Episode 28

#28 Find the Problem You Were Meant to Solve, Then Go Solve it: Christina Lomasney, Co-founder and CEO of Modumetal

As an early stage entrepreneur, how do you balance having a big vision with staying narrowly focused on a product’s proof of concept? Meet Seattle-based nanotechnologist, Christina Lomasney, whose startup uses electrochemistry to “grow” metals. Listen to Lomasney’s conversation with Kelly Hoey for advice to female founders about the importance of focus, communicating your vision, and how a Herman Hesse quote about happiness has sustained her quest to disrupt the legacy steel industry.

Notes

Dan Schwartz

Dan Rosen

Alliance of Angels

The Great Bridge by David McCullough, iBooks

Andrew Carnegie Biography.com

Nikola Tesla Tesla Memorial Society

Production of Aluminum: The [Charles Martin] Hall-Hérault Process American Chemical Society

Washington A. Roebling Roebling Museum

Clara Barton American Red Cross

Additional Reading

Policy protection of IP critical to nation’s competitiveness Christina Lomasney, The Hill

This startup can grow metal like a tree, and it’s about to hit the big time by Katie Fehrenbacher, Fortune

Founders Fund Leads $33.5M Round For Modumetal, Maker of Nanolaminated Metals For The Oil And Gas Industry by Kim-Mai Cutler

What Great Leaders Have in Common by Ryan Allis, The Startup Guide

Top Entrepreneurs And Investors Share Their Best Fundraising Tips For Startups Alex Konrad, Forbes

6 Places To Find The Right Investor For Your Startup by Martin Zwilling, Forbes

Is Seattle Silicon Valley’s Next Favorite Stop? by Hadi Partook, TechCrunch

FAIL FAST, FAIL OFTEN, FAIL EVERYWHERE by John Donahue, New Yorker

6 Ways That Lack Of Focus Can Kill Your Business by Martin Zwilling, Forbes

Guest bios & transcripts are available on www.broadmic.com.

Bio

Christina has a BS in Physics from the University of Washington. She conducted her undergraduate research in the D.T. Schwartz Electrochemistry Group and later completed studies towards an MS in Physics. Christina previously worked at Boeing in a variety of capacities including as lead on programs related to advanced metals manufacturing in the Prototype Machining Center. Christina co-founded Isotron Corporation, a composite materials company, in 2001 and served as President/CEO through 2006. She took this company to profitability without outside investment and currently serves as its Chairman. Christina is President, CEO and a Director of the Board of Modumetal.

Transcript

Woman 1: Happiness is for some people finding the problem that is appropriate to them. And that they weren't born too early or too late that they were able to encounter that problem in their life. And I feel like this is my problem.

Woman 2: I am an entrepreneur.

Woman 3: Be inspired. We are incredibly powerful.

Woman 4: Color outside the mind.

Woman 5: Open your mind.

Woman 6: Dream big.

Woman 7: Be bold.

Woman 8: Take action. The narrative needs to change.

Woman 9: We can fix this, we can change this.

Woman 10: I know we can.

Man 1: Think broad.

Woman 11: Think like a broad.

Woman 12: Think broad.

Kelly: I'm Kelly Hoey, host of Broad Mic. I speak with the most accomplished entrepreneurs, investors, and thought leaders about the issues that matter in building a business. You will get the inspiration as well as the picks and shovels you need to become a better entrepreneur. Today on Broad Mic, I'm speaking with Christina Lomasney, a president and CEO of Modumetal, a startup that uses electrochemistry to create a nano-laminated alloy. Previously, Christina co-founded Isotron Corporation, a composite materials company and served as its president and CEO. And that was from 2001 to 2006. So we jump ahead and today I'm speaking with her about co-founding Modumetal, nanotechnology, cleantech, and what it is to be building a startup in Seattle. Christina, welcome.

Christina: Thank you very much, Kelly. It's a pleasure to be here.

Kelly: So what the heck problem is Modumetal solving? And what the heck is nanotechnology for those of us who don't know?

Christina: Well, we're solving an interesting problem that most people don't recognize they actually have. We're defining a new class of metals and we're defining a new way of manufacturing them that's cost effective and very scalable. And the challenge that we're overcoming is the limitation that exists with conventional metals manufacturing. It's sort of a status or a status quo that we've accepted that we design around today and that we don't necessarily have to accept as a limit. So we're gonna make it possible for people to imagine new kinds of parts, new kinds of engineering capabilities and to do that through materials which are really fundamental building blocks of all kinds of things.

Kelly: Very, very, very cool. So how does Modumetal fit within the clean tech landscape?

Christina: Well, we are redefining the way metals are manufactured. Today, metals are primarily produced through heat-based processing. So heat is the primary source or inputs form of energy in the production process. We're using electricity instead. So we actually manufacture metal near room temperature, which means for us that we can entirely redefine the manufacturing process for parts. We can start with the form of a part and actually produce an end part from that form in one step which isn't possible today. Today in metals manufacturing, you have to start with melting an alloy, producing an intermediate, typically forming that and machining it. There's a whole lot of waste in that process that we eliminate by virtue of just one single step.

Kelly: That is, I'm almost speechless. This is beyond cool. So beyond cool. And you said before, I know that in conversations before today's interview talked about the fact that you're growing metal. What do you mean by that?

Christina: Well, it's again, different from the way that metals are manufactured today. Today when you produce metals you actually kind of melt them into a soup and then you have to form them into something. The process that we use is electrochemical. So we actually start out with the same kind of soup but we grow metals So we're actually taking metal from a solution and we're reducing it into a metallic form. And we're doing that under the influence of an electric field. So we're actually growing the metal under that electric field atom by atom. And it's very similar, probably the closest to analogy I could come up with is the way a tree grows. A tree grows by adding material and creating layers in fact that are the results of the seasons. So the density in wood as it grows changes and it changes because perhaps it's spring time and it's cooler outside or it's summer time and it's hotter. In our case, we're growing metal and changing an electric field. And when we change that electric field we get layers that grow as we grow that metal.

Kelly: Okay, I'm just...this is one of those conversations on Broad Mic that my head is just like exploding with all of this information. But I wanna know about you a little bit. So what factors in your childhood or background influenced you to, let's say become an entrepreneur and become an entrepreneur in this area?

Christina: Well, I never had any expectation of becoming an entrepreneur as a child but I did grow up around it quite a bit. My grandfather actually started a paint company that my father took over. And I started my first company with my dad. So there just wasn't so much of a mystery around entrepreneurship in our family. And so I think that's the reason that when we decided that we wanted to pursue this vision, entrepreneurship or an entrepreneurial venture seemed like the form for it. And we just said, "All right, we're gonna do it."

Kelly: That's fantastic. And what about in terms of studies in school, what was it that led you, you know, down the path that's got this interest in nanotechnology?

Christina: Yeah, I wouldn't say there was anything in school that necessarily prepared me for entrepreneurship. But in terms of this field of study, I studied physics in my undergraduate and then went back to graduate school and started out trying to run a company and go to graduate school at the same time which didn't really work out. But a common theme across all of that was electrochemistry. So I actually did my undergraduate research right here at the University of Washington in the chemical engineering department and then in a group that's run today by Professor Dan Schwartz that focused in electrochemistry. And so that's been a common theme across the ventures that I've been involved in, in fact. And so I really came to entrepreneurship from that from the technology side. Ultimately, I'll say that it was very important to me in the long run, I didn't realize it at the time, that I also took a few accounting classes along the way just so that I can learn more about the terminology. I think I've used that to great extent throughout this entire venture.

Kelly: That's so funny and I'm so glad you raised that. We have had several guests, particularly on the VC side, who are always pushing with respect to female founders, you know, know your numbers, know your numbers, know your numbers. So thank you for mentioning how handy that accounting class came in. So what was the aha moment or event that you said, "All right, I need to start this company," which is now Modumetal?

Christina: Well, the venture actually started out as an internal research and development project. And it seemed like a cool technology but when we first started we didn't really realize the broad implications that it could represent. At some point, we had developed this capability of making layered alloys and making them in intricate shapes. And we started looking at how we could leverage this approach to change different kinds of characteristics and materials, things like how materials corrode or how strong they are or how tough they are, how much energy they can absorb and everything from that to their thermal conductivity properties.

And we realized that these materials are fundamentally different from the homogeneous metals we rely on today. And that this could represent a whole new field of science, a whole new field of engineering, a whole new field of architecture. And that really there was no industry that's using metals today that we couldn't touch. And I'll never forget, I have a great adviser here in the Seattle area, a gentleman named Dan Rosen. And I sat down with him and just said, "You know, what would you do if you were me?" And I won't forget, we sat on the living room floor at his house. And we made the decision that, you know, somebody had to pursue this. Somebody had to see how far this technology could go and I decided that that's something I wanted to do. That the implications were, you know, were so profound and it deserved to run. And it's not preordained at this point that we're gonna be successful but we are definitely gonna make sure that we see it through.

Kelly: So how, you know, thinking about this and thinking about you sitting there, you know, living room floor plotting this out, how did you assess the size of the potential opportunity?

Christina: Wow. Well, one of the interesting things to note is that we actually define entire shifts in civilization by the materials, of the primary materials of construction of the day. So there's a stone age and there's an iron age and there's a steel age and arguably there will be a composites age someday. And so it's noteworthy that not only are materials the basis for great economic value creation but there are also just, they're major game changers. So it's almost impossible to size the opportunity because we're talking about, you know, 25 trillion dollar metals market.

Kelly: So to, you know, use some startup jargon here, have you pivoted?

Christina: We've pivoted quite a few times. I mean, I'll share with you. We started out in 2006, right? Our first markets were automotive and construction. We obviously didn't time those very well. We've worked in consumer electronics, we worked in the oil and gas sector, we worked in aerospace. So we've tried a lot of things. And I think at this point we've demonstrated success in some core areas. So we eventually got there.

Kelly: And what was the process for identifying, you know, your target customer in some of these segments, you know, say oil and gas?

Christina: We took a very strategic approach. So what we're trying to do is very hard. We are trying to change an industry that hasn't changed in arguably in a century, that really the last great innovation in metals industry was steel. And so we recognized that it wasn't just gonna be the case of saying, "Here's this really great technology. Here are all the things that it's capable of. Look at our data and now let's change." We were gonna be up against very strong incumbents, we were gonna be introducing technology into markets that don't know how to adapt new technology. And so we had to be very strategic about who we engaged with and who we partnered with and how we did that in the marketplace. And really at the end of the day what it came down to was who has the most to gain from the new capabilities that we were gonna enable. And those are the companies and the entities that we've partnered with and that have helped us bring this change about in some very big markets.

Kelly: Amazing, amazing. So you've done a little fundraising. So what is it? You've raised upwards of 42 million. You recently raised a $33 million round included Peter Teel's Founders Fund. You've added two new directors to your board and I want to come back and ask you about that. But first of all, what are some differences in your fundraising strategies for growth stage, in terms of who you're looking at speaking to and the type of...you know, they say not all money is not the same but the money you've been looking for versus when you were raising capital at an earlier stage?

Christina: In fact, a lot of our investors have been the same people or the same entities through multiple rounds of financing. So we have several of our customers that have been engaged with us both as customers and as investors through more than one round of financing. When we raised the last round of financing, we wanted to bring in some new insight through the equity capital raise. And really, we recognized before we raised the money that the founders fund, they have a manifesto, in fact. I shouldn't say a focus, it's a manifesto that resonated with us. They are very focused on investing in companies that are sector creators. And we felt that they appreciated the vision we are trying to achieve. This isn't for us about demonstrating nano-laminated alloys for one single application or one single industry. It really is about the broad implications of this class of materials and this type of manufacturing process and it's ability to impact a number of industries. And they recognize that. They also recognize with us the complexity involved in achieving that.

And so it was really about finding that right partnership that is gonna get us to the ultimate vision. I think, again, for every venture that partnership is gonna look different and the right partner is gonna be different. And so it's really just a question of trying to figure out what you're trying to accomplish and how you can surround yourself with the right partners that are gonna help you get there. And for us it meant that team from the founder's fund and many of our existing customers and investors.

Kelly: Well, and I'm gonna say that, you know, get back to the fact you've now added two new directors. How big is your board now?

Christina: We have three people on the board.

Kelly: Okay. And so that, yeah, it's a big raise. You get, you know, two new people on it. Does that knowing that some of these at this stage, was it being growth stage and that the money coming is wanna add someone on the board? Did that also influence your decision of, all right, who am I bringing to the table with the check because they're gonna be sitting in here helping me, you know, lead the vision?

Christina: Absolutely. And that goes back to my earlier comment that we really looked at fundraising as a way of bringing in partners into the venture. So whether there are, you know, partners that are shareholders only or partners that are shareholders and participating on the board of directors, they are partners across the board. No pun intended.

Kelly: Seattle. What's it like building a startup there? What should people know about the Seattle startup ecosystem, you know, as I sit here in New York City?

Christina: Yeah. You know there's a great mantra in real estate that it's all about location, location, location. And I think there's some truth to that in entrepreneurship as well. We are lucky in the Seattle area, in Washington State in general, that we have all of the right pieces for material science startup. We have access to capital. So Dan that I mentioned earlier, who is really our founding board member, he chairs the Alliance of Angels here in Seattle. And so he's part of an active community of early stage investors that they were part of the support structure that allowed us to get our company off the ground. We also have direct access to a university that's world class. So we have access to talent, access to the infrastructure that's necessary for the kind of research that we do.

And as well, we have a community that appreciate the need for material science. Certainly the, you know, Boeing's role, warehousers role in this community make a big difference in terms of our orientation towards material science. So it was the right place for us to be in getting started and I feel like we were very lucky that we were here doing what we were doing and that we've been able to take advantage of that ecosystem in getting this company off the ground.

Kelly: Very cool. So what thoughts on failure? What role does failure play in success?

Christina: I think the term failure means different things to different people. I and my team don't accept failure. So failure to us is when you fall down and you decide not to get back up again or you stumble and you say that's it, I've had enough. And it's not part of our vocabulary. But with certainly the stumbling part is. And I think it's an absolute necessity that we accept that we're gonna stumble along the way. We're gonna make wrong decisions and we're gonna have to correct them. And that really success is about getting up again and, you know, starting over if we have to or continuing the journey and finding a better way. So, you know, we face our fair share of challenges. We notably burned down our first production facility. We had an equipment malfunction in the opening day of boating season in 2013. Our first production facility burned down and I think there were a lot of people who thought that was it but we send no dice. Got back up, and started over again. So here we are manufacturing at large scale in the area.

Kelly: It comes up with challenges that the rest of us haven't thought about. Yeah. Wow, that's a sort of spectacularly way to start your business, burn things down.

Christina: Well, it's the reality of entrepreneurship, though. I think the companies that, you know, that we look at and we hold up as examples are the companies that have faced those kinds of challenges and been able to get back up and, you know and find the path forward. That's what the whole thing is all about in my mind.

Kelly: So nothing else people can listen to this interview and think, "You know what, she burnt down her facility and she still was able to get, you know, Peter Teel to it and others to invest." So, you know, how bad can my failure be?

Christina: There you go.

Kelly: You know we want everyone to take something away and be motivated. You mean you're tackling such a big market in such an incredible global problem and it's a, you know, global economic as you've already pointed out, a GDP issue on all of this. How do you build a team and a culture that is capable of hanging in there for this long term and contributing to the long-term growth of the company that you're building?

Christina: I think probably the most important thing for us when we got started was that we had a very clear vision for what we are trying to accomplish. And the way to get there has changed along the way but the vision itself was clear from the start. We knew what we were about, we knew what we're trying to accomplish and that's been communicated to every member of our team. So when we say that this is a mission-oriented organization we really mean it. We really mean that we are oriented towards achieving that vision that we have described for ourselves that involves realizing this class of materials at an industrial scale at a cost that's competitive. And we've also defined very specifically the impact we wanna have on certain industries.

And so that's, I think that for us has been...it's been translated into our culture. Beyond that, you know, for us, we value very highly our competence and our rigor when it comes to this capability as well. We recognize that in a lot of the applications we're pursuing, we are the safety factor, we are the difference between, you know, a piece of infrastructure that corrodes and fails and one that doesn't. We are the strength and the bridge where the toughness in an automobile or car door. And so that means a responsibility to be competent in our fields and rigorous about our studies. And so that's also, you know, that's manifest across the team in every aspect of what we need to do, not just the engineering. And I think beyond that we are inspired, we're inspired by what we're doing. And the second definition in the dictionary says inspiration is the product of creative thought and action, right?

And I like that. I like that, you know, there's a certain element of imagination on the one hand and initiative on the other. And that also really defines who we are. And it doesn't matter if you're talking about, you know, the accounting team or the quality team or the manufacturing team or the team that's defining the next new architecture for material. All of those attributes are part of our culture.

Kelly: How big is your team now?

Christina: So we don't disclose our team size.

Kelly: Oh, okay. But it's big enough that you've got lots of people and also the functions you have to oversee.

Christina: We do, we do.

Kelly: And how's that for you as being, you know, in charge?

Christina: It's, again, it all comes back to the vision. And in my mind, we are all responsible at different levels in the organization for that vision. And so for me, you know, it's been a case of building a leadership team and an engineering team and an accounting team as I mentioned that all see that vision and that have, you know, that have a contribution to the culture that's a positive contribution. And it's no different than, you know, finding partners in our venture capitalists and our customers. It's just, you know, these are the guys that I get to work with every day and they are in a way an extension of my family. We get to collaborate every day on trying to make this vision a reality. And it's incredibly fun.

Kelly: Amazing, amazing. One last thing I'd like to ask you before we get to our pay it forward questions is, you know, any advice for first-time founders in terms of, you know, starting a company with somebody else? You know, I meet a lot of solo founders, I meet a lot of people who found companies together. Any advice for first-time entrepreneurs?

Christina: I would say regardless of whether you're founding a venture on your own or founding with a partner, I would say two things. I would say number one, know what you're about. So this comment about having a vision and defining it very specifically is really important. And I...we actually, my co-founder and I had an exercise where we went through and we said, "Okay, how would we write the New York Times article that defines our success, you know, ten years from now?" And we sat down and we did that. We did it independently. We described kind of a vision for the future. And probably the most important thing for both of us was making sure that we were looking at the future in the same way. And so that, you know, just having that clarity of vision was absolutely critical because so many things are gonna go wrong. You know from day to day we don't always see eye to eye but at the end of the day it's about the vision, it's about achieving that ultimate goal and having good clarity around that was absolutely essential to us. So I would say that's absolutely the most important thing. The other thing is it's gonna take a village, right? It's gonna take a team and finding partners and finding collaborators and finding, you know, other leaders that are willing to join with you is gonna be absolutely critical. So just be ready for that and always be on the lookout.

Kelly: You never know where you're gonna find someone. So thank you for sharing that. And I love that idea of that exercise, you know, write your success story and do it independently and make sure you're on the same vision. All right. So here, not that the rest of this hasn't been fun but this is where we get, you know, our fast snappy answers with our pay it forward section. So what are your primary sources of information?

Christina: I don't really know how to answer that because I think I get information from so many different sources. I remember the quote from Sir Francis Bacon that said, "Reading makes a full man, writing makes a precise man, and conference makes a ready man." And so I would say from all of those, from reading, from writing, from, you know, conferencing or joining with others, I've been able to get information. So it's all of the above.

Kelly: Everywhere you can take it in.

Christina: Amen.

Kelly: What book are you reading?

Christina: I am right now reading The Great Bridge by David McCullough which is...it's the story of the Brooklyn Bridge. And it is the most unbelievable story of father and son that had a vision and that did not quit until they saw it realized.

Kelly: Wow. Do you have any rituals or habits you swear by?

Christina: I think there are sort of three things that are important to me personally. My physical life, my intellectual life, and my spiritual life. And so I try to make sure that I don't let any of those fall by the wayside, that I always, you know, I always find a way to, you know, get a workout in and keep engaging myself intellectually and spiritually as well. But I wouldn't say it's habitual enough that I can call it a ritual.

Kelly: That's amazing. Who are three entrepreneurs or leaders you admire?

Christina: I have the benefit of so many contemporaries, so many other entrepreneurs that have inspired me in what I do. So everyone from Andrew Carnegie to Nichola Tesla to Charles Martin Hall to now Washington Roebling and John Roebling, his father. It's just, I think there's so many stories there about men and women that have overcome adversity to achieve what they thought was a vision for the future.

Kelly: What's the best advice you've ever received?

Christina: I think just now the advice that I got from Dan Rosen that continues to echo in my mind, especially now in our venture about, you know, small companies. More small companies go out of business because of indigestion and starvation has really continues to echo and remind us of the importance of focus as we get this venture off the ground. And so I remind myself of that just about every morning.

Kelly: I wanna take that advice to heart. Are there any particular myths that you would like to dispel for our listeners?

Christina: There's one really big one. I have been as a woman and as an entrepreneur starting a venture in the United States, the beneficiary of a system that has allowed me to go out and do what I wanna do realize this vision. So I could dream a big vision and I could go out and execute on it. And I think for a lot of us that seems like some kind of a treasure that we just found. And I think that's a great myth. It is decidedly a gift that we have, this ecosystem in the United States that allows us as women especially to pursue our visions and there's a certain responsibility that goes along with that in trying to make sure that we preserve that responsibility or that capability, that opportunity, and that we continue to expand on it from one generation to the next.

Kelly: What words of advice would you give to listeners about taking risks and closing the confidence gap?

Christina: Oh, wow. I would go back to what I said earlier about the vision. Have a really clear vision. Know what you're about and what you're trying to get to. Because getting there is gonna challenge all of us. I mean, you know, I'm challenged every day in my confidence, in my ability to execute. And it's the vision that allows me to get up in the morning and say, "Okay, let's take on one more challenge."

Kelly: Can you give me a name of a female entrepreneur who is below the radar screen that we should know about?

Christina: I don't know. And maybe that's the answer to the question is that you don't know what you don't know. But I am on the lookout for the next one as well.

Kelly: All right. Well, when you find that next female entrepreneur in Seattle we should know about, I want an email or a tweet so, you know, we can add this to the show notes. And finally, what does think broad mean to you?

Christina: For me, it means there is no boundary to what you can accomplish. So thinking broad is about seeing those possibilities without seeing the boundaries.

Kelly: Fantastic. Thank you so very much for this conversation, Christina. I just absolutely love it.

Christina: Well, thank you, Kelly. It's been my delight.

Kelly: Thank you for listening to Broad Mic. We welcome your feedback. Find us on Facebook where you will have show notes and additional references for a deeper dive into today's topic. Subscribe on iTunes so you never miss an episode. Please review our podcast on iTunes which will help other listeners discover Broad Mic and grow the Broad Mic community. Broad Mic is produced by Christy Mirabal with editing by John Marshall Media. Our executive producer is Sara Weinheimer. Think broad.

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