Welcome to the 123rd edition of Deep Tech Catalyst, the educational channel from The Scenarionist where science meets venture!
This week, I sat down with Jeff Uhrig, a 2x exited Deep Tech founder who is now Principal and Founder of Beech Lab. In this conversation, he reflects on his experience as CEO of Sirrus, a specialty chemicals startup acquired by Nippon Shokubai in 2017.
We explore how the company turned a promising molecule into a commercially relevant platform, and how the team navigated application discovery, customer-led development, scale-up, capital allocation, and ultimately the acquisition.
Key takeaways from the episode:
🧪 A Breakthrough Material Is Not Yet a Business
Technical performance matters, but the first challenge is often finding a way to manufacture the material at a cost and scale that make commercial adoption realistic.
🎯 The Best First Market Is the One the Company Can Reach
The team moved beyond its original adhesive thesis by looking for an application with a lower technical barrier, a clearer operational advantage, and motivated customers capable of pulling the technology through the value chain.
💰 Sell Economic Outcomes, Not Chemistry
Customers were not asked to value an unfamiliar molecule in isolation. The company translated its performance into energy savings, lower capital requirements, and a value-based pricing model built around the economics of the end application.
🤝 Customer Feedback Can Shape the Next Generation of the Platform
The second major application emerged through direct collaboration with a commercial partner, whose requirements helped the team design new molecules with improved flexibility and thermal performance.
🏭 Treat the Exit as a Strategic Threshold
The decision was not simply whether to raise more capital or sell. It was whether the company should absorb the dilution and build the capabilities required to operate at commercial scale, or allow a strategic partner to create greater leverage while preserving the value of the technology and team.
BEYOND THE CONVERSATION — STRATEGIC INSIGHTS FROM THE EPISODE
First, Prove You Can Manufacture It
The Sirrus story began with a molecule that had been known for some time but had never been manufactured at a scale and cost that made commercial adoption realistic.
The material could bond surfaces quickly while remaining less reactive than traditional superglues. That made the chemistry interesting, but scientific interest was not enough.
The first real challenge was to develop a process capable of producing the molecule economically and consistently.
The founders came from Loctite, so adhesives were the natural place to begin. Yet when the company looked more closely at the market, adhesives proved to be a demanding entry point.
In adhesive applications, performance requirements were high, and the material often had to bond two very different substrates under specific operating conditions.
The company therefore approached the question with an open mind.
Instead of assuming that the molecule had to succeed in the application originally imagined, the team began asking where it could create value with the lowest technical barrier. That distinction was important.
The first application did not need to represent the full potential of the platform. It needed to give the company a credible way into the market, create early progress, and give investors and commercial partners a reason to continue supporting the technology.
Why a cheaper molecule may cost the customer more
To evaluate possible applications, the team used a simple framework:
“Could the material offer something better, faster, or cheaper?”
In advanced materials, however, cheaper is often the weakest place to begin.
A new molecule may have a lower production cost while still being more expensive for the customer to adopt.
Incumbent materials are often supported by infrastructure that has already been installed. Processes have been optimized, employees have been trained, and customers already understand how the existing solution behaves.
A new material can disrupt that system.
If adoption requires different equipment, changes to the production process, or additional training, the apparent cost advantage can disappear quickly.
A cheaper molecule can become a more expensive solution once the full operational impact is considered.
This pushed Sirrus toward a broader view of value.
The company could not compete only on the price of the material. It had to understand how the material affected the customer’s entire process and where its properties could create a meaningful advantage.
The commercial opportunity would emerge from finding an application where the molecule did more than cost less—where it allowed the customer to operate differently.
From Adhesives to Coatings
The first meaningful commercial shift came when Sirrus stopped looking at the molecule only as an adhesive.
The team had spent time studying where the material could create an advantage, and one property stood out: its very low viscosity.
In practical terms, the material could be sprayed without first being diluted with water or solvent. That opened a different path.
In coatings, solvents are commonly used to make materials easier to apply. They then have to be removed through drying, which adds energy consumption, equipment requirements, and process time.
Because the innovative material could be sprayed without adding water or solvent, it offered the possibility of a solvent-free coating with lower drying requirements.
The molecule also created a strong surface finish through covalent bonding. This made it particularly relevant for clear-coat applications, where the coating must protect the underlying surface from scratching, and chipping.
The opportunity was therefore no longer simply to sell a faster-bonding adhesive. It was to use the same underlying chemistry in an application where its existing properties created a clearer operational advantage.
The first application was discovered through iteration
This direction did not emerge from a single workshop or a design session. It came from repeated technical work, customer conversations, and substantial trial and error.
The team had to understand the material as it existed, while also considering where it could realistically go.
At the same time, it had to understand the customer problem well enough to identify the point where the technology and the application could meet.
That process required constant iteration.
Moreover, the Sirrus team was looking for an application where the material could solve a meaningful problem without requiring the company to redesign the entire platform before entering the market.
The coating opportunity met that standard. It lowered the technical barrier relative to the original adhesive thesis while preserving important performance advantages.
Customer motivation unlocks adoption
Even a strong technical fit, however, was not enough. Sirrus also needed a customer with a clear reason to move the technology through the market.
That became possible through a partnership with a large automotive company that invested in the startup and had a strong interest in reducing both the energy required to cure automotive coatings and the costs associated with drying them.
That motivation changed the adoption dynamic.
Sirrus was not selling directly into an isolated customer relationship. It operated through paint companies and other channel partners. Those suppliers became more interested in the technology because one of their major customers wanted the solution.
This created pull through the channel.
The lesson was that the best application is not always the one that appears most attractive in theory. It is often the one where the customer is sufficiently motivated to help move the technology through a complex value chain.
Selling Economic Outcomes Instead of Chemistry
Once Sirrus identified coatings as a promising application, the next challenge was deciding how to present the technology to the market.
The company could have approached paint manufacturers with a monomer and asked them to determine how it might fit into their formulations.
That would have placed much of the development burden on the customer and made the value of the material harder to see.
Instead, the team built formulation expertise internally.
Paint companies already considered themselves experts in formulation, and each chemistry came with its own technical nuances.
The company therefore positioned itself carefully. Its partners might understand coatings broadly, but Sirrus understood how to formulate its own material better than anyone else.
That capability changed the nature of the conversation.
When the company approached the customer, it did not lead with the molecular structure, covalent bonding, or interpenetrating networks. It presented a formulated coating that could be applied to a base coat and evaluated as a practical solution.
The chemistry remained essential, but it was no longer the center of the commercial message. The customer could see what the material did, how it could be used, and why it might matter inside an existing production process.
Building the price backward from customer value
The same logic shaped Sirrus’s pricing strategy.
Rather than beginning with the cost of producing the monomer and adding a conventional margin, the company started with the value created for the end customer.
In the automotive application, that value came from reducing the energy required to cure coatings and lowering the costs associated with drying equipment.
Sirrus examined how much energy could be saved per vehicle and how much capital expenditure could be avoided or reduced.
Those savings created an economic value for the formulated coating.
From there, the company worked backward through the value chain. It considered what a paint company could charge the customer for the coating and then asked how much of that value Sirrus could reasonably capture as the supplier of the underlying monomer.
This was a more useful approach than pricing the molecule in isolation.
The relevant question was not simply what the material cost to manufacture. It was how much economic value the material enabled once incorporated into the customer’s process.
Sharing enough value to support adoption
Value-based pricing did not mean attempting to capture all the value created.
Based on the conversation, the team worked on the assumption that, to enter the market, the OEM would capture somewhere around 70% of the value created.
That left the startup and its channel partners to divide the remaining benefit.
The pricing decision therefore depended on balance. The company needed to preserve enough value to build an attractive business, while leaving customers with a strong financial reason to adopt the technology.
This also reinforced the importance of understanding the full channel.
Sirrus was not selling only to the final user. It needed to create value for the paint companies that would formulate and supply the coating, while ensuring that the automotive manufacturer still received a compelling share of the savings.
The stronger Sirrus became at translating technical performance into energy savings, capital savings, and value per vehicle, the easier it became to explain where the molecule belonged economically.
The company was no longer asking customers to pay for an interesting chemistry. It was showing them how that chemistry could improve the economics of production—and then pricing the material according to the value it made possible.
Letting Customers Guide the Expansion
For its first commercial application, the team followed a deliberately simple principle: change the underlying technology as little as possible.
The initial objective was to work with the easiest version of the molecule to manufacture and identify applications where it could already create value.
This reduced technical complexity and allowed the startup to move more quickly into collaborations with partners.
That approach mattered because the first market entry was not meant to prove every possible use of the platform. It was meant to create progress with the material the company could already produce reliably.
The team could then learn from real applications before committing additional time and capital to more complex molecular development.
When customer feedback becomes a product roadmap
The second application emerged from a conversation with a supplier serving semiconductor assembly.
The partner saw clear advantages in the existing material. It cured quickly and had low viscosity, both of which made it attractive for the application.
But the customer also identified two important weaknesses: the molecule was too brittle, and its expansion characteristics were poorly suited to repeated temperature changes.
In a semiconductor application, those limitations were critical.
As a chip heats and cools over its operating life, the surrounding materials must expand and contract with it. If the adhesive cannot respond to that thermal history, it can lose adhesion and compromise the application.
The customer’s feedback gave the development team a much more precise target.
The problem was no longer whether the material had interesting properties. It was whether those properties could be adapted to meet the requirements of a specific, valuable use case.
Advancing the material through co-development
Rather than redesigning the chemistry in isolation, the company worked directly with the partner to develop new molecules.
The goal was to preserve the advantages of the original platform while improving flexibility and thermal expansion behavior.
The team produced a range of molecular options based on those hypotheses, and the partner tested them in the end application.
This changed the relationship between technical development and market discovery.
The customer was no longer simply evaluating a finished product. Its application knowledge became part of the development process, helping the team decide which technical improvements mattered most.
That is how the platform expanded: not through a broad search for every possible market, but through a focused collaboration with a partner that understood both the value of the existing material and the limitations that had to be solved next.
From Bench to Scale
For an early-stage materials company, scale-up is not separate from technology development. The two happen at the same time.
As the process moves from bench scale to pilot and demonstration scale, new problems emerge.
Reactions behave differently. Side reactions appear. Material can polymerize inside piping. Steps that looked straightforward in the lab become difficult to control in a larger system.
The team chose to keep that learning inside the company.
Rather than outsourcing the full path from laboratory development to demonstration scale, the company kept that work in its own labs.
That allowed the company to understand the full supply chain and preserve the knowledge created as the process evolved.
Some of that knowledge could be protected through patents. Some was retained as trade secrets. In both cases, the practical experience of solving scale-up problems became part of the company’s intellectual property.
Designing capital efficiency into the process
The underlying manufacturing approach also made the scale-up path more manageable.
The process used continuous-flow chemistry, allowing relatively large volumes to be produced in a small reactor. It also relied on small-diameter piping systems that could be replicated as production requirements increased.
This created a “modular path to scale”, making the manufacturing story easier to understand and the process more capital efficient.
In other words, partners could look at the demonstration-scale system and see how the same basic process could operate at much greater capacity, without assuming that the company still had to solve an entirely new engineering problem.
The real value was held by the people
Over the course of the conversation, it became clear that the company’s equipment mattered, but the people operating it mattered more.
By keeping development and scale-up work inside the organization, the team accumulated the practical knowledge behind the technology: what failed, why it failed, how the process had been improved, and which decisions were essential to making it work.
That knowledge became central when communicating with partners and, later, potential acquirers.
Bottom line: a company is only as valuable as the people who understand what has been built. The more technical learning those people retain, the easier it becomes to explain why the technology is credible, how it can scale, and where its value truly lies.
The cost of expanding too early
Capital efficiency at the process level did not eliminate difficult decisions at the company level.
At the earliest stages of its journey, the company was pursuing opportunities across adhesives, coatings, inks, and sealants. The team expanded to support all 4 areas, reaching roughly 40 employees.
That breadth created excitement, but it also created significant cost before the company had established product-market fit.
When leadership concluded that the business could not succeed across all four markets simultaneously, the organization had to narrow its focus.
Headcount was reduced by more than half, and the company moved from pursuing a wide range of possibilities to concentrating resources on the strongest opportunities.
According to the conversation, over 7 years, the company raised approximately $40 million. Around one quarter was used for capital equipment and installation, while most of the remaining capital went toward people, resources, and advisors.
The difficult lesson was that a broad platform can create too many plausible directions. Without focus, capital can be spent expanding the organization before the market has shown which opportunity deserves to be built.
Exit Strategy
As commercial partnerships advanced, the company reached a decision that many Deep Tech startups eventually face:
One option was to raise additional capital, build manufacturing capacity, and develop the commercial infrastructure needed to scale independently.
The other was to allow a larger strategic partner, already equipped with capital and operating resources, to take the platform forward.
Both paths were credible.
The company’s partners had seen enough technical progress to support further expansion. They wanted the team to move ahead with a capital plan and increase production capacity.
But building that capacity would have required fresh capital, creating the potential for significant dilution.
However, the decision was not purely financial.
The capabilities required to develop a material at bench, research, and demonstration scale are very different from those required to own and operate commercial manufacturing assets.
A startup may be confident that it can build a plant. Operating one safely, reliably, and in an environmentally sound way is a different challenge. It requires different people, systems, and daily disciplines.
The team understood that bringing those capabilities in-house would be difficult and costly. The skills that had made the company successful in technology development would not automatically make it an effective manufacturing operator.
That distinction became central to the strategic decision, and rather than viewing an acquisition as the automatic end goal, the company treated it as a threshold calculation.
A final lesson from this journey is that the decision reflected the same discipline that shaped the company’s path: understanding what it was uniquely capable of building, recognizing where external partners could create greater leverage, and choosing the option that best preserved the value of the technology and the people behind it.
