It is not easy making a physical product—particularly when using biotechnology—and the results may be surprising.
That was the key message this past weekend from Jonathan Wolfson, co-founder and CEO of San Francisco-based Solazyme (NASDAQ: [[ticker:SZYM]]) at the NYU Entrepreneurs Festival. At the event, Wolfson, an alumnus of the university, sat with me for a keynote fireside chat about Solazyme’s origins and the company’s current path.
Solazyme produces renewable oil from microalgae for personal-care products, food ingredients, and industrial uses, along with making biofuel that has been tested by the military.
The company has seen its share of changes and some growing pains, including shifting its focus beyond its early plans for biofuels. Solazyme also took some heat last year because of production delays at its plant in Brazil.
Despite such setbacks, he said the company is pursuing new partnerships and opportunities in industries that were not part of Solazyme’s original game plan.
Xconomy: We’re coming up on the anniversary of the founding of the company?
Jonathan Wolfson: This will formally be the 12th anniversary, coming up in a couple of weeks. But the idea goes back to 1989, where I met the guy, who I co-founded the company, on my first day of college.
XC: How did Solazyme come together; I hear it was founded literally in a garage?
JW: It’s a little more complicated than that. That’s the Silicon Valley garage story. While that’s completely true, it followed lots of other things. We had been talking about starting a company to make renewable fuels from microalgae going back to the late 1980s. It took us a long time; we both did other things. I started another company [InvestorTree], a financial services firm here in New York.
After 14 years of talking about it, my friend was living in Palo Alto, I was in New York. I bought a $600 car on Craigslist, drove out to California, and moved in with him and his wife. We set up in the garage with a couple of hundred strings of algae, a futon, and some computers.
XC: Who did you feel you really had to convince that algae could be used this way and how did you sell them on the idea?
JW: There was what I thought the idea would be, what it is, and what it became along the way. Those aren’t exactly the same thing. I think one of the most important things for either current entrepreneurs or people who are thinking about this is, one of the things that I learned between the first company I started and the second company was that you need to follow the opportunity. Initially the idea was to create low-carbon fuels. We’re destroying our planet. There’s a real need for low-carbon fuels and it turns out that microalgae were the original oil producers on the planet. They’ve evolved over billions of years to make oil. When you pull petroleum out of the ground, you can do molecular fingerprinting and demonstrate that a fair amount of that oil originated from microalgae.
The idea then was, “How can we speed this up in real time using the tools of modern biotechnology?”
What ended up happening was the original technology didn’t exactly work. We had to retrofit it. This was after we raised our first round of financing. Which led to some very “exciting” discussions about convincing our early investors that although the original technology, growing algae in big covered ponds, didn’t work early on, we arrived at the conclusion that algae was still the best platform to make oil. There was just a different way to do it.
For us it was industrial fermentation, which means big stainless steel tanks and plant-based sugars. Instead of asking the algae to do photosynthesis themselves, you feed them sugars from other plants that have done it, and then they make oil for you. We had to go back and pitch the initial investors on this idea of growing algae in the dark in big steel tanks. There wasn’t that much money in the
