Deeper Down the Biology Rabbit Hole

What happens when biology becomes technology?

Over the next 10 years we’re going to witness radical changes in how our economy produces and manufactures just about everything. 

Last week’s issue brought my awareness to a deep rabbit hole of new, exciting innovations that I was only partially aware of. Biomanufacturing is just the top of the iceberg to an entire overhaul, top to bottom, of the way we produce almost everything that we use in our day to day lives. 

We’ll see leather that doesn’t come from animals. Ice cream that doesn’t come from cows. Plastics that come from plants. Fuel that comes from algae. Medicines that come from bacteria. Fertilizers that don’t harm our groundwater. And, fully customizable microbes that might even be able to clean our oceans of plastic (hopefully without side effects though…)

We’re going to see a complete shift from industrial production to biological production. Harnessing nature and genetics as the industrial engine of our economy. And, with that shift comes cleaner products, more efficient processes, and less resources needed.

This sweeping level of innovation is why I started writing this newsletter. The impacts of changes like this are global, rapid, and shift the direction of so many “negative” trends that we’re informed about from traditional media. 

The innovation is broadly called “synthetic biology”. Synthetic, in this context, refers to the human element. Synthetic biology combines research and knowledge from some of the most cutting edge disciplines of the modern world. 

Here’s the list if you’re curious: biotechnology, genetic engineering, molecular biology, molecular engineering, systems biology, membrane science, biophysics, chemical and biological engineering, electrical and computer engineering, control engineering and evolutionary biology.

Just one of these disciplines has brought the world so much value with it’s inventions. Now, we’re witnessing the innovations of one pollinating the innovations of another, multiplied by thirteen… what do you get? Exponential change.

Synthetic biologists, and the companies that are using these innovations, create, design, and re-design biological components (the building blocks of life) with the intention of developing novel outcomes that nature, as we know it, has not yet developed for us. 

One company I came across in my research, called Bolt Threads, manufactures “spider silk” using just two ingredient, yeast and sugar and fermenting them in a bioreactor. It’s hard to conceptualize the second and third order effects of one company creating silk from yeast. 

A quick google search pulled up estimates that the global clothing industry contributes 10% of total global emissions. A single company like Bolt Threads has the potential to wipe out a huge chunk of those emissions. 

Right now, there are two main types of fabrics, natural and synthetic. Many of our favorite synthetic fabrics such as polyester, nylon, and spandex are made from petroleum products.  Petroleum products require us to drill, transfer, ship, and refine oil. 

Natural fabrics, although better, still have massive environmental impacts on the Earth. The cotton grown in Georgia has to be trucked to a dock, loaded on a ship, transported halfway across the world, processed into clothing, shipped back to America, and transported to the final store where it will get sold. That’s a lot of energy spent to get a t-shirt onto a shelf at Target. 

But, one single innovation, synthetic spider silk derived from yeast removes 90% of that, potentially more. All the fossil fuels are cut out. All the pollution and emissions from the growing of the natural fibers is gone. Even the transportation and manufacturing of the final product will get dramatically reduced as the silk can be grown close to where it’s going to be sold! 

Now, repeat this same example for so many of our foods, materials, medicines, and more and it’s hard to imagine how in such a short period of time we could be living in a different world. One where we’re not talking about the environmental impacts of eating meat because the supply of meat from a factory farm gets replaced by synthetic beef grown in a bioreactor.

So, this is a mega-trend of a mega-trend, and it’s not science fiction either. These are real companies that have existing products. The next ten years we’ll see who can get a scaled product to market that’s cheaper and more effective than our current selection. 

The question I’m asking is how and where can I invest to participate in this shift that’s taking place right now. 

There are two recent IPOs I’ve been made aware of in the synthetic biology space, Ginkgo Bioworks (SRNG) and Zymergen (ZY). Ginkgo appears to be a “picks and shovels” play on the entire space. They partner with companies developing novel synthetic biology products and help them manufacture, scale, and optimize. Zymergen is more of a direct play on biomanufacturing of specific products. I haven’t done a deep dive into their product line up but in a new and developing industry the picks and shovels plays are usually the most sure bets.

One other idea that I have not had much time to look into is if there’s a real estate angle on this. I’d love to own a REIT that targeted the biomanufacturing sector and owned the real estate that all of these companies need to set up their manufacturing in. That’d be the hands down simplest way to make tons of money as this trend accelerates.

That’s all for today. If you’ve enjoyed my work, please consider forwarding this issue to friends or family who might also be interested. You can also click the button below to find other ways to share. 

And, one last request. If you have an area of interest or topic you’d like me to cover, reply to this email or drop a comment below! I am always looking for exciting and interesting new innovations to write about.