Sto case study spreads

Page 1

® LOTUSAN BY STO

SYNAPSE.BIO | 1 by Biomimicry 3.8


TEXT PLACEHOLDER Cover Photo: Example of Sto Lotusan architectural coating at site in Germany

by Biomimicry 3.8

A BIOMIMICRY CASE STUDY

LOTUSAN ® BY STO

The commercialization story behind the architectural coating that mimics the lotus leaf in order to self-clean and conserve water.

Published by Synapse by Biomimicry 3.8 Written by Biomimicry Business Intelligence

© 2017 Biomimicry Advisory Services & Biomimicry 3.8. All rights reserved.


Photo © Sto Corp.

4 | SYNAPSE.BIO

BIOLOGY

DESIGN

The surface texture of the lotus leaf naturally self-cleans

Lotusan paint mimics the surface texture of the lotus leaf for a low maintenance finish

SYNAPSE.BIO | 5


Forward Biomimicry for Innovative Business Opportunities Biomimicry is not itself a product but a process, drawing on strategies observed in natural organisms and practices in order to spark innovation.

Biomimicry (from bios, meaning life, and mimesis, meaning to imitate) is a scientif ic design discipline that seeks sustainable solutions by emulating nature’s time-tested patterns and strategies. The core idea of Biomimicry is that nature,

08

CONTRIBUTORS & SUPPORTERS

06 13

EXECUTIVE SUMMARY

17

INDUSTRY OVERVIEW

23

COMPANY OVERVIEW

30

COMMERCIALIZATION PROCESS & STRATEGY

39

FINANCIAL STRATEGY

48

FORWARD

after 3.8 billion years of research and development, has already developed solutions to many of the problems facing industry, government and agriculture. Such problems include packaging, transportation, energy production, non-toxic chemistry, carbon sequestration, and crop production.

6 | SYNAPSE.BIO

CONCLUSION

SYNAPSE.BIO | 7


TEXT PLACEHOLDER

Contributors & Supporters RESEARCH AND EDITING Jacques Chirazi, Managing Director & Senior Editor, Biomimicry Advisory Services Constanza Jozami, Editor Gabriel Canale, Editor Mathias Einberger, Research Analyst Jeffrey Reinhold, Research Analyst Xinyi Wang, Research Analyst

ADVISORS Rosibel Ochoa, Executive Director, UC San Diego von Liebig Entrepreneurism Center Stuart Valentine, CEO, Centerpoint Investing Beth Rattner, Executive Director, The Biomimicry Institute Hazel Henderson, CEO, Ethical Markets Certified B Corp Katherine Collins, CEO HoneyBee Capital Jamie Brown Managing Partner, Biomimicry Switzerland Douglas Kot, Senior Sustainability Professional, DNV GL Beth Brummitt, CEO, Brummitt Energy Nicole Miller, Managing Director, Biomimicry 3.8

8 | SYNAPSE.BIO

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TEXT PLACEHOLDER

Executive Summary Sto Corp. is a multinational company, founded and headquartered in Germany, and a global player in the construction industry. Sto Corp. is its wholly owned subsidiary in the United States. Its three key markets in the U.S. are Exterior Insulation Finishing Systems (EIFS), stucco, and architectural coatings. While all three market segments are rather heavily tied to the health of the overall economy, EIFS and stucco can be seen as very mature markets that are expected to continue to grow at a very measured pace in the near future. Architectural coatings on the other hand constitute a relatively new key focus area of Sto Corp. where it hopes to achieve strong growth rates over the next few years through the roll-out of biomimetic innovations, such as Sto’s signature Biomimicry paint and coating product Lotusan.

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TEXT PLACEHOLDER

LOTUSAN ® Lotusan is a biomimetic paint

Twenty years elapsed

Sto’s commercialization of

increasingly capitalize on the

Sto seems to have learned

and coating product based on

between the initial discovery

Lotusan in Germany was a

innovative selling propositions

to slowly, but increasingly,

the Lotus-Effect®, discovered in

of the Lotus-Effect and its first

huge success and the brand

of this biomimetic innovation

embrace this innovative biomi-

the 1970s by German botanist

commercial application, the

today is widely known. In the

in its U.S. coating go-to-market

metic potential in growing its

Professor Wilhelm Barthlott.

first Lotusan paint, in the late

U.S. however, Sto Corp. has

strategy, Sto Germany has also

business not only stronger, but

By using the (at the time)

1990s. Initially, Prof. Barthlott

until recently only slowly been

been developing a new biomi-

also in a more sustainable way.

recently developed Scanning

was met with sheer disbelief,

rolling out Lotusan due to

metic successor product to

Electron Microscope (SEM)

suspicion, and outright hostility

a larger corporate focus on

Lotusan, based on the Namib

technology he systematically

both in the scientific and indus-

the EIFS and stucco market

beetle. The company currently

studied surface structures of

trial community. His biomimetic

segments. Together, these two

estimates a compounded

plants on a nanoscale for his

breakthrough was so radically

segments constitute roughly

annual growth rate for its

academic research. Thereby

different from the conven-

65% of the overall U.S. market,

super-hydrophobic coatings of

Prof. Barthlott discovered the

tional wisdom at a time, when

while architectural coating,

10-12%.

self-cleaning properties of

nanotechnology was not yet an

the category which includes

super-hydrophobic (highly

established concept, that no

Lotusan, currently makes up

The historic success story of

water repellent), hierarchically

one believed in the authenticity

only 17-18%. Due to substan-

the Lotus-Effect and Lotusan,

structured plant surfaces—a

and viability of this biomimetic

tially higher expected future

as well as the obstacles that

concept perfected in the

innovation. Both academic and

growth rates in coating, and

have been encountered

Nelumbo Nucifera, the Sacred

industrial interest eventually

fueled by a contract to repaint

in their commercialization

Lotus.

began to manifest itself

all Lowe’s hardware stores

along the way, illustrate both

strongly, after highly positive

nationwide with Lotusan, Sto

the tremendous innovation

press coverage and his devel-

Corp.’s focus has began to

potential and the unique

opment of a first prototype to

shift in recent years. Not only

problems associated with

proof the concept.

does the company plan to

biomimicry inspired products.

14 | SYNAPSE.BIO

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Industry Overview EXTERIOR COATINGS MARKET

The paint and coating industry in the United States today is largely

mature and strongly correlated with Overall demand from 2014 to 2019

is expected to increase at an average annual rate of 3%.

16 | SYNAPSE.BIO

1

Sto Lotusan paint coating over stucco. Photo © Sto Corp.

the overall health of the economy.

In the U.S. market, Sto Corp.’s

the so-called Exterior Coating

core focus lies on Exterior

segment, which are products

Insulation Finishing Systems

aimed at keeping buildings

(EIFS) and on stucco, which

cleaner for a longer period of

together comprise 65% of the

time.2 Sto Corp. is expected

company’s total U.S. business.

to see substantial growth in

Coating currently constitutes

the North American market

only 17-18%, of which roughly

in this product category over

2 PRLog. (2010, June 11). The Exte-

40% in turn is due to its

the coming years, contrasted

rior Coating That Keeps Buildings

flagship biomimicry product

by relatively stagnant market

Cleaner, Longer.

Lotusan® based on the Lotus-

growth in its traditional core

Effect® (henceforth called

focus areas.

Lotusan). Lotusan belongs to

1 IHS. (2015, March). Paint and Coatings Industry Overview. Retrieved from the IHS website: https://www. ihs.com/products/paint-and-coatings-industry-chemical-economics-handbook.html

Retrieved from the PRLog website: http://www.prlog.org/10731454-stocoat-lotusan-the-exterior-coatingthat-keeps-buildings-cleaner-longer. html

SYNAPSE.BIO | 17


INDUSTRY OVERVIEW

MARKET POTENTIAL

For the period 2010-2015, the volume and the value construction market, to which

coating market is expected

coatings in the U.S. declined

the coating market is closely

to exhibit strong demand

from approximately 803 million

tied, is expected to recover

growth, following a period

gallons to 615 million gallons,

swiftly and strongly over the

of recovery from a severe

a decrease of 188 million

next few years. Thus, the

economic downturn. The

gallons or 23%.3 Recovering

coating market is likewise

economic recession after the

from this recession, the market

expected to exhibit strong

Global Financial Crisis of 2008

is expected to expand in both

growth rates in the years to

severely affected architectural

volume and value dimensions.

come.

coating demand in the United

With the economic distress

States. Between 2004 and

subsiding, the North American

of architectural coating and paint markets are forecast to grow at an annual rate of 2.9% and 6.1% respectively. This expected

$12,000

1100

$11,000

1000

$11,681

900 800

$8,674

million gallons of coating, valued at approximately $11.7 billion USD, by 2015.

$9,340 $9,800

$9,000

$10,500

$8,000

700

$7,000

600

growth corresponds with a projected demand of 744

$9,144

$10,000 VALUE

2010, demand for architectural

1200

(In Millions)

At present, the North American

VOLUME ( Gallons sold in Millions)

INDUSTRY OVERVIEW

644

649

668

688

2010

2011

2012

2013

744

712 2014

$6,000

2015

HISTORICAL VOLUME & VALUE OF US ARCHITECTURAL COATINGS INDUSTRY Source: ChemQuest Group, Inc. (2015). US Paint & Coating Industry Market Analysis 2010-2015.

900

Architectural paint prices are

MILLIONS OF GALLONS

850

predicted to grow at the rate of 800

3.1% annually, with a projected price of $15.70 USD per gallon

750

by 2015, up from $13.47 USD 700

per gallon in 2010.4 A generally recovering housing and real

650

$13.47

$14.09

$14.49

$14.89

$15.29

$15.70

estate market, and particularly 550

renewed home-building activity, are expected to further 1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

MARKET SIZE OF US ARCHITECTURAL COATINGS INDUSTRY Source: Department of Commerce, ACA 2013

18 | SYNAPSE.BIO

2012

2013

strengthen and reinforce demand for architectural coating products.

2010

2011

2012

2013

2014

2015

HISTORICAL PRICE OF ARCHITECTURAL COATINGS Source: ChemQuest Group, Inc. (2015). US Paint & Coating Industry Market Analysis 2010-2015.

SYNAPSE.BIO | 19


INDUSTRY OVERVIEW

INDUSTRY OVERVIEW

BUILDING WITH CONSCIENCE

COMPETITORS

Sustainable technologies can help reduce the

Sto is a member of the German Sustainable

One of Sto’s most important competitors in

scratch resistance. Rain-X is also hydrophobic,

energy and resource needs, as well as other

Building Council (DGNB) and has presented its

the coating market is the coating division of

surface-applied, and synthetic, typically used

environmental impacts, of the paint and coating

own environmental product declaration (EPD)

the BASF Group. Today BASF Wall Systems is

to cause water to bead on glass automobile

industry. In the context of increasing consumer

for mineral mortars. The EPD forms the basis of

a leader in the EIFS industry, providing EIFS,

surfaces.7 Rust-Oleum® NeverWet® is a two-step

awareness and environmental awareness, the

Sto’s vision for sustainable buildings. Sto seeks

stucco and other specialty fishes and coatings

product system designed to create a moisture

U.S. coating market will continue to be affected

to provide environmentally friendly products to

exhibiting hydrophobic properties, supplied

barrier on a variety of surfaces suitable for

by this trend towards greater sustainability. Sto

the market, such as StoTherm Lotusan NExT™

throughout North America under the Acrocrete,

use on metal, wood, aluminum and more.

Corp’s development is highly consistent with this

featuring Lotusan technology, which integrates

Finestone, Senergy, and SonoWall brands.

Although all these products also claim a (super)

principle and sustainability has been espoused

sustainability and durability to create a high-per-

There also exist a number of other substitutes or

hydrophobic effect similar to Lotusan’s, they

as one of the company’s key goals.

formance, energy-efficient wall cladding.

similarly targeted products competing with Sto’s

are not designed for broad wall architectural

Lotusan. HDP’s Water-Repellent Paint is one

application and therefore not directly competing

such product claiming to feature hydrophobic

with this particular application of the Lotus-Effect

properties. Scotchgard™ Protective Coatings is

Sto has developed.

“We def ine sustainability as the point at which the needs of social, environmental and economic factors intersect for a mutually benef icial outcome”.5

used as a base coating, which provides superior

5 Sto Corp. (2015). Sustainability. Retrieved from the Sto Corp

7 Rain-X Products. (2015). Products to help you outsmart the

website: http://www.stocorp.com/ sustainability

elements. Retrieved from the Rain-X website: https://rainx.com

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1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

Environmental regulations and international competition slow Sto US growth (1990’s)

STO CORP IS A GLOBAL COMPANY WITH OPERATIONS IN 70 COUNTRIES AROUND

_____

Prof. Wilhem Barthlott discovers lotus effect (1972)

_____

First study fully describing lotus effect published, authored by Prof. Barthlott and Nesta Ehlers (1977)

_____

Sto Corp US is formed and first US plant opens in Rutland, VT (1979)

_____

Self-cleaning property of lotus first described as “Lotus-Effect”; Prof. Barthlott receives research grant (1992)

ispo GmbH is acquired by Sto Corp. and gains rights to Lotusan (2001)

Prof. Barthlott starts patent process for LotusEffect (1994)

_____

_____

Period of rapid growth for Sto Corp (1980s)

_____

Second Sto Corp US plant opens in Atlanta, GA (1989)

_____

_____ Prof. Barthlott receives patent for Lotus-Effect; Article published in Lufthansa’s board journal describing Lotus-Effect and begins to generate wide interest (1995)

_____

Prof. Barthlott and Christoph Neinhuis receive Philip-Morris award; Prof. Barthlott collaborates with German paint company ispo GmbH who subsequently launches the first Lotusan product (1999)

Company Overview

_____

Sto Corp. launches StoCoat Lotusan® (2005) Prof. Barthlott sells LotusEffect patent to Sto Corp. (2009)

_____

Sto Corp. US sales reach €35M (2012)

_____

Sto develops “second generation Lotusan” product called Dryonic that is inspired by the hydrophilic/hydrophobic properties of the Namib desert beetle (2014)

_____

THE WORLD AND A TOTAL OF APPROXIMATELY 16,000 EMPLOYEES. ITS CORPORATE HEADQUARTERS ARE LOCATED IN GERMANY. IT IS PRIVATELY OWNED AND WAS FOUNDED BY THE STOTMEISTER FAMILY AFTER THE SECOND WORLD WAR TO SATISFY THE ENORMOUS DEMAND FOR CHEAP BUILDING MATERIAL TO BE USED IN THE RECONSTRUCTION OF EUROPE AFTER THE WAR.

Sto Corp was formed in the

formed to sell insulating wall

plant opened in Rutland, VT in

United States in 1979 as a

systems in the U.S. market.

1979. The location was chosen

wholly owned subsidiary of

It started out in New York

because it was centrally

Sto Germany, but its setup and

as a mere sales company,

located in proximity to the large

operations have been kept

but Sto quickly realized that

population centers of Canada

largely independent, following

they could import not only

and the Eastern United States.

a strategy of legally insulating

products but also ideas from

the parent company from its

Germany on a larger scale.

international subsidiaries.

After successfully marketing

Initially, the U.S. operation was

them in the U.S., Sto’s first U.S.

_____

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COMPANY OVERVIEW

COMPANY OVERVIEW

STO CORP U.S. The U.S. subsidiary was first

was built in Atlanta, GA in 1989.

rate today. Sto Corp currently

In the United States, Sto’s

This realization was spurred

innovation will be based on

named Sto Energy Conser-

The EIFS and stucco business

has roughly 250 employees in

core business lies in EIFS

Lowe’s hardware stores’

the Namib Beetle, which has

vation, aimed at satisfying

continued to grow rapidly,

the United States. Within Sto,

and stucco, which together

nation-wide Lotusan repainting

the ability to collect water from

American demand with the

despite competition from

the coating division makes

account 65% of total sales.

campaign, which seems to

the air, using a hydrophilic

goal of reducing high energy

both the brick industry and

up about 18% of total sales. In

Coating constitutes only 17-18%

have catalyzed a growing focus

mechanism to condensate

costs that followed many

the paint industry throughout

2012, Sto’s coating sales in the

at present, 40% of which is

on the coating segment.

water for a self-cleaning effect.

years of turbulent oil prices

the 1980s and early 1990s

Americas reached €35 million

accounted for by Lotusan

and supply developments.

somewhat slowing down this

EUR.9

Exterior Coating. Its commer-

At present, Sto estimates the

Sto’s coating division

According to Sto’s President

growth. In the late 1990s, other

cialization in the United States

size of the architectural and

is forecast to grow at a

of the Americas, Dave Boivin,

challenges such as environ-

started in the late 1990s,

decorative paint and coating

compound annual growth rate

at Sto’s 35th Anniversary

mental regulation and inter-

when Lotusan was brought in

market for its U.S. subsidiary

(CAGR) of 6-7% in the U.S. over

Celebration, “Sto products

national competition arose,

from Germany. As a result of

at roughly $11.6 billion USD

the next 5-6 years. Assuming

were highly regarded from

but Sto was able to weather

the corporate focus on EIFS

in wholesale sales through a

their envisaged gains in market

the beginning for their quality

these struggles and continued

www. coatingspromag.com/indus-

and stucco, the commercial-

select channel of distributors

share will be realized, this

and the excellence of German

to grow strongly by strength-

try-news/2014/04/sto-corp-cele-

ization of Lotusan in the US

who carry EIFS and stucco,

figure will eventually reach

product engineering.”8

ening its distribution network,

brates-35th-anniversary-in-the-us

has been relatively slow to

and about $16 billion USD

15% according to Sto Corp.

date, in contrast to Germany

across campus sales in retail.

For Lotusan a CAGR of 10-12%

where the product has been

One of the largest prospective

is expected, which is slightly

a huge success for years.

growth areas for Sto lies in the

lower than the projected

The realization within Sto

innovative biomimetic Lotusan

overall growth for the coating

8 CoatingsPro. (2014). Sto Corp. Celebrates 35th Anniversary in the U.S. Retrieved from the CoatingsPro website: http://

improving its market position, 9 McCulloch, L. (2012, July). Top

Sto’s business in the U.S. grew

and diversifying into new

rapidly. Soon, they discovered

product areas. Sto survived the

an even larger growing market

economic recession following

potential in the Southeast. The

the global Financial crisis and is

Corp of the sizeable growth

coating product, and there

division, due potential cannibal-

second manufacturing plant

growing at a healthy and stable

opportunities for the coating

seems to be further interest in

ization between Lotusan and its

division in general and Lotusan

looking to nature for new R&D

successor.

in particular in the U.S. is a

breakthroughs as the company

relatively recent development.

is working on a successor

25 Paint Manufacturers in Europe. European Coatings Review, 38-48.

product to Lotusan. This new

24 | SYNAPSE.BIO

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COMPANY OVERVIEW

THE LOTUS EFFECT The concept today widely known as the Lotus-Effect®, patented in the 1990s in Germany, is the result of highly water repellent (super-

TEXT PLACEHOLDER

LOTUSAN EXTERIOR COATING

hydrophobic) surface structures at nano-scales. It is the basis for Lotusan’s unique self-cleaning properties, mimicking the texture of a lotus leaf, which causes raindrops to form perfect spheres that run off the surface, capturing and taking dirt particles with them in the process. Photo: Rendering of water behavior on the surface of lotus leaves due to texture Wikimedia.org | William Thielicke

KEY FEATURES

Super hydrophobic Unprecedented water repellency

In 2005, Sto launched

thereby greatly reducing

StoCoat Lotusan® as a revolu-

maintenance costs and

tionary new coating with the

increasing its longevity.10

these patented self-cleaning

Long-lasting curb appeal Reduced maintenance costs

properties mimicking nature’s

Available in a variety of

Pronounced self-cleaning

genius as embodied in the

textures and colors, Sto Corp

properties that washes off of

lotus leaf. By applying this

expects that Lotusan’s market

dirt particles water alone

technology in the coating

share will grow rapidly over

market, Sto’s Lotusan creates

the next years, at an estimated

Highly resistant to mold,

self-cleaning and long lasting

annual growth rate of roughly

mildew, and algae

finishes for exterior building

6% at the lower end and 15%

walls. Just like on the lotus

at the upper end of the confi-

leaf, the textured finish is

dence interval.

rinsed clean with rainfall alone,

Permeable and allowing the substrate to breathe naturally, avoiding blisters caused by trapped water vapor UV resistant and excellent

10 Corp. StoTherm Lotusan NExT™: Energy Efficiency and Performance Built on Nature’s Best Ideas. Retrieved on

color retention

May 21, 2015 from: http://www.buildsite.com/pdf/stocorp/

Water-based, meaning it is

StoTherm-Lotusan-NExT-Product-Data-B26364.pdf

safe and easy to use with clean up in water Low VOC (volatile organic compound) content, safe for workers and the environment

26 | SYNAPSE.BIO

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COMPANY OVERVIEW

PRODUCTION AND R&D

COMPANY OVERVIEW

1

2

3

4

STOTHERM CI

STOGUARD

STOPOWERWALL

STOCOAT® LOTUSAN®

Sto Corp has developed

StoTherm ci, Sto’s Exterior

StoGuard is a breathable

StoPowerwall is Sto’s stucco

StoCoat® Lotusan® with Lotus-effect® technology is Sto Coatings’

and continues to grow four

Insulation and Finish Systems

house wrap that can be applied

product designed for light

specialty architectural coating product, and is the centerpiece one

core product lines:

(EIFS) product, provides the

through spray guns or paint

commercial and residential

of the company’s largest expected future growth areas. Despite its

construction industry with

rollers onto a building’s wall

construction. Sto has a large

already explained tremendous advantages, one of Lotusan’s main

freedom of design through

structure. Its primary function

range of products under and

disadvantages is that its microscopic surface structure makes it

a protective blanket of

is to provide a moisture

on top of its stucco product,

vulnerable to impacts. This lack of impact resistance is one of the

continuous insulation, which

and air barrier for the wall

which are expected to remain a

main driving forces behind Sto’s efforts to develop a successor

is required by new building

structure, while simultaneously

large key market over the next

product based on the Namib beetle, which is being designed with

hensive line of air

codes. The focus of the

allowing trapped water vapor

five to six years.12

a tighter film structure and improved impact properties.

and moisture barrier

product is not the building’s

to escape and bonding with

products and an

outer appearance, but to

the substrate to enhance the

With this integrated product mix, Sto has adopted a new strategic

important component

make sure it is well insulated

structural integrity of the wall.

focus on the restoration of existing buildings. “One-third of our

of StoTherm ci

in a cost-effective and lasting

It is an important component of

sales come from restoration,” said Sto’s President of the Americas,

way. Over the years Sto has

StoTherm ci systems.

Dave Boivin. “We’ll become a force in the restoration arena. We

1 StoTherm ci, namely Sto’s EIFS product

2 StoGuard, a compre-

3 StoPowerwall, Sto’s

built tremendous expertise in

have an array of products to help in restoring buildings and we will

stucco product

capitalizing on new building

grow our line substantially over the next five to six years.”

codes and updating its

4 StoCoat® Lotusan® with Lotus-Effect®

products to meet new building

Sto Corp’s products, virtually all of which are for exterior appli-

requirements.

cation, are sold primarily in the U.S., but also exported to Canada

technology, Sto

and a few other countries. Nevertheless, all Lotusan output desig-

Coatings’ biomimetic

nated for the U.S. market is currently manufactured within the U.S.

flagship product

Sto’s R&D department is now also working on a next generation

11

11 CoatingsPro. (2014). Sto Corp. Celebrates 35th Anniversary in the U.S.

28 | SYNAPSE.BIO

12 ibid.

Lotusan product and on the qualification of raw materials for a crossover from a German formula for a functional interior coating.

SYNAPSE.BIO | 29


THE DISCOVERY OF THE LOTUS EFFECT German botanist Prof. Wilhelm

levels of cleanliness. Because

would certainly already know

Barthlott, today one of the

the botanical garden of the

about such anti-adhesive

world’s leading experts in the

University of Heidelberg did

surface properties. Therefore,

field of bionics and a pioneer in

not possess any lotus flowers

the potential of what today is

PROF. WILHEM BARTHLOTT PICTURED WITH

analyzing biological surfaces,

at the time, it was not until

widely known as the Lotus-

SAMPLE SURFACE COATED WITH LOTUSAN

first observed the self-cleaning

much later that Prof. Barthlott

Effect was not realized at the

properties of certain hierar-

discovered that self-cleaning,

time of its discovery. Not even

chically structured botanical

super-hydrophobic surface

among the scientific community

surfaces during his research at

structures were optimized in

was Prof. Barthlott’s break-

the University of Heidelberg,

the Lotus leaves.

through acknowledged: his

Commercialization

Germany, in the 1970s. For his

initial publication was virtually

dissertation he systematically

In 1977, Wilhelm Barthlott and

ignored for more than a

studied the surface properties

his colleague Nesta Ehlers

decade before interest finally

of different plants using

published the first study fully

began to form in the 1990s.

scanning electron microscopes

describing the functionality

begins more than 40 years ago. From its initial discovery by German

(SEM), which had first become

and properties of self-cleaning,

botanist Prof. Wilhelm Barthlott in the 1970s, it took nearly 20 years until

commercially available in 1971.

super-hydrophobic plant

Examining the differences

surfaces.13 His own conviction at

his first attempts at commercializing the idea resulted in a fruitful industry

between different plants exhib-

the time was that his discovery

cooperation with Sto, leading to a global rollout, including in the U.S.

iting clean or dirty surfaces,

would be mainly relevant to the

market, of its first commercial application Lotusan in the late 1990s.

he discovered a connection

botanical research community

between their super-hydro-

in the natural sciences, and

der Literatur. Wiesbaden, Germany:

phobic surface properties and

that the industrial community

Franz Steiner Verlag.

Process & Strategy

The remarkable success story of the Lotus-Effects commercialization

30 | SYNAPSE.BIO

13 Barthlott, W., & Ehler, N. (1977). Raster-Elektronenmikroskopie der Epidermis-Oberflächen von Spermatophyten. Mainz, Germany: Akademie der Wissenschaften und

SYNAPSE.BIO | 31


COMMERCIALIZATION PROCESS & STRATEGY

COMMERCIALIZATION PROCESS & STRATEGY

FROM DISBELIEF TO BREAKTHROUGH

A vivid anecdote illustrating his struggles at the time tells the story of him at some point literally carrying Lotus leaves in a plastic bag to an unnamed research institute in order to demonstrate the Lotus-Effect,

The story of Professor Barth-

of Education and Research

In the subsequent years,

only to still be met with sheer

lott’s discovery vividly illus-

BMBF—Bundesministerium für

Wilhelm Barthlott visited

disbelief and accusations of

trates that a major innovative

Bildung und Forschung), which

numerous potential industry

fraud, because his discovery

breakthrough, especially in the

after a live demonstration

partners in the hope of

so completely contradicted

field of biomimicry, is initially

granted 450,000 DM (roughly

commercializing his Lotus-

the accepted scientific wisdom

often met with severe disbelief

$168,000 in current USD) in

Effect (first described as such

at the time. Concepts like

and suspicion, in his case both

research funding. The grant

in his 1992 publication Die

nano-technology and micro-

in the scientific and industrial

was classified as foundational

Selbstreinigung pflanzlicher

scopic surface properties were

community. Eventually, in the

research because no biomi-

Oberflächen in the Climate and

still largely unknown at the time

early 1990s, he tried to submit

metic prototype existed at

Environmental Report of the

and the techniques to examine

a research proposal to the DFG

the time. Since fields such as

University of Bonn14), but was

them had just become widely

(Deutsche Forschungsgemein-

nanotechnology or biomimicry

met with the same disbelief or

available a few years earlier,

schaft—German Research

were as yet unheard of in the

plain amusement over and over

through the introduction of

Association) but was declined

early 1990s, Prof. Barthlott

again. One company in the

because his idea contra-

was asked to also look into

adhesive industry reportedly

dicted the generally accepted

forest trees such as oaks and

claimed that if such a thing as

knowledge at the time. Yet he

spruces so that the grant could

the Lotus-Effect were techni-

spherical water droplet on a super-hydrophobic leaf. (e) An SEM micro-

was referred to the German

be classified as forest dieback

cally possible, they would know

graph of a droplet illustrating the low wettability of super-hydro-phobic

Federal Ministry of Research

research.

it. At the time, the chemical

microstructured surfaces. (f)-(h) The SEM micrographs show the Lotus

(today the Federal Ministry

SEMs.

Super-hydrophobic and self-cleaning surfaces (a) A flowering plant of Lotus (Nelumbo nucifera). (b) A Lotus leaf contaminated with clay and (c) removal of the adhering particles by water. (d) A

industry exhibited neither

leaf surface in different magnifications: (f) shows randomly distributed cell papilla, (g) shows a detail of the cell papilla and in (h) the epicuticular wax tubules on the cells are shown.

14 Barthlott, W. (1992). Die Selbstreinigungsfähigkeit pflanzlicher Oberflächen durch Epicuticularwachse. Rheinische Friedrich-Wilhelms-Universität Bonn (Ed.). Klima- und Umweltforschung an der Universität Bonn, 117-120.

32 | SYNAPSE.BIO

SYNAPSE.BIO | 33


COMMERCIALIZATION PROCESS & STRATEGY

COMMERCIALIZATION PROCESS & STRATEGY

THE BEGINNING OF STO In 1997, the year of the founda-

façade specialist ISPO, then

Although the marketing of

tional publication Purity

part of the renowned German

Lotusan in the U.S. initially

of the Sacred Lotus16, the

Dückerhoff group, a key

progressed much slower

German Karl Heinz Beckurts

player in the cement industry,

than in Germany, where it

Foundation bestowed the

developed the first coating

was already an established

prestigious Beckurts-award to

prototypes based on Prof.

brand name, Sto successfully

Prof. Barthlott for his accom-

Barthlott’s Lotus-Effect after

developed and improved

plishments. In 1999, he and his

only one year of collaboration

the product further. It in fact

co-author and most important

and development. Lotusan was

became so successful that

scientific partner between

brought to market in 1999, but

a host of copycat products,

1992 and 1999, Christoph

not without significant initial

claiming for the most part only

Neinhuis, together received

internal resistance within ISPO

dubious similar super-hydro-

the Philip-Morris award. Yet the

and against lawsuits from large

phobic properties, began to

initial dialogues with potential

competitors, claiming that the

emerge. A never-ending string

industry partners were still

product’s unheard of properties

of complex and protracted

difficult. The primary target

were fraudulent. In 2001, ISPO

legal battles and patent

groups were the automotive

was acquired by Sto, together

lawsuits eventually lead Prof.

and façade industries. While

with all the trademarks and

Barthlott to sell all remaining

talks with large key players

rights related to Lotusan, while

patents he held, including the

15 Barthlott, W. (2011). Der Geometri-

in the former proved to be

Prof. Barthlott continued to

Lotus-Effect itself, to Sto in

sierte Lotus – vierzig Jahre bota-

difficult, in the latter the quest

hold the patent for the under-

2009.

nische Forschung zur Biodiversität

for a willing partner did not

lying Lotus-Effect.

und Bionik. Lecture held at the

last long. The medium sized

The Lotus-Effect: Water collects debris as it rolls over the textured surface

interest nor acceptance of

of sheer frustration he himself

appearing in Lufthansa’s board

nano-surface based anti-ad-

filed a patent for his super-hy-

journal around 1995 was pivotal

hesive technologies, but rather

drophobic self-cleaning

in disseminating the innovative

relied on chemically based

surfaces in 1994, trademarking

biomimetic discovery to a

fluorinated polymers in their

the Lotus-Effect in 1995. He

broad audience.

processes. Both the industry

subsequently began to work on

and the scientific community

an initial prototype in his own

From that point on, Prof. Barth-

continued to disregard and

laboratory—a honey dipper that

lott’s “phone would not stop

doubt the viability and credi-

would allow honey to run off

ringing” as he recalls, and

bility of Prof. Barthlott’s break-

it without leaving behind any

eventually a consortium of

through. His now pivotal

residue.

roughly 10 different companies

scientific article Purity of the

The eventual breakthrough

was formed, united by an

Sacred Lotus was declined

for Prof. Barthlott and the

interest in commercializing the

by 5 different reviewers15 and

Lotus-Effect® came from an

Lotus-Effect.

his publication proposals to

unexpected direction. It was

renowned magazines such

neither publication in a major

as Nature and Science were

scientific magazine nor cooper-

continuously rejected, not to

ation with a prestigious indus-

be published until 1997. Out

trial firm: instead, an article

University of Bonn: July 1, 2011.

16 https://link.springer.com/article/10.1007/s004250050096

34 | SYNAPSE.BIO

SYNAPSE.BIO | 35


COMMERCIALIZATION PROCESS & STRATEGY

COMMERCIALIZATION PROCESS & STRATEGY

GO-TO-MARKET STRATEGY IN THE U.S. The commercialization of

Traditionally Sto’s coating

actively expanded in the hope

constitute as much as 50% of

focused on the coating space,

primarily on their price-value

Lotusan in the United States

division has been highly reliant

of providing a new driving force

the overall $11.6 billion USD

the lack of resources in terms

ratio and readily compare even

began in the late 1990s, when

on the developments in the

for innovation and growth.

coating market.

of sales force and the limita-

premium products like Lotusan

the product was brought in

EIFS and stucco segments and

tions associated with finding

with other “regular” paints,

from Germany. Adoption of the

constituted a mere add-on to

Of the overall $11.6 billion

One of Sto’s obvious key

distribution partners makes

measuring their value by the

product in the U.S. has been

those core areas. Gradually

coating market in the U.S.,

assets in pushing new

such a strategy more efficient.

same standards. The same

relatively slow to date, as a

however, Sto’s current mature

the potential market size for

innovative products such as

Leveraging already existing

problem also applies to brick &

result of a larger corporate

market positioning in these

Lotusan—the exterior and archi-

Lotusan to market, are its

relationships through core

mortar stores, which makes it

focus within Sto on its core

core businesses, even with

tectural flat coating market—is

existing strong relationships

business connections and core

tough for Sto to compete with

markets in EIFS and stucco.

its existing strong distributor

estimated at around $2 billion

with customers and distributors

product brand recognition

larger players in their market.

Only in the past few years

network, is increasingly seen as

USD. After years of a relatively

through its core business and

can also play a vital role in

Sto’s strategy therefore lies in

has there has been a shift in

insufficient for the company’s

inconspicuous niche-exis-

its brand recognition. However,

overcoming these constraints.

targeting potential synergies

focus with the realization of

goals of continuing to provide

tence in the U.S., the company

the company also seeks to

the opportunities that Lotusan

sustained strong growth. With

now seeks to enter the mass

expand further and diversify

A key pillar of Sto’s growth

unique properties and selling

could bring the company.

only about 6-8% annual overall

market by targeting commercial

into new market spaces, such

strategy for the coating

proposition are envisaged to

Spurred by a repainting project

market growth, these sectors

and residential contractors,

as hospitality for example.

business is a focus on brick

allow brick & mortar stores

of all Lowe’s stores nationwide

are relatively stagnant overall

property owners, and brick

Large commercial structures

& mortar stores such as

to differentiate themselves,

with Lotusan, a new focus on

and exhibit limited potential for

and mortar stores, trying to

and high-rise markets will also

Sherwin-Williams. The fact that

while they can provide Sto with

the coating market began to

great innovations. Therefore,

also reach the as-yet untapped

constitute an important area

the paint market is essentially

access to the as-yet untapped

emerge.

over the past 2 years the

potential of DIY customers.

for Sto’s coating division. As

a “commodity” market means

potential of the DIY market.

coatings division has been

These are estimated to

only 5 employees are currently

that customers assess products

Furthermore, stores like

36 | SYNAPSE.BIO

between them—Lotusan’s

SYNAPSE.BIO | 37


COMMERCIALIZATION PROCESS & STRATEGY

Financial Strategy

Dunn-Edwards or Kelly Moore

Another important tactic

force will allow it to efficiently

have their own strong relation-

employed by Sto’s coating

target other Lowe’s-sized chain

ships with regional contractors

division has been the effort to

stores currently undergoing

and by offering them a way to

form a strategic partnership

expansion. By freeing up an

differentiate themselves, Sto

with Lowe’s, by having every

active strategic accounts team

FUNDING OF PROF.

can form beneficial strategic

one of its stores throughout

to not only focus on these large

BARTHLOTT’S

partnerships that allow it to

the country painted with

chain companies, but also and

BREAKTHROUGH

reach those smaller customers.

Lotusan. Sto hopes that its

especially on the mid-range

This strategy can help Sto to

overall strategy of leveraging

commercial building sector, it

cut down on sales expenses

its existing brand recognition

hopes to grow its market share

and expand its sales presence

and relationships instead of

strongly and efficiently.

at the same time.

investing into a large new sales

38 | SYNAPSE.BIO

In 1972, Prof. Barthlott

benefit from crucial resources

trademarks need to be regis-

discovered the Lotus-Effect and

provided by the University of

tered, especially international.

found himself in a position not

Heidelberg and later Bonn,

well suited to developing and

first and foremost SEMs.

In 1992, Prof. Barthlott was

financing possible usage appli-

Furthermore, in this initial

able to secure a substantial

cations. In the industrial and

phase his operational costs

grant from the German

scientific communities at the

were likely relatively low, as

Federal Ministry of Research

time, nano-technology was still

Prof. Barthlott already had his

and Technology. The granted

unheard of and Prof. Barthlott’s

own laboratory set-up at home

amount of 450,000 DM

discovery in particular directly

and costs for his research

(roughly €148,000 EUR /

contradicted everything the

facility, such as electricity, heat,

$168,000 USD in current

chemical industry knew at the

or water, most likely did not

values) likely enabled him

time. Therefore he had to do

exceed €4,000 EUR ($4,560

not only to pursue further

most of the necessary founda-

USD) per year. Significantly

research, but also to develop

tional research and devel-

higher costs are usually only

further usage applications

opment by himself and in his

generated when employees

and to build a first prototype,

own laboratory, although he did

are needed and/or patents and

the honey dipper. It is not

SYNAPSE.BIO | 39


FINANCIAL STRATEGY

COST ESTIMATIONS FOR THE PRE-COMMERCIALIZATION PHASE

clear however, whether the

Today the costs for trade-

The R&D costs for this time are

terms of the research grant

marks range between €500

estimated between €400,000

may have partially prohibited

EUR ($570 USD) at national

EUR ($456,000 USD) and

him from using the funds to

level and €4,000 EUR ($4,560

€600,000 EUR ($684,000

pursue commercial applica-

USD) on an international

USD), covering employee

tions. Two years later, in 1994,

level. Adjusting for inflation

wages, costs for patent appli-

Research grant

the patent application process

this amounts to roughly €675

cations, and general laboratory

(inflation

for self-cleaning biomimetic

($770) and €5,390 ($6,150)

costs. The estimate varies

adjusted)

surfaces had been started and

current EUR/USD, which could

because employees are usually

two basic patents were granted

have been covered by a private

the largest cost driver and their

2 basic patents

in Europe, the United States,

entrepreneur at that time.

numbers for this specific period

(estimated

and other countries. Today the

After completing his honey

and project are unknown.

range)

costs for international patents

dipper prototype and attracting

Costs for laboratory equipment

range from €30,000 EUR

significant positive press

and chemicals on the other

($34,000 USD) to €50,000

coverage that provided Prof.

hand should have played a

EUR ($57,000 USD), which

Barthlott with long overdue

smaller role, since Dyckerhoff

would have been €41,500 EUR

public attention, he was able

was already an active player in

($47,000 USD) and €69,000

to establish cooperation with

the coating sector and would

EUR ($78,000 USD) at the

industry players in 1999. ISPO

most likely already have had

time.17

and Dyckerhoff group, an

the relevant research facilities

important player in the German

at their disposal.

In 1995, Wilhelm Barthlott was

cement and face industry,

very likely able to cover the

developed the first coating

costs for a first trademark of the

prototype over a time frame of

Lotus-Effect out-of-pocket.

one year.

17 Numbers are inflation adjusted and based on the author’s’ estimations, actual costs may be different depending on the exchange rates and other factors applied.

40 | SYNAPSE.BIO

DESCRIPTION

Lotus-Effect Trademark (domestic/int’l)

COSTS

SOURCE

YEAR

German Federal €148,000 EUR

Ministry of

(168,000 USD)

Research and

1992

Development

€41,500–€69,000 EUR

€675/€4,000 EUR ($770/$4,560 USD)

R&D costs for

€400,000–€600,000 EUR

Lotusan

($456,000–$684,000 USD)

Lotusan patent

AMOUNT GRANTED

€40,000–€63,000 EUR ($46,000–$72,000 USD)

Unknown

1994

Wilhelm Barthlott, Walter R. Erdelen,

1995

M. Daud Rafiqpoor Dyckerhoff/ISPO

1999

Dyckerhoff/ISPO

1999


FINANCIAL STRATEGY

(In Millions)

inspiration for Sto’s innovative

USD, together accounting for

of all rights and patents

drive and R&D.

71% of the whole market. Sto’s

connected to Lotusan, and

estimated 2014 sales revenue

$25,000

1,330

$23,000

1,210

$21,000

1000

$19,000

970

$17,000

since 2009 also of the under-

In 2010, the U.S. paint and

in the U.S. would likely place

lying Lotus-Effect itself. While

coating market was worth $18.2

it the group of the next ten

Lotusan was already brought

billion USD or 21% of the global

companies, ranging from $100

into the U.S. in the late 1990s,

coating market.18 The overall

million to $700 million USD in

TEN-YEAR DEVELOPMENT OF THE US PAINT AND COATING MARKET

a significant focus was placed

U.S. market is divided into

annual sales.19 Since Sto gives

This figure shows that the general U.S. paint and coating market development has been positive since

on the product by Sto Corp

three major segments: archi-

only a combined figure for its

2009 in both value and volume. After a prolonged growth period peaking around 2005/2006, the market

only very recently. In their

tectural, original equipment

Asian and American markets

marketing strategy, the genius

manufacturer (OEM), and

in the annual report, the exact

of nature and the fascinating

special purpose coatings.

number for only the U.S. market

story of the lotus flower play

Each segment includes several

is difficult to estimate. However,

only a minor role. It is primarily

sub-markets—Sto’s key market

with around €142 million EUR

the self-cleaning property of

of architectural coatings for

in Asia and America together,

the product, along with the

example is comprised by

Sto clearly belongs to one of

associated high performance

professional painters and the

the smaller companies within

and longevity, that acts as the

Do-It-Yourself (DIY) market.

this second-tier group of

most crucial selling point for

The 10 biggest companies

companies in the U.S., which

potential customers. Nature

in the U.S. market exhibited

constituted a combined 11% of

and the field of biomimicry

sales revenues ranging from

the 2010 U.S. paint and coating

have become a major source of

$700 million USD to $3 billion

market.20

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

took a severe hit during the deflation of the U.S. housing bubble after 2006/2007, but has rebounded since mid-2009. Source: ChemQuest Group, Inc. (2015). US Paint & Coating Industry Market Analysis 2010-2015

A comparison of the three

Over the same time frame, the

and 2009, which amounts to a

different market segments

smaller OEM market suffered

decrease of $747 million USD.

shows that the architectural

the highest losses of $1,609

All three markets are now in

market remained relatively

million USD, which amounts

the process of recovering,

robust in value terms during

to as much as 26% of its total

although by 2010 all three had

the global financial crisis.

value. The special purpose

yet to recover to their pre-crisis

From 2006 to 2009 losses

value market, which is the

levels.

amounted to 7% of the market

smallest of the three, lost 17%

value or $647 million USD.

in market value between 2007

18 ChemQuest Group. (2015). US Paint & Coating Industry Market Analysis 2010-2015. 19 ibid. 20 Sto SE & Co. KGaA. (2014). Sto SE & Co. KGaA: Geschäftsbericht 2014. Stühlingen: Sto SE & Co. KGaA.

42 | SYNAPSE.BIO

SYNAPSE.BIO | 43

VALUE

Today Sto is the sole proprietor

1,450

(In Millions)

STO’S MARKET DATA

GALLONS SOLD

FINANCIAL STRATEGY


FINANCIAL STRATEGY

FINANCIAL STRATEGY

$9,000

$8,000

STRATEGY, CAPABILITIES, & OUTLOOK

(In Millions)

GALLONS SOLD

$7,000

From 2013 to 2014, Sto grew

research facilities are located in

than Lotusan. Sto expects

its combined American and

Germany.

Dryonic to replace Lotusan in

Asian sales revenues by 7.6%,

the long-term and to exhibit

$6,000

$5,000

$4,000

$3,000

from roughly €132 million to

Sto Germany is currently

even higher growth potential

almost €143 million EUR, and

developing a “second gener-

than its predecessor. Given

it increased its net assets from

ation Lotusan” product, which

the apparent ease with which

HISTORICAL VALUE OF THE THREE MAJOR COATINGS SEGMENTS

about €95 million to just shy

is based on the hydrophilic

Sto has been able to internally

of €105 million EUR over the

and hydrophobic character-

finance the development and

Source: ChemQuest Group, Inc. (2015). US Paint & Coating Industry Market Analysis 2010-2015.

same time period. It is evident

istics of the Namib beetle. A

rollout of Lotusan, this new

that the company is in a very

patent application is currently

product, if as successful as

negative in volume terms at

niche products and unique

growing at a rate of 5.5% a

healthy and strong financial

pending. In 2014, a fast drying

expected, is expected to be

-0.4% and slightly positive in

technologies can indeed be

year, the estimated current

situation, enabling it to fund

paint inspired by this very

commercialized with even

value terms at 2.4%. Although

very successful in this highly

market growth for the coating

all R&D, patent, and expansion

effect has been developed: it

greater financial freedom. Due

these low growth rates are

competitive market.

department lies somewhere

costs from its own resources.

is called StoColor Dryonic.

to new, advanced distribution

partly attributable to the

Sto Corp reinvests roughly 2%

The paint is designed to collect

possibilities, Sto expects a

financial crisis, even prior to the

Sto has been growing strongly

With new major initiatives being

of its U.S. sales revenue into

condensed water and clean

compounded annual growth

crisis the market overall grew

over the past few years, even

played out and entering the

its own R&D department. The

itself through this hydrophilic

rate in super-hydrophobic

at rates comparable to Sto’s

without the new technology

mix, Sto Corp’s coating division

main purpose of its laboratories

feature. Dryonic, or a more

coating between 10% and 12%.

current targets only in 2002

just introduced. About half

hopes to reach growth rates

however is to merely adjust

advanced version of it, could

By contrast, between 2000 and

and 2003 (at 11%). Therefore,

of the revenue is generated

as high as 15% by expanding

the German original to the

be the next big biomimetic hit

2010 the compounded annual

if Sto manages to reach its

in Germany, the other half in

and improving its distribution

American market and local raw

in Sto’s repertoire and become

growth rate of the architec-

ambitious goal it would show

the rest of the world. While

network.

materials, while all the major

just as or even more successful

tural coating market has been

that small companies with

the U.S. market overall is

21

22

21 Sto SE & Co. KGaA. (2014). Sto SE & Co. KGaA: Geschäftsbericht 2014. Stühlingen: Sto SE & Co. KGaA.

2001

2002

2003

2004

2005

2006

2007

23

2008

2009

2010

between 6% and 7% annually.

23 ibid.

22 ibid.

44 | SYNAPSE.BIO

SYNAPSE.BIO | 45


FINANCIAL STRATEGY

TEXT PLACEHOLDER

STO MARKET DEVELOPMENT In order to continue to develop

increase customer awareness

Lotusan successor StoColor

the highly important paint store

without having to bear huge

Dryonic. Since R&D costs, as

distribution channel, in which

expenses for marketing costs.

has been mentioned before,

mere availability of the product

With its local distribution

are mostly driven by the size

constitutes the most important

strategy in cooperation with

of the research team, the

purchase decision driver, Sto

brick & mortar stores, Sto Corp

estimated costs of such a

Corp is focusing on two major

is further able to increase

project, assuming a five-person

strategies to win in this highly

its products’ availability

research team comprised of

competitive market and tap

and directly reach its local

highly trained and qualified

its growth potential: brand

customers.

people, would amount to

building (and exploitation)

roughly $600,000 to $700,000

and relationship building with

Sto’s annual report shows that

USD per year. Laboratory and

contractors. Brand loyalty

the company has Sto’s annual

patent costs should play a

among the major regional

report shows that the company

comparatively minor role for

brands is very strong and

has traditionally invested vast

a company of Sto’s size and

continues to be a major factor

sums in new technologies

capabilities.

in the success of a product.24

and facilities. The invest-

Strategic partnerships, such as

ments have been increasing,

the ongoing one with Lowe’s

almost doubling from €20.3

or an envisaged one with

million EUR in 2009 to €39.1

Marriot International, provide

million EUR in 2014. One of

substantive opportunities to

the larger new projects is the

46 | SYNAPSE.BIO

TURNOVER (IN MIO EUR)

2009

2010

2011

2012

2013

2014

TOTAL

924.6

986

1106.8

1141.7

1166

1208.7

GERMANY

450.6

489.2

529.4

524.7

534.7

549.2

ABROAD

474

496.8

577.4

617

631.3

659.5

20.3

18.2

27.6

36.3

32.4

39.1

INVESTMENT (without financial assets)

24 ChemQuest Group. (2015): US Paint & Coating Industry Market Analysis 2010-2015.

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Conclusion

Professor Barthlott’s initial severe and prolonged difficulties in commercializing his discovery of the Lotus-Effect vividly illustrate the struggles of the pioneer that are often faced by biomimetic innovators. In the absence of acceptance from either the scientific or industrial community, his securing of a government research grant seems to have been crucial in further advancing his discovery to the stage of a viable proof of concept through a first prototype. Positive and extensive media coverage was a key factor in making the Lotus-Effect widely known to a broad audience – many of which were potential investors and future business partners. While major corporations across various industries at the time were initially difficult to work with, it was the small to medium sized company ISPO that originally developed the first iteration of Lotusan before it was acquired by Sto. Ever since, Sto has very successfully developed, and especially in Germany the company marketed a number of Lotusan-related products, such as StoCoat Lotusan Exterior Coating for example. These products, together with an increasing corporate focus on biomimicry that is evident from the development of the Lotusan successor product Dryonic, based on the Namib beetle, will help Sto to grow continuously and sustainably. For years Sto Corp’s focus in the U.S. market was primarily concentrated on its EIFS and stucco segments. By accelerating Lotusan’s rollout in the U.S. however, the company seems to have responded to stagnating growth in its traditional core-focus areas, which furthermore have suffered most from the economic recession following the global financial crisis. By increasingly building strength and capacity in sustainable and innovative biomimicry-inspired products, the company is therefore on a good track to live up to its ambitious growth targets in the U.S. and worldwide, while doing so in a sustainable and responsible manner, in keeping with its strategic vision.

Lessons Learned

RESEARCH GRANTS CAN HELP GET THE BALL ROLLING FOR SMALL COMPANIES AND ENTREPRENEURS

In order to fund such risky projects, in the absence of promotion or even acceptance from industry or academia, government support in form of research and startup grants will be of prime importance. Although small- to medium-sized companies often are the most innovative when trying out and adopting radical new approaches such as the commercialization of biomimetic innovations, large corporations with their sizable resources can impressively implement and perfect these concepts, once their potential has been realized. MEDIA COVERAGE AND FUNCTIONAL PROTOTYPES CATALYZE UPTAKE

The media can play a crucial role in disseminating the potential promise of biomimetic innovations, mainly by simply reaching a large number of potential investors and making the discovery better known to the broader public. For the initial proof of concept of biomimetic ideas, the ability to practically demonstrate its viability through a working prototype and ideally a live demonstration seems to be vital. SOLUTION ACCEPTANCE CAN BE DIFFICULT AT LEADING EDGE OF INNOVATION

Biomimetic breakthrough innovations sometimes differ so radically from the accepted conventional wisdom of their time, that it can take tremendous time and effort to convince potential investors of their viability. Surprisingly, not only the industrial but even the scientific community can be extremely unaccepting of new biomimetic concepts, if the innovation introduced is large and radical enough.

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