Entrepreneurship and Sustainability: a Call for Newfound Innovation

On Wednesday the 27th of May, we had the chance to welcome Benoit Illy during our last Talent Webinar. Benoit, who joined Entrepreneur First back in early 2019 is the CEO of Fairbrics and holds a PhD in Nanotechnology and Material Sciences from Imperial College of London. Here is a write up of our exchange, moderated by Jonny Everett, about innovation, market fit and how to deal with investors when you are building a hardware company.

Entrepreneur First backs the most talented and ambitious people, pre-team and pre-idea to bring their ideas to life by building world-changing companies. As well as commercial goals, we’re proud to back founders who want to build companies that not only make money, but that make an impact on humanity’s biggest challenges.

This is why, at Entrepreneur First, we believe that supporting the most talented individuals to work on topics they really care about and are well suited to work on is the key to newfound innovation.

What was your mindset before starting the EF journey? What did you learn about yourself?

“I worked for ten years for major corporations such as Saint Gobain or Safran in France and in the US. Back in France, I wanted to choose what I will work on on a daily basis, and things that matter to me. And the best way to do so, is to launch your own company.”

Benoit’s mentality actually shifted when he came back from the United States where “everyone has its own company.”
He was ready to take a risk and apply to EF, with a high level of ambition. (More about ambition and technology here)

Even though he was not from a business background he had to quickly step up as a CEO of Fairbrics. As he stated he “basically at the beginning felt terrible at everything.” But you have a lot of opportunities to practice and level up when you are an entrepreneur and Benoit really felt he followed an exponential learning curve while being at EF. He recalls when he started the Programme that “[he] missed a lot of skills, such as financing or sales, which are primary skills for any CEO.” He described EF as “a practical MBA of a few months where you launch your company and work on a specific problem.” You can read more about the journey in itself here

“I had never sold anything in my life before, and as a CEO I needed to step up quickly.”

Was building a sustainable company at the core of your journey?

The vast majority of the entrepreneurs we have supported at EF want to build a company that makes a positive impact on the world, and not just one that makes money at any cost. Benoit is no exception. He wanted to have “since day 1, both a societal as well as a commercial impact. From the beginning I was obsessed about improving the life of people and sustainability was the most obvious way to do that.”

Indeed, Benoit’s view about improving the way we produce finished goods was all about maintaining the status quo. It may sound pessimistic but actually “[he] really wanted [his] kids to have the same comfort of living and if we do not create new ways of manufacturing products and consume, we are in dire straits.”

“We do not inherit the earth from our ancestors; we borrow it from our children.”

From this belief and the combination of their skills, Benoit and Tawfiq, his CTO, came up with the idea of Fairbrics. Together, they are developing a new way to manufacture sustainable fashion out of thin air. They are tackling one of the main problems the fashion industry is facing, carbon emission, which represents about 10% of global emissions. They are working to make textile production a circular industry, where the CO2 produced today creates the building blocks of the clothes made tomorrow, by turning carbon into polyester fabric.

Tawfiq, has been working on this topic for the last 6 years and came with the idea. After 2 weeks of investigation where he tried to find reasons why it was not possible, he started to believe in the project and was ready to turn craziness into a reality. And ultimately Benoit decided to step in the project as CEO.

What were the tradeoffs you had to make between being sustainable and commercially viable? Did they compete with each other?

Cost competitiveness is of paramount importance in hardware companies according to Benoit. Since Fairbrics is using the waste of an industry, namely the CO2, it can turn, in the long run, into a much cheaper solution for manufacturers meaning that the founders were able to reconcile sustainability and commerciality. They did not have to produce at large scale to convince textile manufacturers. “In order to have a foot in the market you need to produce thousands of tones but we only manage to sell a few kilos, and it was such a breakthrough innovation that people were ready to pay just to see it was for real.“

Benoit and Tawfiq were actually solving a hair on fire problem that will soon become an advantage because it is solving something in a way that seems unthinkable before and which is expanding textile brands’ traditional value proposition. Effectively, in the long run, their polyester would be cheaper than the one currently produced and could improve fashion image.

How was your innovation perceived?

The practices of fast fashion have been highlighted in numerous documentaries, one of the most notorious being The True Cost. Since then, some brands are looking to become “carbon neutral by 2050 so they are looking desperately for a solution and before we arrive, this solution did not exist, so the market was in need of Fairbrics.” What Benoit is essentially stating is a piece of advice we regularly give to our founders. Challenging a market is great, looking for a new market is even more interesting. And according to Benoit, fashion was one of the best sectors to bring a breakthrough innovation.

“The industrial revolution transformed the textile industry and has been refined and optimized for a hundred of years but it did not change in the last 70 years.”

Does hardware mean a harder route to seed investment?

One of the first things that comes to mind when dealing with an innovative hardware company is capital requirement. It often requires access to the lab, prototyping, or raw material costs. Thus a “clear and detailed planning is key to attract investors for a hardware company.” Investors will look into the trajectory of the company rather than looking at it now, investing in lines rather than dots.
Hardware companies are in fact more challenging to ignite, need higher capital expenditures and potentially a larger team at least at the beginning. As soon as you manage to have your first prototype, you have built a barrier to entry while in software, “the only difference from one company to another is the skills of the people they hire. In hardware, from the list of suppliers to the knowledge you put in your solution, you are setting your company apart from the competition.”

At EF, we regularly see hardware solutions that need in between 3 up to 7 years to be full scale on the market. This means founders will have to think about all the expenses for the years to come and will have to do a business plan over the next couple of years to seduce investors.

A company like Fairbrics will of course require some years, especially at full magnitude. All the generic rhetoric around startups (think about lean, minimum viable product, lean canvas etc…) takes a whole new meaning when dealing with a 3–7 years business roadmap rather than a software company whose main focus is to ship a product and iterate as fast as possible. Basically, hardware companies’ main focus will be to provide investors with a much clearer path than software because anything hardware requires a different school of thought to the more traditional Silicon Valley style companies.

How did you settle on key milestones?

Benoit and his CTO Tawfiq started by the end goal and did a retro planning to map all the milestones that will testify they were under good way. Each milestone was defined by the end vision, and to hone this vision they took examples from innovative hardware companies that did it in the past. They also focused on bringing credibility by convincing well-known researchers to work with them and be part of the board.

Newfound innovation is not only for the “crazy ones”. It requires a lot of pragmatism, planning, and lucidity over value proposition and we believe EF is the place for them to amplify their capacities and change their life for the better.

We are always on the lookout for exceptional talent.

Ready to start a new venture? Our programme runs in 6 different cities around the world: Paris, London, Berlin, Singapore, Bangalore and Toronto. Here is the link to apply to our next cohort and our website for more information.