Client JourneysSynthace: The Business Model

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Synthace is redefining man's relationship with biology. But how can it best exploit its opportunity? Chief Executive Tim Fell shares their story.

When most of us think of biology, we tend to think of the study of life and living systems.

Very few of us think of a manufacturing platform. But in the 21st century, that’s what it’s becoming – a system of manufacturing capable of creating new foods, fuels, materials and drugs. With the cost of reading & writing DNA decreased, and the capability to manipulate genes at previously unimaginable levels, the era of synthetic biology is well and truly upon us. But if its potential is to be fully realised, then biology itself must be easier to engineer.

Enter Synthace.

Founded in 2011 by researchers, Sean Ward and Markus Gershater, the company has completely rewritten how to develop biotechnology, allowing the rapid assembly and optimisation of biological systems through a combination of a new programming language, laboratory automation, computational models and active learning methodologies. The company had a unique advantage early on. Synthace’s Chief Executive, Tim Fell:

“Early on, we got to know a big pharma giant that was investigating an approach similar to ours, only they had been struggling. They approached us about a particular strain of E. coli, that had been challenging them for 18-months. We took it away and in 10-weeks increased its yield by a factor of 10. When we re-presented it, the director nearly fell out of his chair. Simply put, the tool stack we have developed to understand and engineer biological complexity works outstandingly well.”

Synthace Ltd laboratory petri dish

Given such an auspicious start, it was difficult to see what could hold them back. Recalls Tim:

“Our challenge had less to do with our technology and more with the selection of business model. Here we have this great technology and capability. How do you best exploit it?

Do you hoard it and use it to make products yourself, vertically integrating and potentially leaving the platform behind? Do you offer a service to select clients? If so, fine, but you’re in danger of letting others realise most of the long-term value. Or do you try to find a way to get technology into the largest number of hands, gambling that scaling access to the platform will create the greatest value later on.  It’s difficult. What we did know was that we couldn’t do everything. We had to choose.”

Funding and a Shift in Perspective

Affecting the decision was the funding situation. Synthace had raised finance, enough to continue development, but not enough to ignore revenue generation for very long. Given the situation, they cast aside early ambitions in order to pursue a more service-orientated route, albeit one that could capture long-term value by sharing in cost savings delivered to clients. This felt the most comfortable, as the management team, board and investors all had experience with big pharma and chemical groups who valued this offering.

Synthace met with large companies from these sectors and had success signing deals. Over time though, it became clear that traction would not be as quick or as broad as they were hoping for. Deals with corporates take time, regardless of level of interest. There are processes, politics, competing priorities, all of which need to be worked through. For young companies with limited resources, this presents a big challenge.

The team also came to realise that this business model just wasn’t scalable to the size of the opportunity. Something needed to change.

Portrait of Tim Fell CEO Synthace with colleague against white background with natural light

At the same time, leading automation and cloud platform vendors were taking notice of Antha, the operating system at the heart of the company’s technology. Discussions with these companies accelerated. Says Tim:

“In terms of model this was the route to get the technology into the largest number of hands. Discussions with these groups progressed faster than we were expecting. They wanted to do stuff. They also extended the discussion into other areas, and were more comfortable with the ambiguity of operating in new ways. This was really helpful for us given that we were changing working practices that had existed in some cases for centuries.”

These discussions and the learnings from earlier iterations of the business model led to a repositioning of Synthace. The company’s operating system, Antha, enabled them to become a technology enabler, positioned between the equipment manufacturers and the labs.

Rather than being just another service provider, Antha could become the ‘Windows’ of the biology and chemical manufacturing worlds.

This was a powerful new position for the company and new territory for many within it.  As Tim explains:

I socialized this with the board and shareholders and a couple of the investors initially balked. They came into Synthace not expecting to invest in a software business. But they’re also experienced enough to know that plans change. As a group, we saw much greater opportunities with the reposition than before. We had to move on it.”

Today, Synthace is a software company redefining our relationship with biology.

It is transforming laboratories with flexible automation, repeatable experimentation and exponential improvements in productivity.

Antha has made Synthace one of the World Economic Forum’s Top 30 Technology Pioneers for 2016, the only company to receive the accolade in the UK, and one of only 8 in Europe. The company has announced formal partnerships with some of the world’s leading technology platform companies and commercialisation is well underway. Says Tim:

“We still have a long way to go. We have only sculptured biology, but we’re at the dawn of being able to properly engineer with it. There are so many things we’re going to have to get right in order to pull this off. But that’s what you’re up against when you’re trying to create something that’s truly meaningful. It’s not meant to be easy.”

Synthace’s journey is a common one; starting at one place and moving into an entirely different one. Plans change. Expectations are re-set. That’s part of the journey.

At the Peloton Leadership Network, we understand that success is a journey.

The Peloton Leadership Network is a management consulting group that helps young technology businesses maximise their talents, capabilities and opportunities.  Through executive data analytics, coaching & education and executive search services, we help transform high potential businesses into high impact companies.