AMES, Iowa – Fuyuan Jing reached for the top shelf of his university cubicle and pulled down a box of business cards. He picked out a slick and glossy card, the company logo printed in bright blue, yellow, orange, red and green.
That card identified Jing as president of VariFAS Biorenewables LLC.
Jing said his early stage startup company wouldn’t be possible without the Biobased Foundry established by the National Science Foundation Engineering Research Center for Biorenewable Chemicals (CBiRC) based at Iowa State University.
“I was trained as a scientist,” said the native of China’s Hubei Province, who has an Iowa State doctoral degree in biochemistry and is now working in a campus lab as a postdoctoral research associate. “I had no idea how to develop a startup.”
Until, that is, he entered the foundry by taking a technology-led entrepreneurship course and followed up by working with a mentor who has a resume full of industry experience.
“The most important lesson I learned is that the founder of a company must get out of the building and talk to customers,” Jing said. “That’s what I was taught – that most startups fail not because their technology wasn’t good, but because they don’t know what their customers want.”
The National Science Foundation requires the current generation of Engineering Research Centers (including CBiRC) to promote an “innovation ecosystem” by partnering with companies, research parks, venture capitalists and other innovators.
When Peter Keeling arrived at the center in 2009 to direct industrial collaboration and innovation, he didn’t think external partnerships were enough. And so Keeling – who has a long background in the plant biotechnology industry, including establishing two startups – offered to teach a course about technology-led entrepreneurship.
“We needed to start a process to stimulate students to recognize an opportunity and be more entrepreneurial in the sense of becoming an advocate for further development,” Keeling said.
The course began in 2010 and Keeling teaches it every spring to about 15 students. It’s open to faculty, but Keeling focuses on graduate students and postdoctoral researchers because that can be a good time in their careers to explore tech-based entrepreneurship.
It covers everything from “Finding an Epiphany from Research” to “Forming with University Research Parks as Incubators” to “Farming your Assets and Activities” to “The Business Model Canvas and Business Proposal,” according to a course summary.
The course was originally for students associated with CBiRC, but it has grown to include students in Iowa State’s Bioeconomy Institute and the university’s graduate programs in biotechnology.
The course and a related mentoring program have been supported by the College of Engineering and the state-funded Leading the Bioeconomy Initiative at Iowa State. To date, the foundry has mentored nine different startups. Three have gone on to win innovation research or technology transfer grants from federal agencies.
“The big thing I like about the Biobased Foundry is that it takes the interest people have in entrepreneurship and helps to de-mystify that process,” said Brent Shanks, the director of CBiRC and Iowa State’s Mike and Jean Steffenson Professor of Chemical and Biological Engineering. “Iowa State historically has been opportunistic about startups rather than nurturing of startups. This is a way to help postdocs and graduate students who are open to modifying and commercializing their technologies.”
Mentoring the founders
The entrepreneurship course identifies students with promising startup concepts and moves them to the foundry’s second stage, an entrepreneurship team that includes faculty and industry mentors. The mentoring process is based, in part, on the National Science Foundation’s I-Corps technology commercialization program.
The foundry’s program has students and mentors work their way through a business model canvas, which is based on the book, “Business Model Generation” by Alexander Osterwalder and Yves Pigneur. The idea is to help students connect their technologies to customers’ needs before attempting to write a business plan.
“Students need to be planning before starting a business plan and that’s called mentoring,” Keeling said. “So many start with a 20-page business plan. The second the plan is written, it’s wrong. It’s very challenging. It kills entrepreneurship.”
Kris Johansen, a program manager in Iowa State’s Office of Economic Development and Industry Relations, mentored a graduate student this past spring. The student had developed imaging technology and was exploring a business venture.
She and the student met throughout the semester to go over the business model canvas and complete assignments. She also put the student in contact with people from her business network who could provide feedback and recommendations.
“The foundry is extremely valuable,” said Johansen, who helps faculty and students apply for grants from the federal government’s Small Business Innovation Research and Small Business Technology Transfer programs. “The purpose is to test whether the hypothesis about what you think you want to deliver to customers is actually what customers want.
“It’s a great way to refine a business plan and product before investing a lot.”
Selling fatty acids
Jing, the postdoctoral researcher with the colorful business cards, wants to go into the business of selling different types of fatty acids and associated derivatives.
The technology, which Jing’s company has optioned from the Iowa State University Research Foundation, involves redesigning E. coli bacteria so they’ll consume sugar and produce fatty acids. The harvested fatty acids can be used as the raw materials for specialty chemicals, replacing petroleum or fatty acids from food sources as the basis for lubricants, inks, detergents, coatings and polymers.
Jing is particularly interested in using VariFAS fatty acids to produce environmentally friendly and high-performance lubricants for cars and machines.
The technology started as part of Jing’s doctoral work in the lab of Basil Nikolau, the deputy director of CBiRC and Iowa State’s Frances M. Craig Professor in the Roy J. Carver Department of Biochemistry, Biophysics, and Molecular Biology.
It wasn’t until Jing took Keeling’s entrepreneurship course that he started thinking about actually starting a company. He refined his thinking as part of the Biobased Foundry’s mentoring program.
The process was a lot like his lab work: “I made a hypothesis and then tested it by talking to industry experts. And most of the time what I thought was correct was wrong.”
After several rounds of hypothesizing and testing, he said he finally understood what kind of product would be valuable to industry and the market he could pursue.
He’s since won a six-month, $150,000 Phase I Small Business Innovation Research grant. He’ll apply for a two-year, $750,000 Phase II grant early next year.
“I want to de-risk the technology and prove the viability of our product,” Jing said. “This science and technology started in the lab, but it needs to be put in the market to benefit more people. That’s the reason we’re striving to commercialize this technology.”
Nikolau now has two postdoctoral researchers in his lab who are establishing startup companies. The two companies – Jing’s VariFAS and Shivani Garg’s OmegaChea Biorenewables LLC – are the first companies to spin off from his research projects since he arrived at Iowa State in 1988.
He said the Biobased Foundry gets a lot of credit for launching the startups.
“The program does great in terms of opening up the students’ eyes,” Nikolau said. “It helps take off their blinders so they have a more global view. It helps them see that research doesn’t just stay in the lab, and there’s an entrepreneurial opportunity for research outcomes that can positively impact societal needs.”