Abstract
What does it take to turn your PhD research into a company? Using video to sell the discovery, quizzing future customers, de-risking to drive investment and preparing for a roller coaster ride are just a few things to consider. Stephen Coulson, chief technology officer of P2i, talks through his journey from lab to market, and discusses how to reach beyond your first applications.
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Today, thanks to P2i's liquid-repellent nanotechnology, you can leave a plasma-treated or 'dunkable' mobile phone underwater for 30 minutes or more without damaging the device. Our deposition chambers are used by clients such as Motorola and Alcatel, and can be found on production lines in the USA, Argentina, Germany, Indonesia and South Korea. Based just outside Oxford, UK, P2i now has more than 100 employees and in 2014 opened its first technology centre in Shenzhen, China. But what did it take to get to this point and how did the story begin?
Platform technology
The initial ideas emerged from my PhD at Durham University, which I started in 1993 under the supervision of Professor Jas Pal Badyal, a specialist in surface science. The PhD project was sponsored by the UK Ministry of Defence (MOD), and was focused on a clothing programme to provide protection for soldiers against chemical attacks as well as environmental challenges such as rainstorms, or working with petrol, oils and lubricants, without increasing the physiological burden, so they could go about their daily activity.
The science behind the PhD project, and the technology P2i uses today, is about providing an ultra-low surface energy finish. To do this, we assembled a vacuum-based processing system that uses a radio frequency source to accelerate electrons, which then effectively ionize molecules inside the sample chamber. That creates a plasma—in our case a partially ionized gas—which allows you to chemically bond a very thin layer of coating to a wide variety of objects made from a diverse range of materials.
The PhD involved a lot of experimental work and focused on the academic elements of the project. I did not learn that much about the commercial side until our discovery started to hit the headlines. To demonstrate the effect of the plasma treatment, we had made videos of liquids beading up on a surface and then rolling off. It definitely helped that the work could be explained visually.
People could relate to the technology, and think of possible uses, so it was easy to attract media interest. I was on various radio programmes and TV clips, and then companies started approaching us and the commercial interest grew. The technology was invented in June 1997, less than a year into the project, and so I had to manage this activity alongside the PhD research.
Towards commercialization
At the time, there was an effort across the country to find ways of commercially exploiting intellectual property (IP)—people were setting up tech transfer divisions in universities—and Durham University wanted to show that its inventions and technology could be translated into commercial use.
The MOD owned the IP, so the patents were, and are, all in the name of the Secretary of State for Defence, although they have now assigned them to P2i. The MOD's interest was (1) to see whether this technology could deliver the technical effect they wanted and (2) to look at how it could be scaled up to be used on the battlefield.
The PhD delivered the result the MOD wanted, it was a new platform technology. During this time, I built a plasma chamber for them that was similar to the one I had in the lab, but a bit bigger, so you could treat larger sections of fabric for the clothing applications.
In 1999 I finished my PhD and transferred from academia to the MOD to pursue essentially the same project. I was still working on the development programme for the UK government's Directors of Equipment Capability, proving out a technology for use on the battlefield. But I also had access to commercial channels through the MOD.
Senior MOD officials were very interested in capitalizing on IP and spinning out companies. Also, in 1999 the Baker report (a white paper from the UK government) was published, stating that all public-sector research establishments should be aggressively exploiting their IP in a commercial sense, which added more fuel to get things going.
My project was within a part of the MOD called the Defence Science and Technology Laboratory (DSTL), which was in turn spinning out a company called Ploughshare (as a wholly owned subsidiary of DSTL). Ploughshare was designed to exploit all of the IP, and became a kind of holding pen for all the patents. So while the mechanism to spin out a company had been set up, P2i was in fact the first spin out from DSTL, so the paperwork and the process was something we were the pathfinders for.
Pitching the idea and staying focused
Before we were spun out, we had 40 or 50 meetings with various potential customers for our liquid-repellent surface coating—people who had contacted us, some off the back of media work, and others we had reached out to. We did a lot of presentations, to investment firms as well as possible clients. This experience was very useful to draw on as we moved ahead with commercialization. It guided our thinking on what would and would not work technically and commercially, and where to focus our efforts.
In terms of challenges, I think that one of the hardest parts of the start-up process was dealing with the uncertainty—some days the spin out was definitely happening, and then other days it definitely was not. To explain further, DSTL was co-formed with QINETIQ during the public private partnership of the Defence Evaluation and Research Agency (DERA), so the exact remits were unclear and kept changing. We have been through demanding times with the business, but I still see the roller coaster ride as being higher and lower before the company was spun out than for our journey since then.
Building the business
From day one, when P2i span out in 2004, we had a revenue stream—it was very, very small, but we had a customer paying us. And when you have a customer paying you they keep you on track with making sure the science is keeping up with the requirements of that industry, from how it is delivered through to health and safety requirements; all of the different aspects. Conversely, if you are developing a technology in isolation to that, there could be ways of scrimping and taking shortcuts, but they will normally come back and bite you, I believe.
With our background in military clothing, most of our initial contacts were about fabric and lifestyle applications, from fashion and sportswear companies. These days we are focused on a smaller number of applications—principally mobile phones and filtration.
It became apparent that the economics were better for coating smaller, higher-priced items, as you can fit a greater value of goods into the plasma chamber in one batch. So we thought about items that are small, high value and get damaged by water or oil easily. On the filtration side, people wanted us to make filtration media water repellent while also retaining airflow. From clothing we moved into footwear, which was one of the early successes. And from filtration we moved on to pipette tips.
When you have a customer paying you they keep you on track with the requirements of that industry.
Then a US company sent us some hearing aids. If you can protect these products against accidental splashes and spills, there is a huge value add. Some hearing aids retail at €4000 per ear, and they were being damaged regularly by rainwater, or unintentionally wearing them in the shower, from sweat around the ear, earwax and everything else. We could increase the reliability of those devices, so that became very advantageous.
The press releases we were putting out about our success in the hearing-aid sector attracted the mobile phone manufacturers, one of which was Motorola, and they quickly saw the benefit of providing increased reliability.
We had looked at mobile phones back at the MOD, but it was only later on that we had begun to properly understand how the opportunity could work for us. With phone design, you have to pack in all the features and microchips, while typically also allowing the user to get in and replace the battery and SIM card. In addition, there is quite a bit of heat generated by the components within a phone, which needs to escape to keep the device functioning correctly. These factors often mean that water can enter the device relatively easily, which will quickly damage the phone's electronics.
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Developers had tried various technologies to protect mobile phones against water and other substances, but often these solutions did not bond properly to the circuit boards, or the coatings were too thick and prevented other functions from working properly.
Protection inside and out
Our thin-film technology is applied to the whole finished device and coats all the components inside and out at the same time. It offers excellent protection against water and other liquids, while also allowing the phone to function completely normally. That was groundbreaking, and it is straightforward to apply, too, in mass manufacturing. Also, it is not just the phone makers who benefit. Water-repellent mobiles are good news for network operators, too, as they mean fewer replaced handsets, better customer satisfaction and less churn to rival providers.
Today we are focused very much on the electronics industry, together with a significant element of filtration. When you start out you take every new business lead very seriously, but once you start getting traction, and have more confidence in your technology and how it can be applied, you prioritize more.
We have had a lot of success with our splash-proof technology, and our dunkable treatment has now been proven out with our pioneering partner, so we are busy rolling that out and dunkable-treated products will be launched into the market in 2014.
Other areas of interest include flexible two-dimensional materials—not just filtration media, but technical textiles and flexible electronics. Beyond water repellence you can think about other coatings such as anti-microbial, protein resistance, and really whatever functional effect can be delivered by a coating. There is no shortage of possibilities.
De-risking the business
As the founding inventor, one of your responsibilities is to make yourself less critical to the business to open up opportunities for growth. People will be reluctant to buy a company or invest heavily if it is all down to you. You have to strike a balance between being adequately compensated for training and creating value in others to de-risk the business, whilst retaining value in yourself through your relationships, vision and underpinning knowledge.
Biographies
Stephen Coulson is chief technology officer of P2i. In 1997, he invented what would become P2i's core technology while carrying out his PhD at Durham University, UK, on 'liquid repellent surfaces'. He was then employed by the Ministry of Defence to set up a plasma capability and further scale-up the patented technology for industrial applications. In 2001, Stephen moved into project managing the UK Nuclear Biological and Chemical clothing programme, but continued to exploit the plasma technology for a range of commercial applications. Stephen was the founding member of P2i when it was formed in 2004 and has more than 15 years' experience in advanced materials science and plasma processing, focusing on the commercialization of the technology as a proven, cost-effective industrial process. For more information see: www.p2i.com.