Starting a Chemical Business

9 Replies

Starting a chemical business seems so reasonable.  Get some space, build or buy a hood, get the basic stuff- glassware, a rotovap, a vacuum pump, some chemicals, and start to work.  We chemists are able to do the lab stuff.  Basic transformations, separations, purifications, etc.  We exist to do these things.  But transmuting matter is the easy part.

There are many other things to do beyond mere synthesis when you have a company. You have to manage a physical facility. Deal with the state health department to get a haz waste permit so someone will come get your waste.  Bring in the fire department to inspect the place, review your emergency plans and MSDS collection so they can arrive informed of what to expect in an emergency.  You need to find an insurance carrier to provide some basic insurance coverage for the site.  

Cash flow is life itself. You need to have cash in reserve to pay for raw materials well in advance of shipping your product out the door.  It’s called working capital.  Figure on carrying the cost of raw materials for several months before you actually get paid for your product.  Once you do get the product shipped, the payment terms clock begins. Most companies offer 30 days net.  This is called commercial credit and do not expect to get it easily from your suppliers.  Of course, your customer will expect 60 days net. 

To get commercial credit, you’ll have to get a Dunn & Bradstreet number. Then you’ll have to fill out applications and hope that you can get approximately decent terms. Chemical companies have a certain amount of due diligence to do when starting a new account. They will allow a modest credit initially (eg., $1000 for 30 days net) to protect their financial position. But they also have some responsibility to the safety of the public in regard to where they send hazardous shipments to.  Their nightmare is to send hazardous materials to some 14 year old puke in Cleveland who found a tattered copy of “The Anarchists Cookbook” in his Grandpa’s attic and decided that he wants to make a nitro ester to impress his friends. To avoid this, some locations may be barred for shipment of hazardous materials.  So make sure that your site is zoned properly.

Collecting payment from a customer can go smoothly or very poorly. Customers who do not manange their working capital very well may strapped for cash until they get paid for their product. Accountants in the receivables department refer to their “aging schedule” to keep track of how late various accounts are.  Getting timely payment can be a problem. Some companies will offer terms like a 1 or 2 % discount for payment in 10 days.

One of the most important hires you bring on is the receivables person.  It is best to hire the most savage accounting troll you can find for this position.  Their job is to watch the accounts aging and to call and threaten bodily harm to the slackers who are behind on their payments.  A long list of past due accounts can bring you down like a lead balloon. Take no prisoners. This is life and death.

For a startup, following a synthesis procedure is straightforward.  However, if you need an NMR spectrum, you are going to have to be clever.  You can pay through the nose to have a commercial lab get you one. But if you have to follow a purification by NMR, it can get to be problematic fast. This is where your grad school experience can let you down. By that I mean, an over-reliance on NMR. For a lean & mean startup, you can’t rely on expensive spectroscopic methods to get you to an endpoint. That is, unless you’re flush with money.

Which brings up a philosophical point.  Many people start a business on the assumption that they need venture capitalists to rain money on them to do the startup. If you can possibly avoid it, do so.  If you have to get venture capital, then consider bringing on a professional business manager to deal with it. Venture capitalists are not merely smart, they are cagey.  They exact a large toll on the shares of ownership of a startup they fund.  You can find yourself as the founder being a minority shareholder.  These people serve a valuable purpose in the startup world. But remember, there is a price to be paid for using their money.

Market Pull and Technology Push

7 Replies

The chemical business is, after all, a business.  You have to make something that somebody wants. Brilliant ideas are a dime a dozen. Getting a new product to market is harder than you might expect, even if you have a purchase order in hand. The transition from bench to 1000 gallon reactor is often full of unanticipated problems.  The process of forcing a new product or technology on a market that didn’t exactly ask for might be called “Technology Push”.  The process of responding directly to a clear market demand is called “Market Pull”.

Market pull is a force that business types, especially the MBA’s, feel best about.  It is easy to justify the allocation of resources to launch into a product development cycle that addresses a clear and quantifiable demand.  Duh. It’s a no-brainer. That is, if there are no bottlenecks to get through. The merits of market pull are only valid if the proposed technology has been shown to work to specifications. Beware of the inventor who cannot produce a prototype to back his/her patent.

Technology push is a circumstance wherein a company has a product or technology that might stimulate demand if it were marketed properly.  Now, an economist might say that there is no such thing as stimulating demand. They’ll patiently explain that this only stimulates an underlying demand that may not have been articulated. Whatever formalism you prefer, it is possible to dazzle potential customers with a new capability.  Clever people can dream up applications that the original inventors could have never anticipated. Look at Symyx with their fantastic technology package for high throughput experimentation.

It is a bit easier to write a business plan based on market pull because the job of forecasting revenue flows should be based on measurable market conditions. Again, the assumption is that the proposed response to the market pull is a technology that works.

A business plan based on technology push has to incorporate estimates of acceptance of change. You see, technology push is the realm of the paradigm shift.  Predicting outcomes from the early side of the timeline is very tricky.  Customers for paradigm shift technologies may be scarce.  Not all companies are interested in being an early adopter or a buyer of first generation technology. 

Market pull is the domain of orthodoxy, of the rightous and proper company president who is also a CPA and who worked his way up the ladder from the accounts receivable department. Technology push is the domain of the engineers and scientists.  These are the dreamers who know in their hearts that if you build it, they will come.

Successful technology companies are somehow able to give a voice to the technology people in the allocation of resources.  Very often, these companies are managed by chemical engineers. While ChemE’s may not be trained in advanced synthesis R&D, they are involved in the scale up and economics of new processes.  Chemists live in a 2-dimensional world of space and time.  Chemical engineers live in the 3-dimensional world of space, time, and money.  Their knowledge of economics is what causes them to rise to the top of the corporate ladder more frequently than chemists.

It seems to me that companies that thrive today are those who do both market pull and technology push. Market pull is the cash cow.  Technology push is the seed corn for next years crop.

Greener Chemistry Through Catalysis

3 Replies

Recently a colleague and I were debating the reality of a fuzzy concept referred to as “green chemistry”. Being in the specialty chemical business, as opposed to the commodity chemical business, our discussion was naturally biased to the medium batch reactor scale.  This is no trivial distinction.  Raw material consumption and side product streams from commodity continuous-process trains can be astronomical in comparison to batch reaction operations.

There was the suggestion that the whole concept was absurd and was just the latest incarnation of a tree hugging export from CA.  I’m a little bit more circumspect about it, but one thing is obvious- economics will be the driver of any green process changeover.

I’m not an expert in the green chemistry field, but some of the concepts seem clear and highly desirable.  The goal is to minimize the total chemical insult to the environment. To achieve this, a green process has to be as atom efficient as possible in the assembly of the target product, recycle solvents to the greatest extent possible, avoid all toxic metals (Pb, Hg, Cd, Cr(VI), etc., metals are forever), eliminate fugitive emissions, and probably 6 or 8 other things I can’t think of right now.

As far as I know, certain metals are already on the path to extinction as reagents in chemcial processing- mercury and lead are the obvious ones. The battery industry still uses some unfortunate metals, mostly because of the reality of the electromotive series. There are only so many electrode combinations that are feasble for commercial batteries.

One of the obvious approaches that will get us to a greener chemistry is the continued adoption of catalyzed processes. I’m not thinking about acid protons, I’m thinking of highly selective transition metal catalysts.  Synthesis chemistry is about managing reactivity through the choice of appropriate functional groups and the sequence in which they appear. The chemist has to contend with the inverse relationship of reactivity and selectivity. Catalytic reactions form reactive intermediates from otherwise docile functional groups (olefins, boronic acids, or aryl halides, for example) and bring them together into close proximity in the coordination sphere of the metal. This is a kind of tuned reactivity management that reacts functional groups that, absent the catalyst, are relatively inert. All kinds of coupling reactions come to mind- the Suzuki coupling, etc. 

Now, to be fair, to get a substrate suitably functionalized for a green transformation might require some brutish and not-so-green chemistry- preparation of specialty aryls, acetylenes, and olefins; borylation reactions; the chemistry needed to make these whizbang ligands for Pd; and, well you get the point. The final greenness has to be measured as the sum of all the green steps from some common level, if not the oil well in Kuwait itself. 

Catalysis has the benefit of allowing the activation of relatively inert functionalities for subsequent transformations. Rather than making bulk quantities of highly reactive species, a catalyst can generate it in situ and do the deed straight away.  That is certainly in the direction of green.

On the cosmic shore

Leave a reply

One of the really cool things about living near Boulder, Colorado, is all of the science that happens there.  Boulder is a COLLEGE TOWN.  I put this in capital letters because the effect of the campus on the area has been substantial; in fact it has in many ways defined the area. The campus and the “Boulder Lifestyle” along the Front Range has attracted many institutions and companies to the Boulder area. Boulder is sort of the Berkeley of Colorado.

Boulder was hit hard by the hippy movement in the 1960’s and has never fully recovered. Today you can still spot old hippies wearing tie-dye and grey pony tails, gimping out of their BMW’s and into their expensive condo’s.  I’ll never forget when the Danskin craze hit Boulder in the late 1970’s.  My god …. I was nearly blinded.

Boulder has a NIST (National Institue of Standards and Technology) facility, formerly the National Bureau of Standards, which broadcasts time signals from the atomic clock on radio station WWV.

Within spitting distance of NIST is NCAR– National Center for Atmospheric Research. A small bit of the Woody Allen movie “Sleeper” was filmed on the Mesa Laboratory site.  In addition to watching the earth’s atmosphere, they also monitor the sun.

NOAA also has a facility in Boulder.  I’m not sure exactly what the mission of NOAA is relative to NCAR, but I do know that they are concerned with the interaction of the oceans with the climate.

The University of Colorado at Boulder hosts JILA, the Joint Institute for Laboratory Astrophysics, as well as LASP, the Laboratory for Atmospheric and Space Physics.  The upshot is that a lot of folks go to CU Boulder to study space science. I went to a few colloquia where Carl Sagan gave talks about various space probes. It was sublime.

Well, I really didn’t mean to write a valentine to Boulder, but there is a lot of cool stuff happening there.  Anyway, I recall as a part time student at CU in the late 1970’s going into some departmental office in Duane Physics and plopping down at a table to look at print copies of the Palomar Sky Survey.

These prints were negative prints of the sky, where the stars and galaxies were black against a white background. And what an amazing thing they record!  My gawd.  Galaxies and clusters of galaxies of all descriptions. Spirals and barred spirals and irregulars. These weren’t just “things”, they were “places”!  When you take the time to examine a deep sky survey, the thing that hits you is the large number of galaxies that are out there.  In fact, it is mind boggling.

It is impossible to view these images and not give it some metaphysical processing.  The notion that this big universe was fabricated by some cranky, jealous diety to host a nudist garden of eden on planet earth so that a pair of hairless bipeds can spend their time heaping praise upon him is simply what it appears to be. It is just absurd.  

The biblical story of creation is what you might expect from a people whose known universe was geographically limited to a circle of a few hundred miles radius.  The human brain is well adapted to note contrasts and dichotomy.  Light and dark. Warm and cold. Pain and pleasure. Left and right. North and south. Up and down.  We are enchanted by extrema and boundary conditions.  It seems to me that the archetypes of good and evil are a default dichotomy that human consciousness (or neurology)  spontaneously organizes when looking at the external world. 

The conclusion that the world must have been “created” is the result of a self imposed limitation in scope. The notion of cosmic creation by an anthropomorphic diety as opposed to an evolutionary process of nature is what you might expect of a culture that does not embrace the process of rational analysis and falsifiable conclusions.  Religion relies on the sacred, which is to say claims that are transcendent and beyond worldly analysis.  Religion has already made it’s conclusions and religious scholarship seems to consist of justifications of the conclusions.

Science is built on clay feet. A new tide of data arrives and the foundations are washed away to allow for new structures of understanding. Part of the great intellectual adventure of life is to decide where you stand. On the ready-made pillar of religion or barefoot on the beach of science.

Note: This is a distillation of my thoughts on religious matters. I’m sure that not a single concept or even blank space between the words above is an original thought, given the long and tired history of the topic.

Dark Lords of Industry

Leave a reply

When you squint into the jewel encrusted window of fabulous industry, you might naively conclude that the only truly powerful people in business are the show horses- the CEO’s, Presidents, and VP’s.  To be sure, these annointed ones do wield considerable power. They strut around like roosters, crowing the latest buzzwords with their Wharton MBA’s on their sleeves like the gold stripes on a Boeing 777 captain. They are, after all, “upper management”.  

You see, power in industry is the ability to allocate resources, that is, throw money at projects run by your stable of lackeys and courtiers.  However, there is a class of functionaries that you might mistakenly dismiss as mere scribblers or spreadsheet monkeys.  They quietly control a force so unspeakably powerful that they can make or break businesses, careers, or at least cause an unsightly crease in your trousers.  These dark lords of business are the keepers of the mighty industrial purse. The cashiers dispensing the elusive coin.

No, I do not mean those bovines of the cube farm, the accountants. I refer to (with utmost respect since one may be watching) Purchasing Managers. Purchasing managers, or supply chain managers, are the kingpins that award business contracts to that unworthy class of rabble called the “Vendor”. And what a loathsome bunch we are, always gnawing and clamoring nervously on our haunches across the moat for more scraps of fat. 

Just getting in to see a purchasing manager can be tricky. Forget about just popping in. Most businesses that buy specialty fine chemicals also have the réceptionniste sauvage who has -78 C acetone for blood.  Their role in life is to filter out the sales flotsam who may happen by.

You walk up to the reception desk in your dark suit with white shirt and blue and red tie and ask to see Mr. Smith.  In the world of sales men, fragrances are strictly for dandies from the European continent. Leave your airport duty-free store cologne in your suitcase where it belongs. 

The receptionist signs you in and phones the contact.  You stand there in waiting while Mr. Smith walks across the “campus” to meet you. He arrives and there is the exchange of pleasantries as security cards slap against sensors and you walk into a cubicle galleria. 

Mr. Smith leads you to a small sterile conference room with OfficeMax chairs where the clenched buttocks of countless other sales reps have plopped down before.  Bored looking people file in and business cards are exchanged with faint interest.  The door closes followed by what might be the faint slapping sound of sphincters slamming shut. The curtains open and you’re on center stage. It’s show time.

Marriage, Non-Overlapping Magisteria, and Deconvolution

5 Replies

I recently picked up a book called “Excel for Chemists” by E. Joseph Billo.  The book is written for simpletons like myself who use MS Excel but, for one reason or another, haven’t invested the time to become “Power Users”. The book has a chapter on the deconvolution of data.  For those who may not know what this is, it is a technique of extracting individual signals from coincident signals that are overlapped and therefore summed in the detected signal. 

Thinking about this concept of apparent signals as actually consisting of summed components got me to consider how the concept shows up in nonscientific aspects of our lives as well.  In particular, the controversial matters of the evolution of life and the definition of marriage come to mind as separate examples of convoluted “signals”.

One of the more strident voices out there on the topic of marriage is Rep. (R-CO) Marilyn Musgrave.  Musgrave is doggedly pursuing a Marriage Amendment for the US Constitution.  She and her party are concerned that the granting of marriage rights to same sex partners somehow threatens the sanctity and stability of marriage. This issue of same sex marriage is a sure-fire initiator of moral outrage and blowtorch sermonizing by the evangelical Visigoths of the airwaves.

I have heard no public discourse taking into account the fact that in the US, marriage is typically sanctioned under two spheres of influence. Parenthetically, it is along the lines of what Stephen Jay Gould has called “non-overlapping magisteria“. 

(Note: try to ignore for a moment the fact that divorce is the biggest threat to marriage and instead focus on what marriage actually is so we can move forward with this argument.)

Here is the deconvolution part. There are really two domains of marriage- 1) Marriage under the state, and 2) Marriage under the church.  In domain 1) , the state has a compelling interest in regulating marriage in part because it will likely be called on to intervene in the dissolution of the marriage agreement.  The interest of the state is in the disposition of minor children, property, debt, and other aspects of settlement. It is called divorce. Marriage is a type of partnership that almost always entangles others in a community, so the state has imposed its presence in the matter.

In domain 2), the realm of the supernatural interface, women and men are married by exchanging vows in the presence of the community and in plain view of the diety. In the end, as the doctrine goes, persons are accountable only to their creator in regard to their marital conduct on earth. Rules of conduct have been rendered liturgical and passed down through this formalism we call religion.  The dominant religion in the US is obviously Christianity and it is widely interpreted that marriage specifies the union of a woman and a man to be united in a bonding under the all-seeing, unblinking eye of the creator. 

The taxonomy that has shaken out over the millenia is that the term “marriage” has been widely accepted to mean the union of male & female. It conveniently aligns with the biological imperative for reproduction.  Centuries of precedent have made a strong case for a fixed definition of “marriage”.

However, in modern times there is growing interest in sanctioned same-sex pairings. Proponents argue that same sex partners should be accorded the same rights that are taken for granted with partners in conventional marriage. The more politically astute have advanced the term”civil union” and have argued that the state should construct a statutory or constitutional safe harbor. 

In the domain of the state, marriage is a type of partnership not unlike business partnerships.  A civil union can be thought of as a type of partnership, but with spousal rights that might be a bit more far reaching than that found in business.

Use of the term “marriage” when applied to same sex pairing will drive some religious citizens barking mad. Conversely, use of the term “civil union” is cynically dismissed as a transparent ruse to demolish the meaning of marriage by application of a sly semantic subterfuge.

By deconvoluting the problem, we’re left with two domains that historically have input on the issue of same-sex marriage- The state and the church. The states authority is backed by the courts and the penal code for enforcement and punishment.  The church can offer excommunication or other forms of dis-affiliation as earthly punishment and threats of punishment by searing hellfire in the afterlife.  

Conclusion.  At the very best, this is an issue that affects only a small fraction of the population of citizens. I have seen nothing that serves as a tangible threat to married citizens.  While I think that reserving the term “marriage” for opposite sex pairings is justified on the basis of precedent, I do think it is reasonable to codify similar rights and priviledges into an analogous partnership between same sex partners. It would be interesting to see if the Equal Protection clause applies. 

Note: This essay is a work in progress. Like a block of marble where the figure is inside waiting to be found by the artist, the rhetorical form of the point I’m trying to make is still partially buried in the marble. It takes me a while to find the form.  -Th’ Gaussling

Exponential Ignorance and the Rule of 70

4 Replies

For many of us, there have been a few characters in our past who have have made a deep and lasting impact. For me as a chemist, I have to report that one of those people was a physicist at a school I only went to part time.

Many years ago I was lucky to have taken a class at CU Boulder by Professor Albert A. Bartlett, or “A-squared” as he was affectionately known by a few. I recall that in true Boulder fashion, he was fond of wearing flannel shirts with a Bolo tie and heavy boots.  It was an elective class in the Physics & Society vein. Professor Bartlett was (and is) skilled in the art of back-of-the-envelope calculations to help people think about problems, even when you are lacking exact numbers- what science folk call “order of magnitude” estimates. He was good at looking at a problem, estimating key quantities, and sketching approximate trends and consequences.  This is a mark of a skilled scientist- peeling away the unnecessary details and deriving estimates from core phenomena or just F=ma.  

Professor Bartlett had written a paper called “The Forgotten Fundamentals of the Energy Crsis“.  Recently I happened to find it on the web while following another vein.  

Bartlett was fond of saying that one of our biggest downfalls as a society was the failure to appreciate the exponential function.  He reminded people that Malthus had already shown that the use of arithmetic was crucial to the understanding of population growth and by extension, the consumption of natural resources. 

To scientists, this is quite obvious.  But his audience was the general public. During his talks he would give the audience a small take-home gift. The ability to calculate doubling times by the “rule of 70” as some call it. By simply dividing the number 70 (approximately 100 x ln2) by a constant growth rate, say 5 % population growth in a municipality, you would easily compute a doubling time of 70/5=14 years to double the population.

This handly little calculation helps one think critically about the consequences of growth when you hear a town council member state that some particular growth rate is desirable. In the above example, a 5 % annual growth rate will require the doubling of many city services in 14 years- a fact that often goes unnoticed by the council and public.

Professor Bartlett is a true crusader in the campaign against innumeracy.  His personal example of the use of basic math to reason his way through the consequences of unchecked consumption of natural resources and to make persuasive arguments to local government was an inspiration to many of us. 

In Praise of Reverse Polish Notation

Leave a reply

I have been a devotee of calculator RPN notation since the mid 70’s. My first HP calculator was an HP 25C. For those who aren’t sure what it means, RPN stands for “Reverse Polish Notation”. For an eternity, in electronic industry years anyway, Hewlett Packard offered a variety of advanced calculators that used the RPN data entry format. Over the last 10 years or so, this blessed notation has been going the way of the Dodo.  Gradual extinction. 

As they explain it on the HP Museum of Calculators web site, RPN was named after a Polish mathematician named Jan Lukasiewicz who developed a logic in the 1920’s that allowed for the removal of parentheses in calculations.   Years later, computer scientists were able to apply the unique juxatposition of operators to the operands in first in last out (FILO) recursive stack manipulations. 

HP maintains that the term RPN is a type of homage to Lukasiewisz, and it may very well be. But, why isn’t it just “Polish Notation”? Here is my guess.  Up through the early 1970’s, the Archie Bunker years, Polish jokes were quite popular. In those days it wasn’t unusual for oddly configured devices to be referred to disparagingly with the adjective “Polish” and an especially strange contrivance might be further described as “reverse Polish”. My guess is that the word “Reverse” in RPN was from this vein of English usage.

I write to lament the decline of this intuitive and useful mode of computation. My guess is that onslaught of Japanese calculators (Sharp, etc) into the US market from the 1970’s onward with their algebraic entry format was an easier sell to the mathphobic masses.  Death by faint marketing.

College bookstores still offer a few versions of the RPN calculator and OfficeMax does offer the HP12 business calculators. But sadly, there does not appear to be any kind of revival anytime soon. There may be pockets of users out there, but we seem to be getting fewer in number.  It’s fun to watch people borrow your RPN calculator only to find that there is no “=” key. They quickly hand it back, grumbling as they look for another.

The secret life of the chemical industry soldier

2 Replies

A few more blogs have been added to honored positions on the Illustrious Blogroll.  Check them out.  Lots of good bloggers (Bloggists?) with penetrating commentary on the current literature. 

Blogging is a bit harder for industrial folk. Or should I say riskier? One of the unfortunate realities of working in Fabulous Industry is the matter of secrecy.  You can’t discuss any of the fascinating stuff you work on with your buddies in academia. You know, chalk-talk stuff. The pay is good in industry (they fit you with golden handcuffs early) and the chemistry is fascinating, but the sad part is that it is nearly all confidential. When the conversation turns to sensitive material, people become noticeably uncomfortable. And they should.

Meetings with site visitors begin with the standard preamble- “You’ll recall that we are speaking under the conditions of our Non-Disclosure Agreement.  We at MegaLithium Company are in the XYZ business and have no need for any information from you beyond what is required to evaluate the project. We really don’t want to know your secrets.” Usually a well manicured and coiffed senior honcho says this. If the sleeves of his white shirt are not rolled up and his head shines with a high gloss, he is probably one serious SOB. This would be the alpha male and his underlings will studiously follow his lead. Often, there is a tour following the meeting.

As you take the tour you’ll find that the guides are not appreciative of breaching the decorum of secrecy, so blatantly nosey questions can cause them to throttle back the gee-whiz stuff. It’s always best just to nod appreciatively, pay attention, and be grateful for what you get to see.

I’ve been on both buy and sell sides of the secrecy matter.  I have hosted plant tours for visitors who were less than upfront with their intentions.  You see, in the custom chemical Business to Business (B2B) world when someone requests a price and availability, there is some chance that they have no intent on buying anything.  Their real intent may be to get scaled pricing and an estimate of the annual sales turnover for a product. It’s called competitive intelligence. And pricing intelligence is the most coveted of all.  Typically, this is only true for customers who may be competitiors. 

Here is some good advice.  If you’re about to sign a secrecy agreement, look for a clause providing for the reduction to writing for all Information to be considered Confidential.  These words are in bold because they are key words in a secrecy agreement. A good secrecy agreement will go to great pains to define what is meant by Information. If the other side is going to take you to task for a breach in confidentiality, then exact information that they consider sensitive had better be reduced to writing so you have a fair chance of avoiding a breach.