Ginkgo Bioworks CEO Wants Biology to Manufacture Physical Goods

(Bloomberg Businessweek) -- One of the leaders in the buzzy synthetic biology space is Ginkgo Bioworks, a company with hundreds of millions of dollars in investment and a valuation of $4.2 billion. CEO Jason Kelly spoke to Bloomberg Businessweek Editor Joel Weber about how his disruptive technology could change the world, from the cell on up.

Joel Weber: It’s been a few years since I took a biology class. Remind me, what is synthetic biology?

Jason Kelly: Think of a cell. It’s kind of like a little machine that runs on digital code, very similar to a computer, except in this case the code—instead of zeros and ones, it’s A’s, T’s, C’s, and G’s. The cell reads that code, and it does all the things that a cell does in our body—or a bird’s body or bacteria in a river. They’re all running on that digital code. We can read that code with DNA sequencing and can write that code with DNA synthesis or DNA printing. If you can read and write that code, and you have a machine that’ll run it, that’s programming. So synthetic biology is programming cells like we program computers, by changing the DNA code inside them.

What are you doing at Ginkgo Bioworks?

We’re essentially a platform that allows cell programmers to program cells to do different things. We have partnerships with Bayer in agriculture, for example—a $100 million joint venture to program microbes that would produce fertilizer for crops. That’s an example of what you would program a cell to do. We’re sort of like cell programmers for hire. Our job is to make the cell do what our customers want.

We bought a 100,000-square-foot facility in Boston. It’s lots of robots essentially doing work similar to what I did in my Ph.D. If you get a Ph.D. in bioengineering at MIT, it’s basically five years of moving liquids around a bench. We’ve taken that kind of physical activity and moved it onto robots to bring the cost down with automation.

What was an early application?

Our first customers were in the fragrance industry. You get mint oil from mint leaves. We would take the genes from mint by reading the DNA code of the mint plant, find the part of it that encodes the mint flavor, print out the code from the mint plant, redesign it a little bit, move it into brewer’s yeast—like you use to make beer. And then when you brew it up, instead of beer coming out, mint oil comes out. It’s a lower cost, a more stable supply. Our job was to produce that yeast for our partner, and then they would sell the mint oil and we would get a royalty.

What do you do with all that mint oil?

Mint is one of the biggest flavor ingredients out there. There’s a whole industry that does flavor and fragrance production; New Jersey is sort of the center of that world.

Where has your business gone since those first customers?

Things like food ingredients. Enzymes for making things like cheese. I’ll give you a little more detail on this partnership with Bayer as a good example. So Bayer came to us and they wanted to work on the problem of nitrogen fertilizer. The way you get it today—I’m a chemical engineer, and this is the pride of chemical engineering—is you pull atmospheric gas through a big chemical plant. You burn natural gas. Globally, 4% of greenhouse gases goes to making ammonia, nitrogen fertilizer.

You put it on a field: Half goes to the crops, half goes in the river; we all get to eat. You’ve got a local environmental problem; you’ve also got a global greenhouse gas problem. But otherwise we don’t produce enough food, right?

This is true for most crops, except for soybeans and other legumes, because they have microbes in their roots that run that same chemical engineering process. They pull nitrogen out of the air, and they make fertilizer for the plant for free. You use way less fertilizer for those crops.

Remember crop rotation? That’s what that was, rotating through crops that fertilized themselves. But corn, wheat, and rice—which make up half the global fertilizer usage—don’t have these microbes. What we’re doing is taking the DNA code from the microbes on the soybeans, redesigning it to work with the microbes in the corn. Then you apply it as a seed treatment, and it’ll fertilize that crop so you can wean corn off fertilizer over time. That’s the idea, and it’s about an $80 billion market for fertilizer, just in that application alone.

So what’s the vision for your business model?

You’re a big company, and you have an idea for what you’d like a cell to do. You come to us, and we agree on the spec. We program the cell to do it. We give you that cell app. That’s our product. It’s essentially an intellectual-property license. We’ve written a piece of custom software for you, except it’s a custom genome inside a cell. You then take that back and build a business around it. The key is: I need to get a piece of that. It could be a royalty or—we just announced a partnership with Y Combinator—we can take equity in companies that are building on top of our platform. We want to make it so that everybody uses our platform to program cells. It’s much cheaper than it’s been historically.

You want to start a biotech company? You’ve got to build a lab. You’ve got to get equipment. You’ve got to get all the lab materials. All these things are an enormous upfront expense, and it really limits innovation. So what we’re saying to the Y Combinator companies is: Just use our platform. We’ve already built all that. We have that huge fixed cost, and you get a low marginal cost. And I will program that cell for you in exchange for a chunk of your company. That’s the deal.

How many partnerships are you guys up to now?

We have 50 cell programming apps that we’re developing with about 25 different customers today, mostly large companies. That number’s going to start to go up a lot, because we’re working with smaller companies now. And once you think of it as a technology that you can program to do new things, it’s clear to me that we will use biology essentially to manufacture all physical goods in the future. Everything.

Where are we capable of going?

You’ve had an Impossible Burger, right? You bite into that thing, and it bleeds. Where’s the blood come from in a veggie burger? What they’ve done is they’ve taken that brewers’ yeast and programmed it to include the gene for hemoglobin—which makes your blood red. They brew it up and produce hemoglobin. They add it to the burger, and lo and behold, It smells right. It tastes right. It cooks right. You need that stuff to have a veggie burger not taste like cardboard. So people are excited about things like the trillion-dollar market for beef. But you are only seeing some early applications there.

Look inside an apple. There’s a level of nanotechnology and molecular complexity that is much greater than your Apple computer. That’s the kind of stuff where biology excels. It makes that thing from nothing. We don’t have any way to make highly molecularly complex nanotechnology on the cheap, except through biology. Biology is this really weird thing we completely take for granted. Plant a seed. Add air, water, and sunlight. And this thing manufactures itself, right? It’s got solar panels, it’s powering itself. If Apple showed up and was like, “I invented this seed, you plant it in your yard”—we’d be like, “This is alien technology.” I think some of the applications will be advanced materials and electronics. It’ll make food more efficiently. It’ll be everything.

How are you going to scale?

More robots. You think about Moore’s Law and the doubling effectiveness in the semiconductor industry every 24 months for 50 years. The last five years of Ginkgo, we’ve been roughly tripling the output of our facility and halving our cost annually. Today we’re about 10 times cheaper than doing it with a scientist at the bench. Actually, that was last year. Now we’re about 20 times cheaper, and then next year it’ll be 40 times cheaper and then 80 times cheaper. Somewhere around there, everybody comes and starts working with us.

We haven’t brought up GMOs [genetically modified organisms] yet. I thought I wasn’t supposed to like them?

Yeah, I love GMOs. I did an editorial in the New York Times maybe three years ago that said, “I run a GMO company. I think we should label GMOs.” This is right around the time the legislature was looking at national GMO labeling laws here in the U.S., so let’s just say this was against industry opinion at the time. After I wrote that letter, I got hate mail from a Nobel laureate. Scientists look at this and say, “There’s been all these safety studies. There’s a million, trillion meals eaten in the U.S. And there haven’t been safety issues [concerning GMOs]. We just need to do a better job communicating the science.”

The reality is, it’s not an issue of safety. It’s an issue of trust. Do people trust the organizations deploying important powerful technology to be acting in their interests? What you’ve seen with GMOs was a lack of trust in those organizations.

The basis of trust is transparency. If you tell me, “I really want to know if this is in my food,” and I tell you, “oh, heck no—I’m gonna fight till my dying day to not let you know that,” your assumption is, “oh, it must be bad.” And that’s a very rational, reasonable response. So our view is, we should be proud of GMOs at Ginkgo. If you have something made with a GMO, you know it’s being made with biology. If you care about what’s in your food, if you’re the kind of person that looks at a label, you probably care that things are made sustainably. Well, let me tell you what the most sustainable manufacturing technology is on the planet: biology. It’s the only large-scale manufacturing we’ve had that’s played well with the planet for three billion years. And by the way, I mean large-scale. Think about jungles. Think about industrial agriculture.

Biology makes more physical goods every year than the auto industry or the oil industry, by a mile—and completely renewably. Buying GMOs means buying into that vision of being able to manufacture everything renewably. Make everything with biology. We should be proud of it.

If you’re thinking of yourselves as gatekeepers of your code, in a sense, what security measures are in place to make sure that your code is safe?

Extensive. I love Jurassic Park, but it isn’t like a person coming in, putting the vials in the Barbasol can, and sneaking off. It would be hacking your servers. At this point, we can print DNA at Ginkgo. You type ATCGGG into a computer, you hit print, and that piece of DNA comes out of a machine, and we put it into a cell. If you had the code, then you could print it out of your machine and take our stuff. So we’re very careful about the data asset.

What’s it feel like to be on the brink of something so game-changing?

The most exciting thing for me is that I just started to sound less crazy. We have this $120 million deal in the food protein space—animal proteins without animals—the deal with Bayer, the deal with [F. Hoffmann-La] Roche, some of the biggest names validating that synbio—synthetic biology—is the technology of the future.

What would a big win look like for you?

Animal-free products. That’s a really great opportunity. Obviously, there are things like the Impossible Burger. But we have this spinoff company called Motif FoodWorks, which has the $120 million investment, and it’s doing things like making egg proteins, milk proteins, and so on. Everything’s in Version 1. And you play that tape out, that’s an enormous opportunity from a sustainability standpoint. Food production is a big, big greenhouse gas emitter, from fertilizer all the way to the cow farts. And for people of that persuasion, it’s an animal welfare issue. If we can get products created out of yeast fermentation or plant-based products that people are excited about tasting, that’s very exciting for me.

What sort of applications are there for, say, cannabis?

We have a partnership with a large Canadian company called the Cronos Group, a $100 million deal. We’re basically programming cells to produce cannabinoids. It’s very similar to what we did back in the fragrance industry. You get cannabinoids—THC, CBD, and so on—by extracting the oil from the flower of the cannabis plant, and then that goes into things like vaping and edible products. The process for doing all that growing is extremely expensive and requires big greenhouses. What we’re doing is reading the DNA of the cannabis plant and finding the part that encodes the cannabinoids. We then move it into brewer’s yeast, brew it up, and instead of beer, you get CBD.

Ginkgo has five co-founders. What’s that like?

I sat down with Mark Zuckerberg a few years ago and was like, “I’ve got this cool company, we program cells, we’ve got five founders”—and he was like, “That’s a lot of founders.”

Four of us were in MIT grad school together, all at the same age; Tom Knight is the exception, he’s more like a grand statesman. He was a professor at MIT and came up through the punch-card era of computing. I have this black-and-white photo of Tom with his master’s thesis: a refrigerator-sized minicomputer. In the mid-’90s, he had this realization that cells run on code. You can read and write the code. That’s programming. He thought, “I’m one of the world’s best developers of programming tools. Maybe I can help?” But biologists think of it differently: “Oh, if I can make a little change to the DNA, which might take me an afternoon working by hand to turn one A to one T in the genome, I get to understand biology better.” Tom’s like, “That’s like a zero to a one in a computer.” If we have to do that by hand in an afternoon, how are you going to program anything? We need a completely new platform for toolmaking. And so the founders have been working together since 2002 on the same problem.

So you’ve been together 17 years now, what’s the secret of playing so well as a team?

I like biology analogies—we’re now more like an organism. Reshma Shetty is doing management. Barry Canton is our CTO. Austin Che is a jack-of-all-trades and handles a lot of the big things that come up. We get out of each other’s way. Back in that beginning, there was way more butting heads. But by the time we hit the scale button, we had all figured out kind of who we were. That helped enormously. We don’t butt heads nearly as much because of that. Barry was my roommate and married Reshma right after we started the company. It really was kind of like Friends.

Only with $4 billion.

Yeah, a little more on the line.

What do you think your technology looks like, say, 20 years out?

By then we’ll see a big expansion in the number of people deploying this, probably in some unexpected markets. What gets me excited is that it’s going to be really unpredictable what the apps are going to be. As long as we keep making the platform better, people are going to show up and want some apps. It’s going to be fun, I think, to see all the different things that come out. In the future—maybe 30 years out or something?—it’s going to be all the nonbiological stuff.

Like, we’ll be brewing iPhones?

Or at least we’ll grow you a microchip.

To contact the editor responsible for this story: Howard Chua-Eoan at hchuaeoan@bloomberg.net

©2019 Bloomberg L.P.