Green Power Conferences

Algae as serious business

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Source: Green Power Conferences

Algae as a feedstock for biofuels, biochemicals, animal feed and more is attracting significant attention, and for good reason, as the potential markets are enormous. This has lead to many new companies entering the industry, each with big dreams and big ideas. But to truly move from bench to breakout, algae companies need to focus on the business fundamentals, not just the science.

Like most businesses, there are three keys to commercialization: 1. Inputs, 2. Technology and 3. Customers. Like a chain, they all must work, and work together, for the chain to be strong. Every company will have its strongest chain and must use that as its anchor point for its business.

Inputs for algae means things like algae strain, water, nutrients, light, utilities, land, CO2, building, equipment and more. Getting the inputs right, and cost-effectively, is vital, especially when dealing with a still developing technology that is likely not to be truly cost-competitive against other fuels yet. Until that happens, keeps costs down is critical. Partnering with companies that view these inputs as waste streams or worse is a good way to provide a win-win solution for both parties. Power plants, cement factories and waste water treatment plants are all excellent candidates. Any potential sources of inputs should be contacted early on in the process and should be locked up if possible.

Technology is where most of the focus for algae companies is right now, and for good reason, as there are still significant scientific and engineering hurdles to produce algae and convert it into usable products at scale. This is the strongest link in the chain for most algae companies and needs to be maximized. First, protect the intellectual property by patents where possible. If you are licensing technology, make sure the written documents provide real business value. Many companies work with University technology transfer offices or other companies and have informal agreements about technology development and ownership. Getting those formalized is critical. Be aware that this issue is the number one thing investors will look at when deciding whether to invest.

Last, but not least, are customers. Customers buy what you produce, but only if what you produce meets their needs. Your technology can be the best thing in the world, but if it does not address a customers need, it is worthless. Locating potential customers and staring a dialogue about their needs and then tailoring your technology to meet their need is a good start.

For a new business, concentrating on what you do well and building from there is essential. Time and money are scarce resources and there are many competitors. The sooner you can get your input, technology and customers partners to agree to work with you, and hopefully only you, the better.

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