How Solugen is Saving the $5 Trillion Chemical Industry (Co-founders Gaurab Chakrabarti & Sean Hunt)
Nov 15, 2023
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Gaurab Chakrabarti and Sean Hunt, co-founders of Solugen, discuss how they are revolutionizing the $5 trillion chemicals industry with their plant-derived substitutes. They touch on topics such as the challenges in the industry, their manufacturing process, meeting over a game of poker, the first wave of Cleantech startup failures, the importance of logistics and supply chain, and their strategy for scaling the business. They also share interesting stories about their homemade metal catalyst reactor and building their first factory on the site of an exploded wax distillery.
Solugen aims to replace petroleum-based products with affordable and high-performing plant-derived substitutes, disrupting the chemicals industry and reducing carbon footprint.
The chemicals industry plays a crucial role in our daily lives and the global economy, but faces challenges such as low yield and high carbon emissions, which Solugen aims to address through innovative technologies and sustainable practices.
Solugen's success is attributed to their customer-centric approach, prioritizing customer satisfaction, delivering high-quality products on time, and establishing strong relationships with customers to rapidly scale revenue and become a leader in the industry.
Deep dives
Replacing petroleum-based products with plant-based substitutes
Solugen's mission is to replace petroleum-based products with plant-derived substitutes that are affordable and high-performing. They leverage a combination of biology and traditional chemical engineering to build smaller, decentralized plants that offer more customer-centric solutions. By increasing the yield and efficiency of their processes, Solugen aims to disrupt the chemicals industry and reduce its carbon footprint.
The importance of the chemicals industry
The chemicals industry plays a crucial role in our daily lives and the global economy. It is responsible for producing a wide range of products, from everyday items such as clothing, construction materials, and pens, to essential commodities like fertilizers that have enabled the exponential growth of the world's population. Despite its impact, the industry faces challenges such as low yield and high carbon emissions. Solugen aims to address these issues through innovative technologies and sustainable practices.
From PVC pipes to scalable production
Solugen's journey started with a small homemade reactor made from PVC pipes. They quickly gained traction by supplying hydrogen peroxide to float spas and other markets, demonstrating the demand for their plant-based chemical substitutes. With the support of investors like Seth Bannon, Solugen raised $4.5 million to scale up their operations. They built a pilot plant and began optimizing their chemi-enzymatic manufacturing process, aiming for profitability and higher production volumes.
The challenges of entering the consumer market
Solugen's foray into the consumer market, particularly with their white product line, proved to be more challenging than expected. The company had to navigate complex marketing and supply chain issues in the consumer packaged goods industry. Despite these difficulties, they were able to sell the white business and leverage the supply contract to base load their next plant, aligning with their original strategy and emphasizing the customer-driven approach they learned from Y Combinator.
Building Trust and Demonstrating Credibility
In 2018, the company focused on building trust and credibility in the industrial market. They made investments in acquiring a facility that demonstrated their ability to produce actual products. By having a tangible product to showcase, they were able to establish credibility and gain the trust of potential customers. They also offered free field trials to decrease customer's fear and show their commitment to delivering on their promises. This approach helped them gain credibility and trust, which led to a significant increase in revenue.
Customer Focus, Delighting customers, and Driving Growth
The company's success can be attributed to their customer-centric approach. They prioritize customer satisfaction and aim to delight their customers with their products and services. By focusing on delivering consistent, high-quality products on time, they were able to establish strong relationships with their customers. They also emphasized price competitiveness and sustainability as important factors. By maximizing customer happiness and wallet share, they were able to rapidly scale their revenue and position themselves as a leader in the industry.
Gaurab Chakrabarti and Sean Hunt are the Co-founders of Solugen, which replaces petroleum based products with plant-derived substitutes without sacrificing affordability or performance. They met playing poker in college, kickstarted the company with $10k from an MIT pitch competition, and have since scaled the business to over nine-figures in revenue.
Solugen has raised over $642 million from investors like Fifty Years, Lowercarbon Capital, Founders Fund, Refactor Capital, and Cantos Ventures.
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Topics discussed:
How the chemicals industry touches 25% of US GDP
Why the industry is like real estate: fragmented and focused on asset utilization
The reason chemicals companies have terrible NPS scores
How Solugen’s manufacturing process converts plants and C02 into chemicals
Meeting over a game of poker while getting their PhD’s
Winning $10k from an MIT pitch competition to capture 10% of the float spa market in Dallas, Texas
Why the first wave of Cleantech startup fail
Why logistics and supply chain are the biggest problems in Chemicals
Their framework for thinking big, but taking little steps to get there
Running their homemade metal catalyst reactor at YC Demo Day
Launching, scaling, and selling a CPG wipes company to prove their chemicals worked
Building their first factory (the BioForge) on the site of an exploded wax distillery
Their strategy for getting large, multinational companies to try their products
