Chiang gives insights on founding successful startups
December 10, 2022
From left to right, Mateo Jaramillo, Ted Wiley, William Woodford, Yet-Ming Chiang, Marco Ferrara, the team from Form Energy. Photo courtesy of the Engine
Yet-Ming Chiang has been a professor at MIT for 37 years. Over that time his primary mission has been to conduct original research and educate students, but along the way he’s also become a very successful entrepreneur, co-founding several startups based on his discoveries in materials science. These include two unicorns, or private companies valued at over $1 billion, as well as three that have become publicly listed.
Recently Chiang talked about his experiences in moving university research into the marketplace as the first speaker at a two-day climate tech summit sponsored by SOSV, a global venture capital firm. Among his insights: how to identify potential spinoffs from the myriad research projects in his lab, the importance of being flexible as a young company grows, and how both startups and established companies can feed research ideas back to the university in a kind of circular economy.
At MIT, “our mission is to do original research and educate students,” said Chiang, the Kyocera Professor of Materials Science in the Department of Materials Science and Engineering. But “every once in a while you have a convergence of events—the right people recognizing a need, then an idea to meet that need—and a company gets spun out.” He emphasized that only about one in 10 research projects from his lab ever meet those criteria, and “we have never embarked on a project with the idea of spinning out a company.”
Chiang, who is also affiliated with the Materials Research Laboratory, went on to note that projects that do lead to startups address problems in emerging fields as opposed to fields that are already well established. “I would put lithium-ion batteries in [the latter category],” he said. “Startup companies in lithium-ion batteries were warranted a decade ago or more, but today it would be difficult to start a brand new lithium-ion company, in my view.”
Once a new company has formed, Chiang said, it’s “important to recognize that there [may] be major pivots in the actual technology path” toward a product. He gave as an example Form Energy, one of his own startups. “We started the company with one concept—a sulfur-based battery for long-duration storage—but [ultimately] chose a different technology, iron-air batteries," he said. “In the end it’s solving the problem, not the origins of the company that matter.” (Form Energy is one of the climate tech unicorns co-founded by Chiang; the other is Desktop Metal.)
Chiang also addressed the “circular economy” of research ideas traveling from universities to companies and back again. Historically that pipeline has focused on university research that spawns startups, but “what I’ve been recognizing is that a lot of great ideas germinate inside the startups, and we need to open the flow [of those ideas] so that it goes back in the other direction.” The scientists-turned-entrepreneurs behind a company often come up with additional ideas that may not fit the scope of the company, or may take too long to explore. “With the startups I work with, I’m finding ideas that I bring back to MIT” to follow up on, he said. And those ideas, in turn, can lead to additional startups.
For example, while on sabbatical at A123 Systems, a lithium iron phosphate battery company he co-founded in 2001, he came up with an idea for a new way to manufacture lithium-ion batteries. “But it was very early and needed a lot of research,” so with the agreement of A123 management he took the idea back to his MIT lab. Ultimately, that led to yet another startup, 24M Technologies.
Chiang is optimistic about the future for climate tech, especially given the Biden administration’s Inflation Reduction Act (IRA), which “includes the largest investment in clean tech we’ve ever seen,” he said. Thanks to a combination of the IRA’s broad-based support, technologies that are reaching maturity, and the readiness of the markets, “I think it’s going to be a very exciting time in the coming few years.”
Chiang made these and other comments during a Q&A with SOSV Partner Benjamin Joffe titled “How to Invent Climate Unicorns.” The discussion is available online.