Home > Nanotechnology Columns > Alan Shalleck-NanoClarity > "2010 Outlook - 2009 Recap"
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Alan Shalleck President NanoClarity LLC |
Abstract:
2009 was not a great year for Nanotechnology. Maybe 2010 will be better. Let's explore the 2009 highlights. (Tim Harper of Cientifica published a December white paper on this subject that I urge you to read. Tim and I have similar views. My recommended strategies are somewhat different. ) One major change occurred in 2009 - "Green" completely replaced "Nanotech" as the hot "next big technology" arena - despite all agreeing that the road to green runs through the nanotech space.
January 5th, 2010
"2010 Outlook - 2009 Recap"
"2010 Outlook - 2009 Recap"
By
Alan Shalleck
NanoClarity LLC
January 2010
2009 was not a great year for Nanotechnology. Maybe 2010 will be better. Let's explore the 2009 highlights. (Tim Harper of Cientifica published a December white paper on this subject that I urge you to read. Tim and I have similar views. My recommended strategies are somewhat different. ) One major change occurred in 2009 - "Green" completely replaced "Nanotech" as the hot "next big technology" arena - despite all agreeing that the road to green runs through the nanotech space.
Nanotechnology commercialization, or what disperately passes for a nanotechnology industry, lost momentum in 2009. There were no major nanotech "blockbuster" product breakthroughs nor across the board economic triumphs. Only one significant IPO - A123 Systems - occurred. Environmental and health scare pressures, loudly and inaccurately voiced, put the fear of regulation on every nanotech funding source's radar further slowing down an almost dead financing market. Established nanocompanies with good technology were almost destroyed by third party IP suits (ironically with little or no revenue to share) or shut down because they just ran out of money and couldn't raise more. Finally, little progress was made in the key challenge in nanotech… scaling up production to macro sized usability consistently in volume without difficult or major losses. In short, nanoscience worldwide continued reasonable funded and reasonably successfully; commercial nanotechnology was hard pressed to show significant progress toward large production and profitability and was dollar short the entire year.
During 2009, potential nanotech markets turned soft. Not only was the general economy dangerously depressed and unemployment growing each month, but all levels of markets for new technologies like nanotech - especially new applications of newer technologies - dried up. Businesses hunkered down, concentrating their reduced resources on core businesses, trying to survive the economic mess. Nanotechnology treaded water, barely staying afloat and barely visible within the green fog hype Then there was the nanotech hype.
Ridiculous reports were issued showing $30 plus billion of domestic nanotechnology sales touting the outstanding growth of nanotech product sales … terribly deceiving numbers. Removing semiconductors markets where natural "Mooore's Law" evolution has led semiconductor designs into nanotechnology sized elements, leaves insignificant growth in "all else" nanotech product sales during 2009. Most of the products in those cited billions of market dollars estimates used miniscule amounts of nanotechnology sized materials and under most original definitions, couldn't be classified as "nanotechnology" products. Such products are established " nanotechnology enhanced" products, not nanotech products. Clearly, these billions of sales were not new because of Nanotech and shouldn't be counted as nanotechnology product sales. I won't venture to estimate the size of the 2009 "nanotechnology market presence" but if it was 15 % of the quoted study markets, I would deem that a generous estimate. (excluding unknown black military sales where nano coating sales alone are in the millions)
Clearly, there was no "blockbuster" product design that could capture the imagination of the customers. Financially, as in most other industries, losses and negative cash flow permeated the Nanotech. There was progress in three specific marketplaces and these bode well for further progress in 2010. The healthcare, pharmaceutical and diagnostic markets were ripe with product possibilities and entres. The trends toward personalized medicine and the new health care legislation will further enhance nanotechnologies core functions in these market. The second market is energy. Progress in nanotechnology based solar energy technologies was dramatic, driving cost per watt install down near the magic cost of a $1/watt. Last there were water purification markets. Other promising areas with near term product possibilities are sensors and coatings. It is difficult however to construct profitable business models for these promising areas.
Last, a 2010 observation from 2009 on how a nanotechnology company can forge a path to profitability. First, no company involved solely in nanomaterials will ever be sustainably profitable. These products become commodities and remain the long term province of large well estabilished already profitable companies. Rule 1 is that a smaller nanotechnology company has to have products that reach up the value chain to capture some of the upstream profitability. Rule 2 is that no nanotech company with a single product or product line will gain stable profitability. To win, small companies have to combine with at least two other product lines and groupings to obtain volume potential and market diversity. Look at NVE as an example of a very profitable nanotech company with three different product technologies and lines. Whether you like it or not, you have to merge together and consolidate for success. And the 3 rule is that your financing has to have three specific legs. First private or venture money. Second, some form of public or quasi public financing and last a piece of the government nanotechnology money, state money or of the stimulus plan. Look at A 123 and NVE as models. Notice their funding sources. Pay attention and prosper.
If you pay attention and restructure around these 2009 lessons, you can win. If not you may be out of business at the end of 2010.
Alan B. Shalleck
NanoClarity LLC
www.nanoclarity.com
©Copyright 2010 NanoClarity LLC
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