Christopher Ehlert Łukasz Czekański Leily Javidfard

Inês Rocha Stéphane Vranckx Aleksandra Zielińska

Final Evaluation – Spin-off in Chemistry

Our know-how: Nano-encapsulationOur know-how: Nano-encapsulation

• Large variety of potential applications, including cosmetics

• New (unpublished) results from REQUIMTE (Porto University)

• Completely safe / bio-compatible

Similar patent: http://tinyurl.com/patentA1 (European Patent 1034839A1)

Our product: Spray-on perfume nanocapsulesOur product: Spray-on perfume nanocapsules

• May be used on clothing or directly on skin– Safe on contact and by inhalation– Doesn’t stain fabric

• Delivers perfume:– Gradually during the day thanks to natural friction and

nanocapsule permeability– Whenever desired by gently rubbing the skin or fabric

Our market: Brazilian middle classOur market: Brazilian middle class

• Biggest market for cosmetics 6029.5 million US$ and growing

• « Social media capital of the world »(> 90 million regular internet users)

• Strong disposition to buying onlineOnline advertisement and sales

• Large 20-45 middle-class market willing to pay ≈100 € per 50 mL of perfume

http://tinyurl.com/cosmeticosbr « Brazil is already the largest fragrance market in the world », Cosmeticos.br (2011)

http://tinyurl.com/marketingbrazil « Breaking into Brazil », Laura Snoad, Marketingweek.co.uk (2012)

http://tinyurl.com/socialmediabr « Brazil: A Social Media Marketers' Gold Mine », Christian Arno, Socialmediatoday.com (2013)

Our modelOur model

• However, high Brazilian import tax Production in Brazil

• R&D in Portugal: – Research infrastructures

• Need to buy a fragrance• Need for spray bottles, …

Need to build a network!

Locations and collaborationsLocations and collaborations

• Portugal academic research: – Professor Ana Cristina Freire

• Portugal cosmetic companies: – Castelbel (distribution to Brazil!)– ACH.Brito

• Preliminary contacts in Brazil:– Patrícia Sgarbi Lima, Cosmetic (Natura)– Ruandro Victor Knapik, Representative

R&D (Boticarío Group)

Locations and collaborations – PortugalLocations and collaborations – Portugal

• Collaborations with other institutions

Material Center of University of Porto (CEMUP)Dr Carlos Moreira de Sá

Electronic Microscopy Unit (UME)Dr. Pedro Tavares

Nanosctrutured Material and nanotechnologies Laboratory (NanoLab) Eng. Patrícia Carvalho 

Colep Eng. Sofia Costa 

Centre for Nanotechnology and Smart Materials (CeNTI)Eng. Ana Ribeiro

Business PlanBusiness Plan

Prototype

Market

Scale-up

PatentProof of concept

Improve the team

•Family•Friends•Researcher’s Grants

ManagerAccountantScale-up, productionR&DLawyer

Investors

Funding, collaborations and contestsFunding, collaborations and contests

Invention

Innovation

Transfer of Technology

Incubators

Contests

Skills needed in our spinoffSkills needed in our spinoff

Person Formation

ManagementInês Rocha

PhD in Physical ChemistryErasmus for Young Entrepreneurs

AccountingChristopher Ehlert

PhD student in Theoretical ChemistryMasters in Economics

@ Solvay Business School

R&DŁukasz Czekański

PhD student in Organic ChemistryFinishing his PhD

@ Adam Mickiewicz University

Mass productionStéphane Vranckx

PhD student in Physical Chemistry2nd year Master in Industrial Chemistry

@ École Centrale Paris

Sales/MarketingLeily Javidfard

SerpChem studentFormation in Marketing Communication

@ CAM Foundation (Online course)

Public relations Aleksandra Zielińska

Master in Chemistry and CosmetologyContact with relevant companies,

Possible internships

Laws / Regulations To be hired N/A

→ Hire someone with knowledge of relevant laws and regulations in Brazil and Europe

• Marketing targets: travelers

• Beyond internet sales in Brazil, expand to: – World market– Sales in shops

• R&D:– Other applications of nanocapsules

PerspectivesPerspectives

• We thank all those who helped us build and improve this project through constructive discussion:

– Salvatore Majorana

– Cristina Freire

– All professors of the SoSMSE school

AcknowledgmentsAcknowledgments

Additional informationAdditional information

Why create a spinoff?Why create a spinoff?

• Interesting research result with practical application

• Potentially big return on time/money investment

• Even in case of failure, incredible professional experience:– Intimate knowledge of the inner working of a

business– New experiences, far from usual academic work– Personal development– Create our own network

Intellectual propertyIntellectual property

• Nanocapsules (unpublished research result)= our main intellectual propertyPatent the process of encapsulating products in this

specific kind of nanocapsules Protection of our original results Possible licensing

• Later on: potential potenting of new processes• Logo, commercial name, … : to be trademarked • Patents should cover at least Europe and Brazil

• Often used by small companies instead of patenting, but:– High risk of accidental or voluntary diffusion

(if somebody leaves the company for a higher-paying job, …)

• Our original results are our biggest asset Need to be protected, even at high financial cost

In Brazil, Europe, …

IP protection - Why not trade secrets?IP protection - Why not trade secrets?

Our teamOur team

Christopher Łukasz Leily Inês Stéphane Aleksandra

Management

Accounting

R&D

Mass production

Sales/Marketing

Public relations

Laws / Regulations

• Small company Specific roles, with flexibility• Complementarity of our skills with slight overlap

Allows for temporary replacement of one person

Why PhDs?Why PhDs?

http://tinyurl.com/PHDsEnterprise « Un docteur? Une vraie plus-value pour l’entreprise! », References.be (2011)

• Experience in research• Strong problem-solving skills• Used to work in multicultural and

multidisciplinary teams• Adaptative and flexible• Able to see very long projects through• Fast learners with good organizational,

time management skills• In our case: very diverse expertise

(nanomaterials, organic chemistry, …)

Locations and collaborations – PortugalLocations and collaborations – Portugal

• Requimte– Semi-private laboratory working in

collaboration with Porto University– Use of their infrastructures for our

initial R&D – Master and PhD Students with their

own grants

• Contact:– Professor Ana Cristina Freire

• Manufacturer of cosmetics, personal care, beauty, homecare and consumer healthcare products

Spray manufacturersSpray manufacturers

• Most perfume brands don’t produce their own fragrancesBought from specialized companies!

Possible creators of our fragrance:– Castelbel– Givaudan– Firmenich– IFF– Symrise– Takasago– …

http://tinyurl.com/fragranceLeaders «2008 - 2012 Flavor & Fragrance Industry Leaders », Leffingwell & Associates

FragrancesFragrances

Some other applications of nanocapsulesSome other applications of nanocapsules

• Cancer treatment: Water soluble polymer shells that deliver directly into the nucleus a protein that only kills cancer cells

• Self-healing materials: healing of cracks in microelectronics, polymer coating, …

• Food: modification of textures, flavorings, colorings, shelf-life, …

• « Nutraceuticals »: encapsulation in lipids or polymers of substances that enhance nutrition

• …

Composition of the nanocapsulesComposition of the nanocapsules

• General name for capsules of 10 nm - 1000 nm

• Various polymers:– Polybutylcyanoacrylate– …

• Lipids

http://onlinelibrary.wiley.com/doi/10.1002/ffj.2039/abstract

Health issuesHealth issues

• Possible cause of allergies

• Uncertainties about health effect

• In the US: products containing nanocapsules need to be FDA-approved

• Likely reason why the « big names » didn’t commercialize nanocapsules-based perfumes

http://tinyurl.com/healthEU «What are potential harmful effects of nanoparticles? », European Public Health

http://tinyurl.com/nanohealth2 Gwinn, M. R.and Vallyathan, V. Environ Health Perspect. 2006 December; 114(12): 1818–1825.

Health issues (allergies, uncertainty…)Health issues (allergies, uncertainty…)

Special care will have to be taken to ensure respect of health regulations

• Health effect depends on the size, composition (esp. Surface), and possibly shape of the nanoparticles

• For the purpose of this work: assumed to be solved

http://tinyurl.com/healthEU «What are potential harmful effects of nanoparticles? », European Public Health

• Too focused on R&D, immature technology• Lack of entrepreneurship / finance experience…

Biggest causes of spinoff failuresBiggest causes of spinoff failures

http://www.statisticbrain.com/startup-failure-by-industry/

• Innovative product / production process

• Entrepreneurial and managerial experience

• Network of support and expertise

• Joint ventures with other companies

• Establishing professional (non-academic) management

http://tinyurl.com/nyasspinoff « Predicting Spinoff Success », Chris Hayter , New York Academy of Sciences (2013)

« Success Factors of Corporate Spin-Offs », Alexander Tübke (2010) - ISBN-10: 0387242252

Biggest factors increasing spinoff successBiggest factors increasing spinoff success

Inês Rocha: ManagerInês Rocha: Manager

http://www.erasmus-entrepreneurs.eu/

Create business plan

Coordinate the R&D

Coordinate cooperations

Knowlegde in nanomaterials

Experience in leading small scientific groups

Erasmus for Young Entrepreneurs

Portuguese language

Nearly finished the PhD

Leadership on organization meetings

Management skills

Potential funding

Łukasz Czekański: R&D Łukasz Czekański: R&D

Set the salaries

Contribution tomass production

Production of originalresearch results

Nanocapsule synthesis

Quality management

Organic chemistry

Flexible and adaptative

Teaching and communication

Resolution of originalproblems

Analytical chemistry

Finish Ph.D.(1 year)

Break down complex problemsinto simpler parts

Experience in research

Christopher Ehlert: AccountantChristopher Ehlert: Accountant

http://www.solvay.edu/masters-en-sciences-economiques-%C3%A0-finalit%C3%A9-business-economics

Set the salaries

Reduce the cost

Calculate business predictions

Stop Ph.D.

Order machines

Acquire money

Mathematical knowlegde

Use open source software

Analyse and ordernumerical data

Calculate the priceof the product

Perform simulations

Masters in EconomicsSolvay Business School

(1 year)

Break down complex problemsinto simpler parts

Experience in finance

Commercial accounting principles

Leily Javidfard: Marketing and salesLeily Javidfard: Marketing and sales

http://www.camfoundation.com/diploma-marketing-communications

Knowledge of R&D

Finish Master

Product benchmark

Exportation strategies

Sales engineer experience(1 year at Resinfam)

Creativity

Communication skills

Marketing CommunicationCAM Foundation(Online course)

Polymer engineerSpecialized in coatings

Experience in marketing

Effective marketing

Online advertisement

Stéphane Vranckx: Scale-up, productionStéphane Vranckx: Scale-up, production

http://www.ecp.fr/

Scale up production

Private sector experience

Production team management

Teamwork, Leadership

Oral and writtencommunication

Minimize production costs

Perform simulations

2nd year Master École Centrale Paris« Help to decisionand optimization

of Industrial and Logistic Systems »

Problem solving(esp. Optimization)

Experience in scale-up and mass production

Private sector experience(6-month internship)

Nearly finished Ph.D.in Physical Chemistry

Aleksandra Zielińska: Public relationsAleksandra Zielińska: Public relations

Quality management

Composition of fragnances

Get in contract with other people/companies

Contact cooperatingcompanies, interships

Handle with different mentalities

Responsible for the chemical materials

Good communicator

International experiences

Convince other people

Foreign languages

Cosmetic, chemical and medical knowledge

Build networkGet funding

Get overview of themarket

Skills sought for in our new recruitSkills sought for in our new recruit

Experience with otherSpinoffs/startup

Patent lawEurope, Brazil

English Portuguese/Brazilian

Cosmetic regulationsEurope, Brazil

Required knowledge Additional assets

Safety regulations for chemical companies

Experience in cosmeticsor chemicals companies

Knowledge of Brazilianculture and market

TaxationPortugal, Brazil

Technical feasabilityTechnical feasability

• We assume we have original and encouraging results for a new kind of biocompatible (safe) nanocapsule « Proof of concept » Unpublished results Patentable

• The idea of using nanocapsules containing perfumes and other cosmetics has been investigated by other cosmetic companies:– L’Oréal– Gemm’innov– …

http://tinyurl.com/patentA1 European Patent 1034839A1

http://tinyurl.com/patentB1 European Patent 1034839B1

http://tinyurl.com/patentAB1 European Patent 1029587A1

• Places where perfumes are purchased (2004):– 72% in specialized shops / grands magasins– 18% in supermarkets– 9% by direct sales– 1% in pharmacies

• Current trend: increased sales through the internet, esp. in Brazil

PPT Presentation by Loïc Torres, Master in Chemistry (provided by Ivan Coste-Manière)

Perfume salesPerfume sales

• Initially through the internet– Unusually high volume of internet shopping in Brazil– High internet penetration in our target demographics– Online ads, viral marketing campaign, …

• Later: through usual distribution channels– Specialized stores, supermarkets, …

Network of contacts and collaborations

PPT Presentation by Loïc Torres, Master in Chemistry (provided by Ivan Coste-Manière)

DistributionDistribution

MarketingMarketing

• Selling arguments:– High-tech– Unique properties– Made in Brazil

• Name: « Bouquet »– French word, but also used in English, Portuguese,

German, … – Used both for wines and flowers

Strong association to good smells/tastes Association to France, « luxury » products,

people with refined tastes, …

Marketing – Celebrity endorsementsMarketing – Celebrity endorsements

http://tinyurl.com/BrCelebrities « Brazilian celebrities List », lists.lucywho.com (2013)

• Focus on fashion models, actors and sportspersons– Upcoming Olympics / World Cup

• Most popular celebrities in Brazil:

http://tinyurl.com/brgrowth «Brazil's E-Commerce Is Booming » Ricardo Geromel, Forbes.com (2012)

SalesSales

• Initially: internet-based B2C model– Large internet penetration in our target demographics– Unusual predisposition to online shopping

Online advertisementsViral marketing

• Later: transition to retailers– Possibility through Castelbel?

• Portuguese company distributing in Brazil– Requires a network of Brazilian companies

Brazilian market analysisBrazilian market analysis

• Population of Brazil: ≈ 195,000,000

• Lots of young people with:– Internet– Smartphones

(> 1/inhabitant)

• Conversion rate of the Brazilian Real (R$):– ≈ 0.340 €– ≈ 0.447 US$

http://populationpyramid.net/

http://tinyurl.com/SalaryBrazil «Salary Survey in Brazil », Salary Explorer, (2013)

Brazilian market analysisBrazilian market analysis

• Average salary:

• Best paying jobs:

http://populationpyramid.net/

http://tinyurl.com/SalaryBrazil «Salary Survey in Brazil », Salary Explorer, (2013)

Brazilians and internetBrazilians and internet

• Largest number of internet users in South America(and growing)

• Fast adopters of social media• Unusually strong tendency

to buy online

• Perfume users looking for something new

• Live in urban areas, esp. in hot countries

• Not necessarily « rich », but ready to spend good money on good perfume

• Unwilling/unable to discreetly put perfume during the day– Includes men who want to smell good,

without willing to be perceived as feminine

• Knowledgeable about style

Characteristics of our target marketCharacteristics of our target market

Potential future marketing targetsPotential future marketing targets

• Business(wo)men– Need to feel fresh even when they have a lot of

meetings in a row (esp. in hot countries)

• Travelers– Need to feel fresh during long plane travels…

but cannot bring liquids!– Large number of travelers expected in coming years:

World Cup (2014), Olympics (2016)

PackagingPackaging

• Sets the product apart, makes it look « classy »

• General ideas of shape– Evoking the high-tech nature of the product

(Molecules…) Men– Evoking its unique properties perfume

that works « all day long »(Hourglass, …)

Competition: Perfumes in BrazilCompetition: Perfumes in Brazil

https://www.npdgroup.co.uk/wps/portal/npd/uk/home/

http://www.sepha.com.br/

• Best feminine perfume sales in Brazil:

– J'adore (Dior)– Carolina Herrera (Carolina Herrera)– Flower by Kenzo– Hypnose (Lancôme)– Euphoria (Calvin Klein)

• All in the ≈ 100 €/50 mL price range(299 R$/50 mL)

(Pre-)Seed capital(Pre-)Seed capital

• Small contribution from F&F&F• Contest

– Exposure to potential investors– Potential prize money

• Erasmus• Grants from researchers

Erasmus EntrepreneurshipErasmus Entrepreneurship

• Exchange european program

• Goal:

Have young entrepreneurs learn from experienced ones from the EU

Develop skills to run their businesses

http://www.erasmus-entrepreneurs.eu/

Start of our networkStart of our network

• General information about spinoffs:– Salvatore Majorana

• Academic with link to Portuguese cosmetics: – Professor Ana Cristina Freire

• Portugal cosmetic companies: – Castelbel (distribution in Brazil!)– ACH.Brito– …