a first half of 2025.
However the way the DOE loan works, there's like a lot of,
it's a very proper loan process.
Right.
And that, if you know these loan processes, they can sometimes be a little
slow just from an administrative side.
So we're anticipating a 2025 first half, but depending on how the DOE
decides to like work with us, it could extend to later in 2025 as well.
Victoria: Why Minnesota?
So in fact, when I first talked to somebody from your team,
they said the Marshall plan.
I was thinking Marshall, Texas.
I don't know.
Marshall, Minnesota.
So why Minnesota?
Cause that's not a typical place for a chemical facility.
Although obviously we've got 3M
Gaurab: Yeah.
Right.
Yeah.
It's not where you, yeah, it's exactly like, it's a great question because
the way we thought about this was goes back to our pillars of decarbonization,
which was one is feedstock, circular feedstock, two, can we be in a
place where our process actually shines in terms of the efficiency?
And then three, can we be close to or near end customers?
And so if you look at.
Marshall, Minnesota.
We did a full bake off, right?
We looked at other areas in the Midwest as well.
We ended up deciding on Marshall because it was right across
a corn processing facility.
So our feedstock is sugar.
So we partnered up with ADM to build a plant.
There's literally a pipeline of sugar that comes from their plant to our site.
And on top of that, the conditions, like it's actually slightly cooler.
There during the summer months, which is really good for enzymes, like enzymes
love when it's a little bit colder.
And then the third piece is a lot of the customers are there.
So if you look at the agriculture sector wastewater is a huge one in agriculture.
A lot of people don't realize a lot of the farms and things.
These are some of the biggest wastewater treatment customers in the world.
And so that's where we, we focused in.
So it hit those three pillars of our, of our framework very well.
There's something to be said, just like more on a personal level.
There's like a, in Minnesota and in the Midwest, there's still
that culture of like, let's do it, the American dream is real.
Can we build faster than anyone else in the world?
That pride is still there.
And it's, it's awesome to be around.
Victoria: Yeah.
Well, and so that's actually a good point.
Like if I think about workforce, so, you know, I'm actually
from, I'm from Illinois.
So it, somewhat adjacent to Minnesota corn country grew up on a small farm,
uh, surrounded by farm fields and now a few solar farms, which is always
an interesting thing when we see, traditional farms get converted.,
Gaurab: Yeah.
Victoria: as, you know, pros and cons there.
But one of the challenges that many chemical operators talk about is
really just workforce, having the right workforce, not just to build
the plant, but to operate the plant.
How do you see this happening?
Number one, how, I guess to the extent that you can tell us, How many
people do you expect to employ there?
And how has your assessment of workforce been?
Gaurab: Yeah.
So this is the biggest question.
Just as an aside, like, I think that's going to be the bottleneck for
all this climate technology stuff.
I think it's amazing technologies, but no one cares.
You can't make it.
You need people to make this stuff.
So this is where we spent a lot of time.
So the Marshall site.
Construction wise will be about 200 people.
Steady state will be roughly around 100, 60, 100 people.
So it's not small, but it's not big either.
So it's a perfect microcosm.
But what we did was we invested heavily in workforce training.
So we actually have a program in Houston where we bring, it could be a farmer.
It could be honestly anyone that has that mechanical aptitude.
We bring them into Houston.
They do a six month rotation.
To our plant in Houston with the operators, and so they learn everything
about the operation and the culture.
So like, that's the
second part that's like just as important.
It's like, what is that culture vibe?
What's the cadence that like we move at having them do that training program
for six months has been really valuable.
And so we do that.
We actually have a partnership with some of the local community colleges
in Houston and in Marshall, where we just have students come through
and we have them trained through our biomanufacturing program, just to get a
sense of this is not that complicated.
Yeah, it's like new technology, but at the end of the day, it's just vessels, right?
Like, we could figure out vessels.
The thing that's hard to figure out is, Reprogramming cultural mindset.
So if you look at what traditional, a lot of traditional, like chemical companies
are, have been around for a while.
So there's never been
this urgency, you know, it's been steady state.
Let's keep the things going, which isn't how it should be.
However, we're, we're in a different challenge where we're competing,
not just on the technology, but also establishing ourselves commercially,
which means the culture has to be slightly different.
And that starts with the operators.
The operators have to have this, I call it like this Relentlessly resourceful.
That's kind of the description I have for it, which is like, something's going
to break, something's not going to work.
There's going to be a miscommunication no matter what, what are you going to do?
I don't care that the problem is there.
How are we going to solve it?
So like really getting operators trained in that mindset of we're going to solve
these problems, even if it's like a technically very challenging, which is
different than just learning how to operate a yeah,
Victoria: it is,
different.
And it's interesting because 30 years ago when a lot of the chemical technologies
that we take for granted, we're starting up, there was that whole resourcefulness,
like you just have to figure out it's not going to be operating
at 95% it's operating at 70%.
You've got to fix it and adapt and figure it out.
And and so I think some of that was there.
And then, it evolves out because you're trying to standardize
processes, yeah, ensure that you have steady state operations, et cetera.
Gaurab: yeah, yeah, yeah,
Victoria: I love this relentlessly resourceful.
I think that's great.
how you balance though, being.
Hey, I think I'm solving a problem, but as it turns out, what I'm doing is
screwing something else up where I don't have the authority to make that change.
How do you find that balance between giving people enough leeway to be
resourceful, but also keeping them a little bit contained because there needs
to be approval processes that needs to fit with the rest of things, et cetera.
Gaurab: I can maybe just give you like a history of what we've gone
through and you can see kind of how we've learned where we are today.
So we started as kind of like.
I'd say like a very much more, chaotic, I guess, when we started the company.
Safety was always number one, so it was a lot easier.
It's easier to orient towards safety in the early days because
there's not as many people.
As we started to grow, we went the, we swung the other way.
We said, you know what?
We're going to go process heavy.
We're going to process everything.
Everything is going to be an SOP, et cetera, et cetera, right?
And that slowed everything down to a halt.
Like it just nothing because we thought we were playing corporate, right?
We are, we're a company now.
Like we have to have an SOP for, you know, X, Y, Z.
Now we realize it's 60 40, where it's like 60% of the processes
are absolutely critical.
40% of the processes should be malleable because they don't have
direct impact on safety outcomes for my people, they don't have direct
outcomes for throughput or yield.
Those are the areas that we should be experimenting heavily with.
That's 60 percent of process that we need for safety culture that we cannot change.
And so that's kind of how we've come to this, that's part of the training is
like, what is part of that 60 percent and what is part of that 40 percent?
Victoria: Makes sense.
Makes sense.
And you have to find the balance, uh, to, to
Gaurab: Yeah, we messed it up.
We messed it up a few times.
Thankfully, no safety issues at all, but still it's just an efficiency thing.
Yeah
Victoria: mean, obviously you guys are learning something new every day, right?
Gaurab: and I think that's, you know, going back to like what is
relentlessly resourceful at Solugen.
It's this idea of like knowing how to learn quick.
Yes.
Victoria: Yeah.
Great.
So let's talk a little bit about customers and markets and you touched
on this, I think a bit in terms of, have you thought about it, but how have you
really engaged your customers really
Gaurab: Yeah,
Victoria: gain learnings and create buy in?
Gaurab: so that's, that was like the toughest thing in the beginning, right?
Cause like we're an entity that no one knows.
So what we did was we took a very consultative approach where like,
just forget that we're selling a chemical just for a second.
Like I actually tell the team, like, that's not what we're doing.
We're not selling chemicals.
Focus in on like, do we understand the customer's process?
From beginning to end, uh, in terms of how they're actually using products.
I'll give you an example.
With Champion X, a Champion X is a great partner of ours.
They're in the energy sector.
They used to be.
What was it?
Ecolab Nalco Ecolab, and they spun out as Ecolab subsidiary.
Then they became Aperture, and now they're ChampionX, and they just got
a buyout offer from Schlumberger for seven billion, something crazy, right?
So what we did, yeah, what we did with them was, We said, first, let's go visit
their plants instead of going and saying, Hey, let's talk to the business people
and the sales guys, let's first talk to the people who are in the operating
line and figure out where their pain points along their day to day workflow.
So when we looked at how they're actually using the chemicals and blending it
and creating their final product.
It wasn't so much about the sustainability or the price or any of this stuff.
It was about operator reliability.
So the problem was the product that they were using wasn't our product.
It was a competitor's product.
It was in a powder form.
And the problem is the spike in demand for this product
was in June, July, and August.
It's some of the hottest months of the year.
And if you're dealing with powders in that heat as a operator,
you have to wear a respirator.
So you wear a respirator and you know, a hundred something degree heat
to deal with this powder product.
And it's just a nightmare.
And so it hits their efficiency.
There's a lot of downstream effects.
So what we said was, can we solve this operator's problem?
Forget like what our technology and all this stuff.
So all we did was say, Hey, we can make that product, but we can make it
a liquid and we can ship it to you.
At whatever dose you need so you can put it in your lines.
All of a sudden the operators were like, please, yes, thank you.
Like, this is all we want.
And so that was an example of, it wasn't about the amazingness of the
technology or whatever about the team.
It was the team's ability to say, Hey, there's a key bottleneck that no one's
talking about in this process because the sales guys aren't on the process for it.
It's just the
nature of a lot of these businesses and to no fault of their own.
But if you force yourself to actually get into the process and the operations,
you find so many more opportunities to actually introduce solutions.
So that's how we'd like to go about doing commercialization
is much more consultative.
And I guess understanding the pain point deeply.
Victoria: Yeah.
I love that.
And, and in fact, and I talked to folks about this, that.
A lot of times the chemical industry has been trained to sell on spec.
spec Right?
We all value our specification.
Does it meet the quality target?
It's got the right density.
It does whatever, and that's great, but specifications are easily replicated.
But getting to the point of understanding, well, what else?
What are your customers value about what you're delivering, about how they're
using the product, about consistency.
In your case, you've discovered something about the form that the product comes in.
Uh, that's where differentiation and value occurs.
It's not, frankly, it's not in the product itself.
Gaurab: Exactly.
And so like, it's, that's what I love about this industry
and I saw my dad do this too.
So my dad started an oil fields chemical company.
And so I, I was there every weekend blending product for them.
And what we saw was people only cared about how this product
affected their lives, right?
The people that were using it, the people that had the buy in.
What are the things about this product that will make them happy
and even get them a bonus like what's going to make them succeed?
So that's like really the framework that we've had at Solugen was like
forget about the volume that we have to produce, forget the product, just go in
and figure out what is that pain point.
And so a few other examples, I'll be brief on this one, but like wastewater,
we found a huge customer who had a big problem because they had to bring in like
a parasitic acid into their facility, which is a lot of work to handle parasitic
acid, but they ran through so much of this stuff that it became a huge headache
to deal with the logistics of the PAA.
Okay.
So what we said was, well, what if we had a synergist that you can
use in your system that allows you to less, use less PAA and a half
less to worry about the safety.
And that turned out to be a value proposition that in itself.
And so like every case is unique in this market because we're going and
solving that and problem, but it turns out there are certain patterns
that just keep repeating themselves.
And so that's,
that's how we,
Victoria: I mean, that's great.
And in order to scale, you have to find and leverage those patterns.
Gaurab: exactly.
And so that's what I think we've been successful at is.
Going slow in the beginning to really understand, like,
where are the real pain points.
Once we can identify the top four true value propositions of products, that's how
we go scale that product line in that way.
Victoria: Makes sense.
So Let's talk about people and teams.
And you've talked a little bit about the culture.
Um, and I've worked with companies that have, gone from technology to
commercialization and there's always an evolution, but when you think about
your people, how has your team evolved?
Gaurab: yeah.
Man, so much.
So much.
I think I can reflect on this kind of as part of like me and Sean's
growth journey as founders as
well.
In the beginning we were like, we're scientists we're not, the commercial
guys, we're going to bring in like really seasoned commercial people
to do this, which very seasoned in like a late stage company is not the
same as success in the early stages.
So in the early days, we just brought in a lot of folks that you know, just
had experience at big companies thinking that, like, they'll help us create
the process and things like that.
What ended up happening was it was a cultural disconnect between the problem
that the customer was facing, what we saw and what actually needed to happen
commercially for the customers to succeed.
So what we were too far apart from the end result.
Now where we are culturally, Sean and I are involved.
Largely in most aspects of the business, not in a micro management type of way.
We have this phrase we call miso management, which is like, we're
not the 30, 000 foot managers, but we're not going to micromanage you.
I want to know great, this is
the strategy of what we're doing, but what is, are we aligned
on why these are the goal?
What I found is once you build a team around the alignment piece.
Magic starts to happen, right?
Because when you don't know why you're doing something, or if you aren't sure if
this is aligned with what your team wants, you end up going in the wrong direction.
So now what we've built is really a team that feeds on this alignment idea, which
is okay, we're doing these experiments.
We're running this, commercial test.
Is it aligned with the goal of the company?
If yes, keep going.
If no, we have to pivot away from that.
So it's like this constant, like readjustment.
And so the people that we bring onto the company now.
We overemphasize this idea of like being quickly adaptable to changes and not
getting emotional about Hey, I've been working on this for a year yet, but the
customer's needs have changed, so we have to kind of go where the customer is going.
So
yeah,
that's, that's a very different mindset for us.
Victoria: And what's the demographics of your company when you think
about, um, if you even just think about age or years of experience.
How, what does that look like for you guys?
Gaurab: So I did this analysis.
We do a biweekly people kind of analysis.
So I did this very recently, bimodal.
So basically what you have HY is.
You've got really a lot of folks, like straight out of like graduate school or
five years in their career, really kind of young and hungry figuring things out.
And then you've got Ad Solugen experts.
So people who are just super experts in the field.
And what we found is like, we'd like this mentorship concept, which is we
pair the people who have the experience with the people who are newer so
that they can figure out that you don't have to figure everything out.
Like some of this stuff has already been solved for you.
Right?
And so that pairing, it's kind of like a reflection of our grad school
days where in grad school, you start a fresh PhD, but you've got like the
postdocs and you've got your mentor who's experienced to help you kind of
figure out like how to solve the problem.
And so that's really like the demographic balance that we try to hit.
Victoria: And I'm guessing you did not really anticipate being CEO of a company
that's got a 2 billion valuation, when you were starting on this journey, how
have you learned to evolve as a leader?
Gaurab: I think the biggest thing is ego.
I think the.
Starting out, you just think you're hot shit, right?
Excuse my language, but like, you know, when you start out,
you're like, Yeah, we all do!
Which is great!
You need that level of energy.
But the reason like we set up a solution where we have the more experienced
people mentoring is because we want that really when I say like mentorship,
I just mean getting rid of ego.
That's what I found is like the people who are truly experienced, they are
like completely egoless about the final outcome because they want what's
best for the company and the customer.
So I think what I've learned and still learning to be frank is like, this
ego piece of the puzzle, just being able to acknowledge that that is a
significant problem if you're kind of in, auto mode, and you're just driven
by ego, you're going to do things that aren't best for the customer.
So, having the more experienced people around me to be like, look.
I know that you're passionate about this, but your ego is driving this decision.
So let's take a step back and see well, what are the, what
are the truths of this problem?
And does your ego need to even be involved in this conversation?
And so, that level of self awareness, I think, is what's
really changing for me and Sean.
And it, it was a painful process.
Victoria: Is there a leader that you model yourself
Gaurab: Uh,
Victoria: that you say, I, I would like to be a leader like
this or a combination of leaders
Gaurab: Not really.
I wish it would make my life a lot easier.
I think for us it's more of what does the company need at the moment and
in the next, 12 months for us to be?
And so what we do is we study companies that are in that
phase of their life cycle.
So there's a lot of companies that are in this, weird, inflection point period.
But there's a lot of people who've gone through that in their career.
So we spend time with them to figure out like, well, where did you guys go wrong?
And fundamentally, like, the biggest issue is always ego in, in, in these things.
So anyone who can teach us how to be less self centered, ego driven,
I think it's the right answer.
Yeah.
Victoria: that's tough because I said, you know, we're all egocentric.
In our own way, right?
We're all, I mean, that's just human nature.
We see the world through our own eyes, with our own lenses.
We are the center of our own universe.
And it's really hard to break some of those paradigms and see
things from other perspectives
Gaurab: And the worst is like when
Victoria: how we're wired.
Gaurab: not how we're wired.
And the worst is when that thinking starts to bleed into
the customer interactions, right?
Because the whole point of a customer interaction is, am I solving the problem
that is their problem and not my problem?
And so I think that was like this whole, like, I call it like
commercial compassion, which is can you go in and really
understand what the customer needs through that process.
And that's hard.
It's really hard to do.
Yeah.
Victoria: Listening without bias, which is hard
to learning for all.
I will say I try that, and I've had the opportunity to really speak and
learn and listen from a lot of leaders like yourself and others and staying
open, listening just to listen.
As opposed to with your own agenda and bias it's a challenge.
It's a skill.
It's a muscle.
You have to keep working.
Gaurab: It's almost always you're in what you thought was the way this thing
is going to go is like never, right?
Things are just gonna go the way that they should.
Victoria: It evolves.
It evolves.
So my final question here for you is, what's your advice?
So what's your advice to young doctors and scientists
Or, young leaders anywhere that are, that want to pursue a path of
entrepreneurship on a large scale?
What advice would you give?
Gaurab: Yeah, I think, the blanket advice is just make sure you're
solving a meaningful problem, right?
Cause like you're going to be, I thought I was going to be doing
this for maybe two or three years.
Like when I was like, okay, I'll do this for two, three years, license out
the technology and then go back into academics and medicine or whatever.
But now it's been almost eight years and I'm still doing the job.
Right.
So I think it has to be something worth kind of pushing through 10
years, at least 10 years for it.
Otherwise it's just, it's, I mean, that's okay if you don't want that.
But the reality is if you really want to build something of meaning
and generational value, I think, the first 10 years is really where
you see where it's going to go.
And then you, after that first 10 years is where you can actually
start building, like what, the legacy or the thing is going to be.
So where I'm
at
Victoria: other hand, based on what you said, that you thought this was
going to be two or three years, if you had known it was going to be
10 years, would you have jumped in?
Gaurab: To be completely honest probably not
probably like if I had to go back now and be like, look, man, like I love it.
Like I love the process now, but it's only after learning more about myself.
But like, when you start that journey, you know nothing about yourself,
like you're a kid out of like school.
Right.
So you know, nothing.
And so I think I wouldn't have done it, but I'm so glad I did because the lessons.
I accelerated like personal and professional development
by 10 years, like I
guess you could say.
Victoria: Absolutely.
Cool.
Well, thank you so much.
I've really enjoyed spending time with you today.
I know others are really going to love hearing your story.
Gaurab: Thank you so much.
Really appreciate the questions and a huge fan of what you're doing here.
So thank you.
Victoria: Thank you.
I appreciate that.
And thank you everyone for listening.
Keep listening, keep following, keep sharing, and we will
talk with you again soon.
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