5 Things We Learnt About Scaling from Next Gen Material Start Ups.

Image: Unsplash Lalit Kumar

We spent a week in July visiting a number of textile and apparel trade shows in Paris. There we were able to have conversations with New Fiber Welding, Spiber, Fairbric and Lanzatex on some of the important things they had learnt on their journey. Each of these brands are at various stages of expansion; Spiber and Fairbrics are still in the pilot stage and planning scale up, New Fiber Welding is scaling up to rolled production in Q4 of 2023 which will see them grow into new textile applications, and Lanzatex are on a global expansion drive with plants in Belgium, India and China with more being planned. This news should be confidence boosting to investors on the back of the headlines this week that Bolt Threads are stopping production of mycelium leather, which follows the announcement only a few years ago of them terminating the scale up of their Spider Silk (which is not made from spiders by the way! It’s a fermentation process not too dissimilar to beer brewing), which has opened up the market for Spiber to make strides in their place.

While much discussion has been happening on the failure of Bolt Threads, with many views being given and only some following the official line that inflation and challenging investment environment has contributed to the cancellation; the businesses we spoke to are in agreement as to what it takes to succeed in the next gen materials space.

Number 1 - Go for government funding first.

It’s a less risky form of investment, especially when you’re looking at feasibility studies. While sometimes sluggish and beaucracy heavy they do have resources to tap into a hive mind across many different organisations. Government return on investment is longer term in forms of tax payments than any angel investor is going to be. 

Number 2 - Certifications matter. 

In Europe the ISCC are the ones that are highly preferred, and according to Lanatex should be the ones to start with. They didn’t start with them incidentally, but if there went back in time it’s the certifications they would go for first according to Babette Pettersen, their VP. Tapping into sustainable textile forums are a good gauge of what tests and certifications are required for your target market.

Number 3 - Always have a scaling plan, even if it changes.

Scaling takes decades not years according to Fairbrics, a sentiment that has been echoed by New Fiber Welding when discussing how long it’s taken to scale their leather alternative from piece production to roll. The more novel the fibre the more detailed the scaling plan is going to need to be because of the challenges you’ll face in getting producer buy in.

Number 4 - Supply chain before brands.

This probably relates more to drop in alternatives such as those provided by Lanatex and Fairbrics rather than entirely new fibre types. It can be difficult to get buy in from spinners and recyclers if the product can’t be produced as part of their normal product production.

Number 5 - Your brand partners have the ability to make or break you. 

It’s basically marketing! But this is telling when you compare the companies that have worked with Adidas and those that have worked with Pangaia. A strong indication of success has been seen in the last few years with companies that have worked with Pangaia compared to those who work with Adidas. This could come down to 2 factors; the first being investors want to be associated with Pangaia, but it could also be that Pangaia are an adaptive, young company. A few producers have noted in the past that fitting into Adidas’s BAU has killed businesses that just aren’t at the scale or efficiency they need to be to do that.

Conversations we’ve had with companies who are at pilot stage has given us the general consensus that it’s really difficult to know how to scale, or even plan to scale, in a world that needs radical change within it’s consumption rates and growth metrics. When pushed on price at a panel talk at PV, Babette Pettersen from Lanzatech said that prices should be reflective of LCAs. Which if a carbon tax is levied, as requested by many green campaigners, would make new gen materials much more attractive to price sensitive brands. 

Drop us a message if you want to talk about best methods for scaling your start up.