Senior Lecturer Jeff Bussgang discusses his case study.
Brian Kenny: Here's a little Cold Call trivia for you. What do lipstick, pizza dough, and biodiesel fuel have in common? And the answer is palm oil. Palm oil is one of the most widely used ingredients in the world. You'll find it in 50 percent of the products on supermarket shelves from laundry detergent to cookies. Americans consume about eight and a half pounds of this stuff every year. 85 percent of the world's supply is produced from palm trees grown in Malaysia and Indonesia where deforestation is a growing concern. That is precisely the opportunity that Shara Ticku and her co-founders saw when they created C16 Biosciences, a startup whose goal is to be to palm oil users what Impossible Burger is to meat lovers. The opportunity is real and so are the challenges. Today on Cold Call we'll discuss Professor Jeff Bussgang's case entitled, C16 Biosciences: Lab-Grown Palm Oil. I'm your host Brian Kenny and you're listening to Cold Call.
Jeff Bussgang is part of the entrepreneurial management unit at Harvard Business School. He is co-founder and general partner at Flybridge Capital Partners, and he studies lean startups as well as strategy and management challenges for founders, all of which is perfectly appropriate for today's conversation. Thanks for joining me, Jeff. Jeff Bussgang: Pleasure. Great to be here. Brian Kenny: I thought this was a really, really interesting case. I had no idea that palm oil even existed but apparently it's a real big thing. Jeff Bussgang: It's amazingly pervasive in our food, in our cosmetics, in lotions everywhere. It's extraordinary how much use we all have of the oil. Brian Kenny: I think people would really enjoy hearing about C16 and what they're trying to do, particularly in the wake of the Impossible Burger and other developments like that that seem to be taking place. But let me ask you to start by telling us what would your Cold Call be to the class in this case?
Jeff Bussgang: Well, you teed it up a little bit with your comment about Impossible Burger. This is a company like many tough tech companies pioneering a market where they have to decide what's my first application going to be? Shara's initial thinking was, let's start with the easy application, which is cosmetics, and there are a number of issues with that choice, until she begins to realize and news comes to the fore that Impossible Foods and Beyond Meat have raised an extraordinary amount of capital at extraordinary valuations. Her vision had always been to get into food. That's where the big use of palm oil is. She had thought, well, I'll get there in a stepwise fashion, but now with this news, the question that Shara has, and this is the cold call that I asked the class, is: Would you take advantage of the buzz and momentum that's happening right now and jump into food directly as ambitious as it is, or do you stay focused on personal care first with the intention of going into food later?.