Moving from Nano-Ideas to Nanomanufacturing

Alan RaeFebruary 2008

TopicsWhat’s different in nanomanufacturing?

Technology development and acquisition

Commercialization issues

Some examples of products developed at NanoDynamics

Premise

90% of what’s involved in manufacturing and commercializing new nano products is the same as for any new productsThe other 10% can really trip you up

What’s different?Different

Processes and raw materialsProduct delivery• Dry products vs

dispersionsProduct use• Transient vs permanent

nanomaterials• Thinking through lifecycle

issues• Perception - good, bad or

indifferent

The SameMost process equipmentEconomicsQualification timesNeed to fit to industry infrastructureRegulationThe mechanics of bringing a product to market

Nano Inventions Come FromIndividual inventorsUniversitiesGovt. LabsSmall companiesLarge companies• Orphan projects that don’t fit due to “core competence”,

strategic decisions or size

Challenge:• Beware of products that are described as “commercial”• You need product + process + customers!

“The Valley of Death”The inventor•I have made a prototype…once•I have IP•It has really interesting properties•There is a potential market for it

The customer•I want a safe, reliable andeconomic solution that fits myneed.

Why Commercialize Any Nanotechnology?

Do you bring something other than money?Can you develop the discovery better than anyone else?Is this discovery unique and can it be protected by patents?Does the market really need this?Can you be the low cost producer?What’s the product and how do you make it?Can you manufacture it economically?Does it fit the industry infrastructure?

The VC RealityOf 10 projects• 5 will go belly up• 3 will cover their costs• 1 or 2 will pay for the effort

And that is after a rigorous selection process (10 out of 1000 applicants)Note even range extension consumer products have only a 50% chance of success!One key lesson is not to invest in capital intensive processes or there is a high probability you will be severely burned

Financing

Debt or equity• “Friends and family”• Banks• Angel investors• Venture capital funds

Need a well thought out business planChallenges• Sizing the plant• Staffing the plant• Plant design• Manufacturing permits

Acquiring the RightsAcquire a companyJoint ventureLicenseConsultancyResearch contract“Technology on the hoof”

Every deal is differentPrice ≠ sunk investmentValuation is always difficult and contentiousThe wrong agreements can sink your business economics

Process and Product DevelopmentBe sure to fund enough runway time and resources

A TOTALLY new invention usually takes about 15 years to revenue…one that fits the infrastructure ~7 years• MEMS 30 years to volume use in automotive

Patent costs ~$25K domestic…~$100K international…>$300K lifetime

“Invention is impossible to predict”?...maybe….• But product and process development can be managed• Time, cost and market verification• Gates/stages and phases (www.pdma.org) are effective and cost-effective• Spiral development (repeated prototyping – military)• Use whatever tools are appropriate - e.g. Universities for R not D

Understand Technology and Manufacturing Readiness Levels• http://www.asc.nasa.gov/aboutus/trl-introduction.html• http://www.ml.afrl.af.mil/mlm/about_manufacturing_readiness_levels.html

Verify and re-verify market pull

ExecutionUse a phase and gate process or equivalent to• Act as a checklist• Act as a sanity check

– Is the development on track?– Is the market still there?– Are the costs in line?– Do we have a product?– Do we have a process?

Your company needs• Robust product• Robust process• Robust market plan

Without a robust process, getting a manufactured product to market is more luck than skill

Do Only What You Can Do Best

Know when to outsource• R&D• Testing and certification• Export control, EPA….• Manufacture• Sales and Marketing• Licensing• Fulfilment

Don’t reinvent the wheelException – stealth mode

ChallengesMake sure your partners care that you exist –small demanding customers are a pain in the neck!• Your key ingredient will be unimportant to the

producer• You are often using it for an unintended purpose

In most cases in nanomanufacturing we are using raw materials or equipment for an application that they really weren’t designed for

RegulationMSDS alwaysTSCA as appropriateREACH etc. in EuropeIndustry Specific• RoHS, WEEE• FIFRA• UL, CE

Follow developments closely• State• Federal• International – ISO TC229 “Nanotechnologies”

How We Work at NanoDynamicsMatch up an identified market need with a new technology being developed in our areas of competence• University, inventor, other companies, internal

Preferably the technology platform has multiple applications• Silver – printed electronics and biocides• Ceramic membrane – fuel cell and water treatment• Ceramic foam – body armor and water treatment• Process intensification – “green” chemical processing, food

processing, biofuels, nanomaterial production

Incubate the project through contract or internal funding

Commercialize internally or externally• Production partners with specific skills

Moving From Materials to ProductsWe develop the materials and where it makes economic sense develop intermediates or final products

Manufacturing Development

NanoDynamics personnel designed and oversaw construction of this 100 MTPA metals plant and an integrated fuel cell production facility• Powder plant started with R&D scale system developed at

Clarkson University; unit transferred to local contract manufacturer in 2006

• Fuel cell manufacturing facility based on company research and process development

Engineering & Process Development

Development, design, & construction of combustion reaction systems for production of carbon nanotubesDevelopment and construction of process intensification rotary tube reactors for process efficiency improvementsFuel cell process and conditioning stationsModified CNC milling / lathe for production of nano-metals and alloys

Manufacturing Experience

Revolution 50 fuel cells• Fully integrated fuel cell team

– Specialty materials manufacture– Cell and stack manufacturing– Balance-of-plant design, sourcing & assembly– Quality control

High performance silver and copper powderLow cost carbon nanotube processHigh volume consumer metal-polymer golf ball

EPIK Energy Solutions - joint venture formed in 2007• 51% - NanoDynamics; 49% - Shell Technology Ventures

Fund I

Targeting applications in oil and gas exploration, production, processing and transmission. Initial projects:• Nanocement custom-formulated for demanding

applications – strength, expansion, ductility• Fluid filtration and remediation at wells and refineries• High temperature & long life batteries for down-hole

applications• Nano-ceramic and polymer coatings to extend operating

equipment life• Nano-structured steel wire for a range of applications• Nano-enabled fluorescing taggants – additional tracer

types• Disruptive photovoltaic and thin film solar materials

Using nanotechnology solutions developed for other industries, partnering with the oil and gas exploration and production supply chain

In summary

Select the right projectsResource them properlyMonitor their development rigorouslyChoose the right partnersExecute carefully on manufacturing!