The Baekeland Story Marc Lambrechts New Materials Venturing Day - 2007-12

Gent - 19 December 2007New Materials Venturing Event

Many thanks for Johan to ask me as “Chinese volunteer” to give this introduction . I di d l i l /i d i li d h d i h i h idiscovered a real serial entrepreneur/industrialist and have read with passion the variety of Baekeland stories and material you can find in electronic archives on the internet and the several books about or written by Leo Baekeland. The Baekeland story confirms actual VC investment strategies and provides food for thought on the best business models for material ventures.

Thanks to Kristien De Wolf for the assistance in preparing the slides and the background h f dresearch performed.

Please feel free to use but respect the following creativecommons licence http://creativecommons.org/licenses/by-nc-sa/2.0/be/deed.en

Universiteit Gent & Marc Lambrechts, Capricorn

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I discoved a common background with Leo!

Boyhood interest in photography Inspired by all the chemicals my grandfather has used to make its own photographic

formulationAbove a restored picture made by my grandfather Marc Jansen, TienenI am currently digitizing and restoring an extensive collections of glass plates from my

df thgrandfather => converting fading atoms into electrons back in hopefully stable atoms on my hard

disk



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The timeline with the main events in the live of Leo.

Picture is the Time cover of 22 September 1924.

“Nothing succeeds like success” = a quote used by Leo at several occasions



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Second half of the 19th century :- Photography was only available at fairs and known by only a few amateurs - These pictures are from Arnold Vander Haeghen, an amateur photographer in Gent www. www.beeldbankgent.be- Industrial revolution- Automation in metal and textile industry- Logistics improve dramatically- Trade and financial world bloomingg- Chemicals companies grow (Solvay)

But also: - Bad social circumstances - Socialism and strikes

Global Entrepreneurship Monitor (GEM) – was Leo’s move to the US the catalyst for high gro th?high growth?

Inventarisnummer: 2004-247-099Objecttype: glasnegatiefTitel: Betogende jonge mannen tijdens de werkstaking van 1893Beschrijving: Jonge leden van de Gentse metaalbewerkersbond op het Koophandelsplein tijdens de werkstaking van april 1893. Duizenden mensen deden mee aan de algemene staking en kwamen op straat om te betogen voor algemeen stemrecht. Deze jonge arbeiders passeren net het justitiepaleis. Ze zijn vermoedelijk op weg naar een meeting op het Sint-Pietersplein Het bordje dat meegedragen wordt heeft alsvermoedelijk op weg naar een meeting op het Sint Pietersplein. Het bordje dat meegedragen wordt heeft als opschrift: "Gent metaalbewerkers bond".Straat: Koophandelsplein Plaats: GentVervaardiger: Vander Haeghen, A.Beginjaar datering: 1893 Eindjaar datering: 1893



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Leo was born out of a poor family – for all clarity in Gent and not in Sint Martens-Latem. Both his father and mother were illiterateBoth his father and mother were illiterate.His father was a shoemaker and had a pub “Au Jardin du Glacis”His visionary mother, a domestic servant, stimulates Baekeland to study

He studied chemical technology at the Ghent Municipal Technical School

1880 – entered the first year at the Ghent University and became a lecture assistant and tutor to earn some extra money to support his studies“ a boy in humble circumstances could make his way by his own effort”

1884 - at the age of 21: Dr. in Science with a magna cum laude gradeContinued to work at university and as lecturer at a school in Brugge

1887 – won a prestigious prize “laureate in chemistry” a gold medal and a travelling fellowship to visit universities in London, Oxford and Edinburg: “ votre nom est inscrit dans notre livre d’or. N’oubliez toutefois jamais que noblesse oblige”

Key enablersLeo’s motherScolarship of the City of GentLaboratory started by Kelule – the facilities to perform researchProf. Theodore Swarts – his mentor and professorDr. Désiré Van Monckhoven – the first producer of photographic plates in Gent and instrumental in the photo industry

Leo remained passionated by photography as an amateur and by photographic processesLeo remained passionated by photography as an amateur and by photographic processes

1887 – first invention “a dry glass plate with chemicals added on the back”



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1887– first company ‘Baekeland & Cie Scheikundige producten’

Business partner and investor Jules Guecquier whose father earned his wealth in real estate

Jules was a wealthy colleague at the university, a friend (and a fool?) and owner of the building the company started in

Best man at Leo’s wedding

Palinghuizen 120

First customers were friends

Baekeland’s first ent re does not s r i e the “Chasm”Baekeland’s first venture does not survive the “Chasm”.

Combines 2 jobs & company, Leo left after his marriage to the US and left as key man his venture in Gent in the cold

the company failed => financial catastrophy for the Jules Guecquier family – he spent his complete fortune in this venture according to his daughter.

Note – patent is one page long



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Prof Chandler = consultant to Anthony and Co – manufacturer of photographic dry plates d b id h i iand bromide photosensitive paper.

1892 Leo filed a US patent on an antiseptic compound for preserving meat and fish!

Leo gathers industry experience – in this regard Leo said later in his live (1918?) :

“I feel very grateful for the excellent opportunities of educationI had at the University of Ghent. I should state, however,that my real intense education only began after I had left theuniversity, as soon as I became confronted with the big problemsand responsibilities of practical life; this education I receivedmainly in the United States, where for twenty-seven years Iwas thrown in contact with so many varied subjects. I hopeto remain until I die a post graduate student at that greaterschool of practical life, which has no fixed curriculum and whereno academic degrees are conferred, but where wrong pettytheories are best cured by hard knocks.”



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Leo wants to be free to work on a range of ‘interesting things’.

Becomes an independent chemical consultant

But …no means to create a real industry

Becomes ill and overworked

A cash crunch and “depression” lead to sober reflection.

The outcome : focus on a passion => photography

Text on slide is statement from Leo. Source : Biographical Memoir Of Leo Hendrik g pBaekeland 1863-1944 by Charles F. Kettering – page 284



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Starts to focus again and starts his second venture: Nepera Chemical company to commercialise Velox photo papercommercialise Velox photo paper.

First substantial sales in 1897 – Leo crossed the chasm!



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Production problems related to controlling humidity in the process (static electricity). To solve this problem Leo also built air conditioning systemssolve this problem Leo also built air-conditioning systems.

In a paper presented in 1903 he said: "In photographic paper factories hygrometers and electroscopes should be consulted as often as the thermometer.“

Text on slide is statement from Leo. Source : Biographical Memoir Of Leo Hendrik Baekeland 1863-1944 by Charles F. Kettering – page 285y g p g



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1899 - sold the company to Kodak for 750.000 $ + 100.000 $ for additional knowledge <> 25 000 $knowledge <> 25.000 $

It is unclear if this story is true – 750,000 versus 1 M – a letter from Leo to his friend in Belgium exists describing more than 4 visits of Leo to Eastman



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Boat – the ION

A Family Tour through Europe – described in a book by Leo Baekeland and published by the Horsless age

Snug Rock in Yonckers NY overlooking the Hudson river

“Thus at thirty-five I found myself in comfortable financialcircumstances, a free man, ready to devote myself again to myfavorite studies. Then truly began the very happiest period ofmy life. I improvised one of the buildings at my residence inYonkers into a modest but conveniently equipped laboratory.Henceforth I was able to work at various problems of my ownfree choice. In this way I enjoyed for several years that greatblessing, the luxury of not being interrupted in one's favoritework.”

Source : Biographical Memoir Of Leo Hendrik Baekeland 1863-1944 by Charles F. Kettering – page 285



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Learned during his sabbatical about the potential of electrochemistry

Leo was a consultant instrumental in the start of Hooker Chemical Company (later known as OxiChem)

His contribution = not the invention of the electrolytic cell but the stepwise improvement to a system that works in an industrial environment – common theme in his contribution to the Velox Hooker and Bakelite success?to the Velox, Hooker and Bakelite success?



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The shellac issue was one of the hot topics of chemical research at the turn of the Th l f h ll h i f h f l L if lcentury. The sole source of shellac was the excretions of the female Laccifer lacca

beetle, found only in India and Southeast Asia, i.e. a biobased material!



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The famous patent that is 100 years old (source www.google.com/patents); 3 pages!



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Picture source : Brochure UGent , gazeTTe 2007-06

Applications as electrical insulators, radios, photographic equipment, toys, tableware and even prestigious jewelry



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For further discussion – how Leo positioned his resin invention into the value chain of raw material manufacturers, moulders and end-users. Different strategy for Europe and US?



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Source : Biographical Memoir Of Leo Hendrik Baekeland 1863-1944 by Charles F. K i 288Kettering – page 288

For discussion : is a licence-only based business model feasible for material venturing start-ups today? Any succesful examples?



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1939: Merger with Union Carbide



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Leo was also an active networker and involved in improving the US patent system

Source of the quotes : Biographical Memoir Of Leo Hendrik Baekeland 1863-1944 by Charles F. Kettering – page 290

Picture :Report of the Patent Committee of the National Research Council*Presented for the Committeeby L.H. BaekelandActing Chairman



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Read carefully and take into account in your venture or when deciding on investment!

The Chandler lecture is a pleasant read – available as free electronic download on www.archive.org



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Too late for making money from the tragic story of murder and suicide in the Baekeland f il h fil S G ill b l d i 2008 F h i d ifamily – the film Savage Grace will be released in 2008. For those interested in chemistry, the story in Save Grace is about the personal chemistry between a son, a mother, lovers, .... and yes personal chemistry of an explosive nature.

Industrial chemistry started by the need to replace biobased materials (e.g. fertilizers, resins, ..) by synthetic material. Today we see a great interest in replacing again synthetic (fossil fuel based) materials by renewable biobased materials.

Solar PV, wind turbines, fuel cells, batteries or other technologies for energy storage all depend on breakthroughs in material research

Technology fusion is a key enabler in several giant opportunities. But ... multidisciplinary teams required.



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The Baekeland Story Marc Lambrechts New Materials Venturing Day - 2007-12

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