Building a start-up within nanotechnology is full of challenges. This is especially true when going directly from academic research to applying the ideas to a novel product. Copenhagen Nanosystems ApS (cphnano), a Danish start-up with 10 employees, has nevertheless taken up these challenges and managed to overcome many obstacles on the way.
In this interview article, Emil Højlund-Nielsen, Ph.D., CEO, and co-founder of cphnano, shares the inspiring story of the company’s journey in the pursuit of making advanced lab analysis more affordable and disrupting an industry with digitalization. Additionally, he gives valuable advice to people considering a start-up carrier within tech.
Content
– Challenges of building a tech start-up
– Advice for future tech entrepreneurs
What is cphnano?
“A labtech company that develops digital laboratory analysis and diagnostics for the smart lab of the future”. cphnano offers solutions for spectrophotometers and spectrophotometry by digitalizing the process of doing lab analysis.
Using a nanofabricated photonic crystal, their lab cuvette, NanoCuvette™ One, allows for advanced measurements with only a simple set-up. This drastically increases the analytical capabilities of a spectrophotometer, which is one of the most widely used equipment to investigate liquids.
Ordinarily, liquids can be investigated by sending a spectrum of light through a plastic or glass container with it, known as a “cuvette”. Depending on the type of liquid, light at specific wavelengths will be absorbed more than at others. This can be measured in a spectrophotometer and then be translated to other valuable properties such as the concentration of an analyte. However, in other cases the refractive index is a more informative number to look at.
The refractive index can be measured with NanoCuvette™ One by combining the nanofabricated photonic crystal and a standard lab cuvette. By simply turning the cuvette 90 degrees, both the absorbance and the refractive index can be measured in a spectrophotometer.
How did it start?
When doing research within academia, many new technologies can seem an appealing way to solve the world’s issues or create exciting new products. The technology does, however, need to be economically feasible and work outside a complex lab set-up if it is to be implemented commercially. It is important to consider not only the end product, but also the production and implementation process. Sometimes, while building a completely new machine can cost millions, there are alternative ways to integrate the technology into already existing products, offering the same result at a much lower cost.
Emil explains how cphnano has followed the latter tactic. The idea of building a company first came from Kristian Tølbøl Rasmussen, another co-founder, during his Ph.D. at the Technical University of Denmark in 2015. At that time, he was working on a mature technology that had undergone thorough research from several other Ph.D. students. Together with Emil, the two engineers came up with a way to use the technology in a product that itself would not break the bank.
The idea was first to create a machine by making a compact version of what worked extremely well in the lab. This machine, however, would at least cost 5 million DKK to build. Thus, a customer would have to pay a large amount upfront.
“At some point, we looked at the lab set-up and saw that it was extremely similar to a spectrophotometer, apart from the unique nanostructured crystal. Next morning, we taped the crystal to a regular lab-cuvette and performed measurements that worked right away”.
Emil explains how this made the business case intriguing as the cost would then drop enormously while creating a large value for the customer. “Starting with something simple is a good thing. It will easily get complex with technical and logistical challenges along the way”. Another advantage is that it is possible to iterate the lab-cuvette and software each year to improve it in newer versions. This is simply not possible when building an expensive machine which the customer uses for many years.
Lastly, what made the business case interesting was that the roadmap to get the product to the market initially seemed short because strict regulatory approvals are only needed for the spectrophotometers and not the cuvettes.
Challenges of building a tech start-up
While there might have been many years of research within this field prior to cphnano, one thing is a lab set-up that researchers can use, another is the consumer-friendly product that is durable and lives up to the expectations every time. Emil puts this point concisely:
“In the scientific community, the best chip on your wafer is evaluated. In the industry, you are evaluated based on your worst chip.”
Another important point he brings up is that each face of a start-up’s journey has its own set of challenges. Some of these challenges might be larger than anticipated, which causes a longer road to market.
The obvious first challenge for cphnano was to optimize the fabrication of the photonic crystal. However, as they succeeded, it turned out that an even bigger challenge was to make their product work across different spectrophotometers and work with the different data formats they present.
“In Denmark, there are around 200 different models of spectrophotometers that our technology needs to facilitate”.
To solve these challenges a company needs the right set of competencies. However, since start-ups’ budgets are limited, it is crucial only to hire the people with the right skills needed.
A big challenge is that the skills needed change over time. cphnano, who integrates physics and nanotechnology with chemistry, biology, and software development, has therefore had to shift employees in and out to match the competencies needed.
While their team started out with mainly clean room competencies, today the company consists of just as many competencies within biotech and software development. Furthermore, Emil explains how skills within marketing and sales have been added in the process of the company becoming commercial ready. Naturally, the skills needed will vary depending on the type of company, but it is important to keep in mind what tasks need to be solved at the time.
Advice for future tech entrepreneurs
The first piece of advice is: “don’t do a start-up”. Do not build a start-up unless it is something you are extremely passionate about. In Denmark, a job with a salary is a far better option economically, as success is not guaranteed. Nevertheless, a start-up requires a full-time commitment and a big responsibility towards one’s employees, so it is not for everyone.
The second piece of advice is: Do your research and ask people who have a lot of experience within the industry that you are considering. It is quite easy to convince oneself that a business idea is good, but reality can be another story. Hence, planning is extremely important.
The third piece of advice is: Learn from other people’s mistakes. There is extremely small room for making mistakes in a start-up, and many can be avoided simply by asking people with experience. Emil compares how larger companies can invest in research projects without going bankrupt if they fail, whereas in a start-up you often have just a single shot to make it work.
The last piece of advice is: Understand the funding game. This varies depending on which country you start a company in, but it can certainly pay off to do some research on where to seek funding to get started. High wages in Denmark is especially a challenge for tech start-ups. Moreover, the tax on investments is high (42 %), which means that the capital available is a lot smaller than in other countries.
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