Genomatica and the new road to bioeconomy innovation

Pivots and rough patches

The advanced bioeconomy has gone through a rough patch too — occasioned by a crash in oil prices in 2014 which has finally righted itself. And a new type of company and thinking has emerged, a new approach to innovation.

Prior to 2014, for about four years there had been a significant pivot underway from renewable fuels to renewables chemicals. 

“Why make a $3 fuel when you can make a $5 chemical,” former Cobalt CEO Rick Wilson used to ask of me, and it was a good question in 2011 that 2015 would provide the answer for. “Why make a $3 fuel when you can make a $5 chemical? Because you can still sell a fuel fo $3 through the RFS program when $5 chemicals have to be sold for a dollar. That’s why. It was all about providing stability.

The authors of the Renewable Fuel Standard (who never erected a Renewable Chemical Standard, or a federal Renewable Power Standard for that matter, either) feared that the purveyors of oil & gas would crash the price of petroleum as soon as they saw a competitor gaining too much market share. The RFS was designed as a counter-cyclical instrument that would protect a renewable fuels industry during times of catastrophically lowered oil prices — and would warn oilcos from even mounting such a move through their cartels.

The fog of war and commerce

Of course, we forget. We forget that in the fog of war the element that undoes great armies is the unanticipated event — the unexpected defilade, the advent of bad weather, and so on. The troops of the 1st British Airborne Division in Operation Market-Garden in 1944 lost their drop zones because of too much flak and not enough aircraft, then saw their advance guard run into a Panzer division sent to Arnhem for rest, found that their communications equipment unable to work, then were unable to get daily supplies because having missed their drop zones, the supplies were dropped into the German lines. They lost their planned reinforcements  to a massive multi-day fog that prevented further drops.

It’s called the fog of war, but it might as well be called the Fog that Envelops Commercial Enterprises or FEVMAC, to coin an acronym that I’ll never use again. Every venture makes a multi-year plan based on the singular idea that their disruptive technology will deploy into static markets with long-term customers, loyal stakeholders, steadfast politicians, economic wondertimes, benign cartels, science-based policy, choices and a dearth of ideas from anything resembling fracking.