I Got 99 Problems but Product vs. Platform ain’t one: Introducing Microbes-as-a-Service

By Moji Karimi, CEO, Cemvita Factory

Special to The Digest

Any SynBio (synthetic biology) company is faced with three principal questions right off the bat:

1. Product or platform?

A) Product: develop the microbe, build the plant, and sell the product. The end molecule is the revenue source

B) Platform: develop the microbe and commercialize it through partnerships. The microbe is the revenue source

2. What molecules to develop?

A) Specialty: high value, low volume

B) Commodity: high volume, low value

3. What market to serve?

A) Target verticals with SynBio capability or familiarity

B) Target verticals that may not have SynBio capability or familiarity

These answers land a company somewhere on this spectrum:

It’s not that one quadrant is better than the other. It’s just about where the focus is for a given company and how they are optimizing for technology and market risk vs. their long-term ambitions for scaling up the company. So far, most of the de-risking and existing data comes from Q3, the product focus and specialty molecules (with the exception of biofuels which belong to Q4). In the past decade, startups like Ginkgo Bioworks and Zymergen have paved the way for Q1 and Genomatica, LanzaTech and Solugen are showing what’s possible in Q4. That leaves us with Q2, which is largely unexplored, not much of a surprise as it’s really hard. Biomanufacturing scale up is always hard but Q2 has an additional complication, as it is focused on target verticals that don’t traditionally have SynBio capability or familiarity. Some examples are petrochemical companies that now want to explore biomanufacturing, mining companies that now want to explore bioremediation, or oil and gas companies that are exploring microbially enhanced oil recovery. With exception of a few companies, the heavy industries in Q2 have always viewed SynBio as a tool that’s out there with niche applications but not as a disruptive force that can be integrated with their business. Since this SynBio infrastructure is lacking, a typical approach for developing the microbe and licensing it to heavy industries in Q2 won’t work the same way as for Q1 clients.

There are also intangible barriers for unlocking Q2. The existing biomanufacturing ecosystem including investors have already formed a mental model and bias based on the past data whereas Q2 entrepreneurs are trying to paint a different future that may not be an extension of the past or present; so naturally most investors decide to stay on the safe side and wait for the market to reveal what is working in Q2. This creates a valley of death which can only be filled with sweat and tears of entrepreneurs who persevered, bootstrapped, and de-risked the early applications enough to start to get the rest of the ecosystem onboard. But the question still remains, what is the right business model for Q2 and who is going to pay for it? 

MICROBES-AS-A-SERVICE (MaaS)

Q2 is home to heavy industries clients like Oil and Gas, petrochemicals, mining, etc. who really haven’t had exposure to SynBio and as mentioned don’t have a mature internal infrastructure to be able to independently develop and scale SynBio-based solutions. So, they have been left with the option to just buy the end biomanufactured product from Q3. As clean, low-carbon, and bio-based products gain traction in the market, traditional players will be on the outside looking in as those that brought these technologies to market end up owning all the valuable IP.

What’s next for SynBio in heavy industries?

The need for sustainable solutions as part of low-carbon energy transition is driving Q2 clients to explore SynBio solutions. This goes beyond just buying products from Q3 and -for the reasons mentioned earlier- they can’t just license microbes from Q1 companies. They either have to start an internal department focusing on SynBio, buy companies, or collaborate with other companies, universities, and research institutes such as national labs to develop the solutions they need. What does a Q2 client need:

• Low energy-intake biomanufacturing
• Decarbonization solutions
• Scaleup guidance from lab to field

MaaS provides a flexible business model for deployment of SynBio in heavy industries. This is done by implementing end-to-end service from development to deployment of custom engineered microorganisms, offering various levels of service from licensing of microbes to full biomanufacturing process support. This flexibility is a must for heavy industries to adopt SynBio as they ramp up their comfort level.

As a result, next generation SynBio companies can partner with Q2 companies and apply the latest SynBio methods—that are already disrupting other industries—to reinvent the heavy industries towards a sustainable future.

There is also a lot to learn from how the original Software-as-a-Service has evolved (summary below) throughout time, leading to a thriving ecosystem with software providers and end users. For comparison of SaaS and MaaS, think of programming as genetic engineering and software as the microbe, the completed package is also the “app” or the application which is a biomanufacturing plant. The big difference and the elephant in the room remains to be the capital intensity of scaling up biomanufacturing. This was noted in a previous Biofuel Digest piece titled: “The “Coming Apocalypse:” Will Industrial Biotech Flourish or Flounder?”. MaaS provides the solution by creating a framework for systematic scale up of SynBio with a collaborative model. In this case, SynBio companies develop the microbes and make them available to the customer along with the support needed for commercialization in terms of microbes, people and specialized equipment.

History of SaaS. Reference: https://www.process.st/history-of-saas/

The time has come to bring nature-inspired and sustainable methods of SynBio to heavy industries to help with their decarbonization efforts while creating new revenue streams, made possible by the power of biomanufacturing. This is no easy feat and as much as it’s about scientific breakthroughs needed it’s also about business model innovations such as MaaS.

In the next pieces, I’ll cover another powerful SynBio trend to be executed with the MaaS model. That is in-situ biomanufacturing where enhanced microorganisms are deployed in the field, eliminating the CAPEX intensity of building biomanufacturing plants.