Algaeon, Kip Zurcher
Algaeon, an Indiana-based biotechnology company, was formed as a Delaware C Corporation in 2011, and produces an algae-derived highly concentrated Beta glucan via a proprietary approach.
Beta Glucan, an immune health promoter, has numerous applications in the Human Nutraceutical, Functional Foods, Cosmetics, and Animal Feed markets.
Algaeon’s approach offers the benefits of high efficiency and low-cost for large-scale production. Algaeon has developed tailored products for industry leaders.
When and how did the initial idea of creating your own company come about?
Algaeon initially formed to create biofuels from algae. While this path has been taken by other companies, with varying degrees of success, Algaeon needed to find a path that was not so capital intensive.
As our company developed more experience with algae, we began looking at other target molecules that could be produced by these organisms. Algaeon pivoted in 2012 to create high-value nutritional products from algae.
The development cycle is long, and we have had very supportive investors to help us achieve a successful commercial pilot.
What was the greatest hurdle to overcome?
We were like most start-ups….we had limited resources. From an operational view, we had to balance three fundamentals.
(1) We had to have scientific breakthroughs.
(2) We had to create the methods of scalable production.
(3) We had to find a way to commercialize algae.
All three of these fundamentals had to be addressed simultaneously. We have very supportive investors, including BioCrossroads. We also developed a good relationship with a commercial partner that has helped us navigate these unchartered waters.
What was the most important thing you have learned?
Hire the right people. As a start-up, it is very easy to mistake activity for achievement. It is easy to confuse someone’s busy calendar for progress. We have made some strategic hires that allowed us to build a team that is experienced, hungry, and energetic. This company chose a path to create a disruptive product, and it can only be successful with a team of subject-matter experts who are extremely driven to win.
Who has had the greatest influence on you professionally?
I have had the opportunity to have many mentors over the years. I had the pleasure of working for two CFOs at Brightpoint, Tony Boor and John Ludwig. Tony set high standards for everyone, and he has the ability to motivate people to tackle incredible challenges. He expected your best efforts and he had a way to inspire you to achieve more.
John Ludwig is extraordinarily intelligent and has the best work ethic I have ever seen. He had an amazing ability to analyze difficult situations and then define the path forward. He also expected greatness from everyone, and we had to bring our “A” game everyday just to keep up with him.
Both of these men are defined by their intelligence, integrity, and commitment to excellence. Now that I am leading a company, I have gained a better appreciation for the exemplary leadership of Tony Boor and John Ludwig.
Where were you when you pitched, and where are you today?
First time we pitched, we were focused on making biofuels from algae. The economic model ultimately did not make sense. Since then, we pivoted to higher value products from algae for the dietary supplements, functional foods, cosmetics and animal feed markets and have signed multi-year, multi-million contract with one of the largest nutraceutical companies in the U.S.
What has surprised you the most about your entrepreneurial journey?
We have been pleasantly surprised with the number of people willing to help. As we have shared our story over the years, we have received countless ideas from vendors and customers. I often start a conversation saying that “we have this problem, and would welcome your thoughts.” I think most people want to be part of a successful team, and the amount of support we have received from others continues to surprise me.
Was there another startup’s pitch that you particular enjoyed, and why?
OrthoPediatrics – explaining how they were introducing products that focused on an unmet need orthopedic devices for children. Since then the company has seen huge success.
What was the most significant piece of feedback or advice you received from the Venture Club?
The importance of a good management team. The success of a company is determined by its people.
Has the Venture Club helped you out in any other ways?
The strength of the Venture Club is the networking with investors and services that start-ups can contract. It is always encouraging to hear the stories of other start-ups. The Venture Club does a great job of helping start-ups deal with the key issues that can get in the way of success.
How would you use to describe the state of the venture and startup environment in Indiana today?
We would argue that the environment for startups has never been more active in Indiana.
How has the venture/startup community changed over the years?
The media covers the “hot” software startup environment. It seems that many startups are extensions of the solutions developed by Aprimo/Teradata, Exact Target/Salesforce, and Interactive Intelligence. With thousands of people working at these large software employers in Indianapolis, it is common to see people leaving the big company life to chase dreams of startup success.
While not in the headlines as often, we hear a lot about the startup activity in Life Sciences and Ag Tech. With statewide initiatives like AgriNovus and BioCrossroads, Indiana continues to encourage the startup community and to attract investments.
What advice would you give to others who are considering pitching to the Venture Club.
By pitching, you are helping others understand that they too can work through the start-up process including the rollercoaster of ups and downs with the business. You can also learn about key changes that you may need to make to your business plan and how to raise funds.
Give us a 30 second pitch for why we should hire/invest in/buy your company/product.
Algaeon makes high-value products from algae that are immune system enhancers. Given the unique advantages of our products, initial market feedback and studies show huge demand. Our products are premium substitutes in markets that had prior year sales of $500 million.
Algaeon partners only with the strongest formulators with mature sales channels in four key markets, including functional foods, nutraceuticals, cosmetics and animal nutrition.
Algaeon has achieved three critical milestones:
- operating a successful commercial pilot;
- securing a multi-year, multi-million dollar contract; and,
- building a management team of experts with a track record of success.
We are working hard on our next milestone, developing a significant increase in production capacity, which will come on-line in 2016.
Algaeon is positioned well for success, and we welcome the opportunity to have you join us.