Happy Wednesday, readers! The Chain Reaction Innovations incubator program at Argonne National Laboratory will open its next call for applications on September 15. I spoke with Adria Wilson, CRI’s entrepreneurial program lead, about what it takes for Midwest tech startups to be successful. Read her insight after today’s tech headlines…

Today’s headlines:

🚗 TRANSPORTATION: Three Smart Columbus projects will pilot new mobility technologies in Columbus, Ohio. One pilot will create mobility hubs, which bring together different transportation modes such as e-bikes, e-scooters and charging docks, and electric vehicle charging.

🔬 RESEARCH: A study by Michigan State University scientists examines how electrons can move long distances across living biological materials, such as proteins. Understanding how the electrons move is considered fundamental for advancing bioenergy technologies.

🚜 AGRICULTURE:

• Lincoln, Nebraska-based agtech startup RealmFive is addressing farming challenges including environmental considerations by providing data-forward farming technologies such as sensors and cloud computing, reports Silicon Prairie News.
• Food company Cargill, headquartered in Wayzata, Minnesota, is a founding partner for innovation platform Plug and Play’s soon-to-launch startup accelerator program in Topeka, Kansas, which will focus on agricultural technologies and animal health.

🎉 PRODUCT LAUNCH: Clean-label food product company Third Wave Bioactives, based in Wauwatosa, Wisconsin, launched a new natural-flavored onion juice product that reduces waste by improving food product shelf life while also being safer for consumers to eat, reports Wisconsin Inno.

***SPONSORED LINK: The Cleanie Awards — the #1 awards program in clean technology — is now accepting applications! Submit to win, or contact us with any questions. Applications close July 30.***

🌊 WATER: Michigan tech training business Grand Circus will incorporate live environmental data from the Great Lakes into its bootcamp programs through a partnership with the Great Lakes Observing System, based in Ann Arbor, Michigan. Students will be encouraged to use the datasets to build technologies that address climate change and other environmental concerns.

💰 FUNDING: The U.S. Department of Energy is providing $68 million in funding for five-year projects to make sustainable bioenergy crops more productive. Projects in Illinois, Nebraska, and Wisconsin are among the 15 recipients.

***SPONSORED LINK: The Midwest Building Decarbonization Coalition is hiring a Manager of Community Engagement and Equity. Join the team to play a leadership role in developing an equitable and diverse Midwestern coalition to advance affordable homes and businesses that are free of climate change-causing air pollution.***

Now, back to my interview with Chain Reaction Innovations’ Adria Wilson. She is a chemist who is enthusiastic about accelerating the development of clean energy technologies. She works with early-stage startups through CRI to offer tools and skills development to transform their ideas into a bona fide business.

Wilson spoke with me about what it takes for cleantech startups to be successful, especially in Chicago and the Midwest. Today Centered will run part one of the Q&A, and part two will run tomorrow.

Q: What tips do you have for entrepreneurs to achieve success with their startup businesses, and what are some common pitfalls they should avoid?

A: The entrepreneurs that I work with through CRI’s program have physical technology that’s based on a scientific or engineering breakthrough, and are in the really early stages. First, you really need to start thinking about shifting your scientific mindset over to an entrepreneurial mindset. I think that can be difficult sometimes for entrepreneurs in our program.

Sometimes what they need to take into account their runway and the path that gets them most linearly to a place where they can start to generate revenue, whether it’s through an end customer or a niche market that acts like a stepping stone. Most of our innovators in the program are getting their first follow-on funding… Grants are probably going to be the first source of funding for most companies developing something physical.

Another thing that goes into that is listening to your mentors and trying to figure out where your blind spots are. When you start a company you have to wear many, many hats and not all of them will be hats that you rock at. But you have to make them work until you can get some help. It helps to be aware of that: where you need to do more learning or need to triage, and ultimately where you need to find support in terms of additional team members when you’re able to support them. You need to think about what role you want to play going forward.

Q: You mentioned business backgrounds vs. science backgrounds. Is money the main thing scientists view differently than business-focused entrepreneurs? Are there other key areas? 

A: Yes, but there are other things as well. Some of the innovators who come into the program have a good sense of the scale and scope of money that they will need or are at least familiar with what it will take to get to certain technical milestones. They might know that $2 million is a reasonable amount to ask for and achieve something because that’s been written into research grants before.

But when you look at follow-on steps — first you develop a prototype, then you have to scale up the prototype, and then you might have to develop a pilot plant to increase your volume — the innovators in our program are sometimes caught off guard. They want to ask for $3 million to $5 million because it sounds like a good first seed round… But we have a conversation with them explaining that if you’re going to build your pilot plant from the ground up, it’s probably going to take all of that money and you might need to ask for a couple million more.

Getting comfortable with those sorts of considerations can take some time. You’re always going to be wrong in terms of how much you planned that you’ll need. There’s no way of knowing what your future will entail for something that’s a new technology. But as you mature you can always build off of past progress. Innovators have to get used to at least trying to scope that out and realize what the magnitude is and be confident with it.

The other thing some scientists have to get used to the fact that they can’t do it all and they can’t as a single human being just pick up every discipline they need to run a business… It’s totally unreasonable to think that they’re capable of pulling everything through on their own. In general, I think it would be good for more scientists to get a sense of what it takes to run a business. That’s part of what we are here for!

Q: Do you think there are business aspects that cleantech startups should focus on or be aware of, compared with other types of businesses?

A: There are definitely some stark differences. I think a lot of people only think of the power sector when they think of clean energy and cleantech. But cleantech can span so many different sectors of the economy.

There are layers of additional time and capital you need that you cannot maneuver around. It’s not just regulatory, it also has to do with that fact that if you’re building a physical product.

You’re most certainly going to have to integrate into an existing supply chain and existing value chain. Building something physical requires different materials from different suppliers… If you’re coming up with a new lithium ion battery material, for example, maybe an anode material, that’s only one piece of the battery. So you have to choose if you want to be the battery manufacturer, or if you want to work with a battery manufacturer who is selling to other equipment manufacturers, or if you want to work with three equipment manufacturers. You have to scope out the way the market ecosystem is laid out and figure out who you have to work with. That’s going to extend your timeline as you work with those groups to figure out if your product meets performance requirements, if it lasts as long as you need it to.

There are a lot of layers and it’s more of a marathon than a sprint, which is antithetical to what you would think as a startup. You often think of entrepreneurs as having to drive something forward fast so they can monetize it before they run out of resources. There’s a layer of patience with it. That gets to the crux of one of the biggest struggles for entrepreneurs in the cleantech space: figuring out how you keep yourself afloat long enough to tap into the end market that you foresaw when you started.

Let me know which other Midwest cleantech leaders to feature in Centered! Reach out with news tips, press releases, and feedback via email to katie@centered.tech or connect on LinkedIn and Twitter @centereddottech.