The following interview is a conversation we had with Gary Ong, CEO & Founder of Celadyne, on our podcast Category Visionaries. You can view the full episode here: $5M Raised to Power the Future of Green Hydrogen Production
Gary Ong
Pretty good, Brett. How are you doing?
Brett
I’m doing awesome, and I’m super excited to chat with you here. So let’s go ahead and just kick off with a quick summary of who you are and maybe a bit more about your background.
Gary Ong
Yeah, of course. So I’m the Founder and CEO of Saladyne Pence. If you go to France, you might pronounce the company name as Saladin, but Celadyne and full name is Celadyne Technologies. And we do hydrogen production technologies as well as technology to enable durable trucking. Basically, the whole point here is that we’re trying to sunset diesel trucking so that you can make it completely renewable and at the same time make hydrogen cheap enough so that you can use it for industrial decarbonization.
Brett
How’d you get into this field? How’d you get into the space? Take us back to the early days when you were first talking about this idea.
Gary Ong
That’s a great question. So I actually founded a company after my PhD. I did my research in material science at Berkeley on this type of materials. And the honest answer was, when we started a company in 2018 or 2019 ish, kind of that cusp. We did it because no one else was really doing hydrogen. And at that time, were already quite convinced that hydrogen was a necessary solution for decarbonization. So, you know, when no one else was doing it, we figured, hey, you know what? If we’re like the 6th team doing it, and if it increases the probability of this succeeding, it’s worth it. So took the PhD work and spun out a company. Since then, we basically got incubated in this thing called chain reactions innovations out of Argonne National Lab, which is outside of Chicago.
Gary Ong
And that’s what brought us to Illinois and Chicago since then, expanded, hired employees, lived through Covid. That’s right. I hired my first five employees, literally, in March 2020. I can tell you more about that experience. And then after that, kind of bootstrapped it, raised a bunch of monies from the government, got some contracts, raised more money for investors, and now there’s 13 of us full time commercializing the technology.
Brett
So when you’re going through your PhD, was the master plan that you’re going to go and build a technology company someday, or how did that happen? Where did that entrepreneurial spirit come from?
Gary Ong
Absolutely not. I think when I started my PhD, right, I actually did it on batteries because I thought batteries was going to be this important thing to save the world. And then in my qualifiers, I remember doing this back of the envelope math of how amazing this technology was going to be and how it’s going to be super enabling for the fields. And then suddenly I realized, in that case, even in the best case scenario, I will be 1000 x off of what it needs to be to help the world. So that’s when I was like, okay, you know what? All this work I’ve been doing in batteries might not work. Make sense? Let me pivot the whole research to hydrogen.
Gary Ong
Because then one thing that people don’t talk about is, at the time, a lot of people complain about hydrogen technologies being kind of not as mature. Well, as a researcher, when someone tells you something is not as mature, you need to look at that and be like a kind of glass half full perspective, which is like, okay, great. So there’s a lot of room for improvement, right? That’s what you’re saying. So you do that, then you pivot your research, you make that happen. And then finally, at the end of the PhD was when I invented the materials, right, and the technology, and that was 2018. I spoke to my advisor, and at that time, she already had another startup going in the Bay Area.
Gary Ong
And were talking about it and was like, well, we can publish another paper on this, and it’s all fun and enjoy and stuff, but if you want to make this happen, this needs to see the commercial marketplace, okay? So being the researcher that I was right and still somewhat risk averse in 2018, I basically spent six, seven months convincing myself not to start the company. I cold called all the major chemical corporations and was like, can you guys please license this technology and bring it to light, et cetera, so that I don’t have to do it? And then I got, like, flat out nose from more than ten of them. And then, so finally, November, December ish, 2018 came. I was like, okay, well, if no one’s going to do it.
Gary Ong
And I really believe that this technology is going to help change the world, not leaving me much of a choice here. So then started a company and the rest was history.
Brett
And then talk to us about the COVID days. You had mentioned that there. What was Covid like for you? And then maybe the six months or nine months after Covid.
Gary Ong
Oh my goodness. Yeah. So we started the company. I was incubated after through Argonne. Then we got mentorship by Toyota and Shell along the way. And then everything was great. And then we got our first million dollars in grant funding. Think about that. That was so awesome. It all came in 2020. Q 1 January and February. I recruited, I was so proud of myself that I managed to like hire four people by the end of February, in a month of 2020. And then March happened and the whole world shut down. Even Argon national lab had to like kick us outside of the lab. And yet you still have to make payroll. It was absolutely terrible. So how did we survive that?
Gary Ong
Obviously, you start scrambling for the first month and you’re not exactly sure what to do because you don’t even know what Covid is at the time. So what we ended up doing was kind of just do as much office work as you can. But that runs out after about a month. Then we somehow managed to kind of sublease this like small biohacking space from like a fellow entrepreneur somewhere way outside of Chicago. I kid you not. It was like 100 sqft, right. And just started working there. And then because of COVID you can’t really have that many people in the space. So we would rotate and take shifts and stuff just so they can make some progress on the lab, on the project.
Gary Ong
And then six months after that, we managed to sublease some space on the University of Illinois, and that helps improve constraints. Now that’s 400 sqft still working in shifts night and day. And then after you get another 400 sqft still working in shifts night and day, and then next thing you know, you get to about 2021, 2022. And then we managed to convince like a large real estate person basically in Chicago to help us and fund and build our lab here. And thats how now we have 4000 sqft. But it was a lot of hustle in Covid. I forget sometimes just how difficult those times were. And im thankful that none of the employees actually left. And I think that original five, it’s probably like my most trusted employees today.
Brett
Wow, that’s amazing. Now what about commercializing this technology? Or actually, before we talk about commercializing this technology. Let’s talk about the technology in general. So let’s imagine that you’re at Thanksgiving or you’re meeting with your family, and your grandma says, gary, what does this technology do? How would you explain this to your grandma?
Gary Ong
Yeah, of course. So the best way I would think about it, right, is hydrogen technology. A journalist once told me it’s like, if you can make it happen, it’s the equivalent of a unicorn that can eat Brussels sprouts and poop filet mignon and fly to the moon. Real. Not joking here. Someone once told me that it almost sounds so good to be true. Here’s why.
Gary Ong
Right.
Gary Ong
Basically, the idea was you can take water, you can split the water and make hydrogen, which you then call your fuel. And then this fuel that you call hydrogen, you can put it into something called a fuel cell. You can tell scientists aren’t the most creative at making the names of objects. Fuel cell. It takes the fuel and it converts it back to energy and creates water. And then you just repeat the cycle. You run that device in opposite direction, and you can take water and make hydrogen again. Hence, sounds almost like bill of miracle.
Gary Ong
Right?
Gary Ong
And this was the original paradigm proposed when the technology was invented by NASA in the sixties and seventies. But you don’t see fuel cell cars today.
Gary Ong
Right.
Gary Ong
And hydrogen still isn’t a big player in the energy ecosystem, because a lot of these hydrogen devices just aren’t very durable or efficient effectively. So why is that, you say? Well, it’s because these devices fundamentally are actually very simple. It doesn’t take that much effort to make a fuel cell compared to, like, an engine. I think of it kind of like beer, if you’re familiar.
Gary Ong
Right.
Gary Ong
There’s really only four ingredients. So when you only have four ingredients, every piece has to be really good and really functional. Otherwise, there’s not much you can do. And one of the biggest problems that everyone talks about in a fuel cell you’ve probably heard of before is this thing called the platinum catalyst.
Gary Ong
Right.
Gary Ong
Well, we’ve actually optimized as much as you could with those systems already. But the thing that we actually have not changed in these materials is this thing called the proton exchange membrane. It’s the layer that separates what’s called the anode and the cathode in the fuel cell. One side’s hydrogen, one side’s oxygen. You have this very thin membrane, and its job is to make sure the hydrogen and the oxygen don’t touch, but somehow allow protons to go through so that you can complete the chemical reaction. And how good your membrane is basically dictates how good your device is going to be. It’s so important that the full name of a fuel cell is actually called the proton exchange membrane fuel cell. It’s in the name.
Gary Ong
Right.
Gary Ong
And one of the things that we have done at Celadyne is to improve this material that people have not really innovated on for the last 50 years. I want to tell you a little bit more. What’s the actual innovation on the membrane? Well, it’s quite simple. This material basically has to fulfill three roles. It has to be really good at blocking charges. It has to be very good at letting protons or ions through. And it has to be very good at blocking gases because you don’t want the hydrogen and oxygen to mix. Okay. We basically preserve the first two functions. Blocks electrons, let ions through. But our materials are about ten to 15 times better at blocking gases. That’s it. I think of it as, like, it’s a very funky, very expensive kind of like a chip bag, like a potato chip bag.
Gary Ong
It’s very good at blocking gases.
Gary Ong
Right.
Gary Ong
You’re blocking hydrogen. It’s important because the hydrogen and oxygen mixes. Then you have a ticking time bomb. You effectively have a bomb. But if you can block the hydrogen from oxygen from mixing, you get a safer fuel cell. If you make it really thin, you get a more efficient fuel cell. And finally, that material, this membrane, is also the first thing that breaks in a fuel cell. So if you make something that doesn’t really break as easily, now you finally get a very durable fuel cell. And everything I’ve just said about fuel cell applies true for electrolysis, too, which is the method you use to make hydrogen from water. Case in point, long story short, right? If grandma kind of phased out at this point, from Gary talking, I’ll just be like, just think about this, right?
Gary Ong
Imagine you can make this keystone material called the proton exchange membrane, such that if you get this right, you can dramatically improve the efficiency, durability, and safety of these devices. That’s what we did.
Brett
Let’s talk about commercializing this amazing technology. Where do you even begin? How do you commercialize this?
Gary Ong
Okay, let me tell you. So back to the story about COVID We invented this material, and as a scientist, right? You always come out thinking, you have invented this brilliant material. It’s king. Everything’s gonna be great. If you build it, they will come, right? No, because we started trying to sell this thing into customer discovery, and we heard all the right signals from our customers. And then Covid happened, and then suddenly no one wanted it anymore. Yeah, I know. It’s crazy, right? Talk about pandemic. Really helping you focus. No one wanted it. And then you say, why? What’s going on? So then you do more customer discovery. And then we find out that the material that we developed originally wasn’t just good at blocking gases, it was actually good at blocking gases, but also lets you increase the temperature profile of your device.
Gary Ong
It lets you operate with less water and lower humidities. It basically had a bunch of feature sets, okay, which made it a truly revolutionary material, but it also made it really hard to commercialize because it was hard to make and quite complicated. So then, because it was Covid, we said, well, we have 100 square foot of lab, okay, we can’t do all of this. It’s too complicated. So went back to our customers, and were like, okay, if I think of this as software instead of hardware for a minute and consider all these things as feature sets, which one is the most important for you? And very quickly, you arrived. Like, from the 80 20 rule, everyone cared about gas permeability or gas blocking ability and didn’t care about anything else.
Gary Ong
So then we realized, like, wait a second, if all you cared is about blocking gases and you didn’t care about the temperature thing or everything. For now, I can cut all that out of my commercial development, and that shaves off almost eleven months worth of development. And on top of that, it actually lets me simplify my chemistry and move away from organic chemistry towards water based systems. That’s why once we did that, were like, okay, if we can move everything water, then suddenly subleasing a bio lab doesn’t sound as crazy anymore because you can’t do organic chemistry in a biolab, but you sure as hell can do water chemistry in a bio lab. So necessity breeds innovation effectively. That’s what happened there. And then once we narrowed it down, the product timeline and commercialization plan became a lot simpler.
Gary Ong
And basically, you’re just addressing that number one customer pain point, acknowledging that after you’re done doing that, you’ll come back and kind of add feature sets to the technology. But for now, do that one first. And once we made that pivot, were able to ship materials six months later. It was incredible.
Brett
Wow.
Brett
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Brett
What’s the ICP of the customers who get really excited about this? Maybe the ICP isn’t the right word there, but what are the common traits of someone who gets excited about this technology?
Gary Ong
So I think when you say common traits, right. Are you talking about the technology or talking about the customer? The customers, they’re usually customers that are, you know, our first technology, basically, we shipped it to the oems, the fuel cell manufacturers, and the car makers, basically.
Gary Ong
Right.
Gary Ong
The Toyotas, Volvo of the world and such.
Gary Ong
Right.
Gary Ong
And one of the things they’re really excited about is that our technology, because it’s a materials technology, doesn’t just forces them to replace their current materials. Our technology bolts on to the current state of the art and basically has very little drop in problems. Like, we didn’t just develop a new material and say, okay, look, stop using what you’re using right now and replace it with our material, of which I don’t have a lot of.
Gary Ong
Right.
Gary Ong
Instead, we made it so that it’s an additive technology because we listen to our customers. Basically, we said, okay, this material has mechanics and so on and so forth that resembles the material that you’re currently using, and it augments the current material that you’re using. So if you have something that is not very good at blocking gases, we add our technology on top of that, and suddenly we make the material that you love block gases better. If you love this other material, well, we can augment that, too. So because of that, it’s a additive technology that bolts onto materials that they’re already familiar with, which makes it much, much easier to integrate.
Gary Ong
Right.
Gary Ong
I think of it as like, basically, if you’re a manager in, say, an OEM, and you’re going to try to procure this material, right. It won’t get you fired because it’s a material that is additive to something that you’re already using.
Gary Ong
Right.
Gary Ong
But it solves a very particular problem, which is gas crossover. And why is that important? Because gas crossover is directly related to durability. And you need to address durability if you want to use fuel cells, for instance, for things like heavy duty trucking, because in the case of trucking, the ownership periods are just much longer and you need these devices to last a lot longer.
Brett
What about your marketing approach? So sounds like you didn’t have a background in marketing. What’s that been like for you to learn marketing and to kick off marketing?
Gary Ong
I think our product speaks for itself. I think there’s another saying that people want to me is like, no amount of marketing can save a bad product, but a good product and save even the shittiest marketing. That or may not be true.
Gary Ong
Right.
Gary Ong
But to answer your question more specifically, I think we’re just good out of desperation in Covid.
Gary Ong
Right.
Gary Ong
We were forced to basically kind of confront the truth of what were solving for our customers, and that really helped us make a product that our customers actually want and directly addresses a pain point that they cared about, which was gas crossover.
Gary Ong
Right.
Gary Ong
More importantly for marketing, the way we’ve approached it is we used a lot of our connections that are available to us through the hydrogen ecosystem already. Because back in 2018, right, when no one was doing hydrogen, if you were in the hydrogen space, you kind of knew everyone, so it wasn’t that hard to get to even the Toyotas and the volumes of the world. So you had those connections already. So in my business, marketing looks a lot more kind of high touch B2B, marketing, where you literally know the purchasing decision makers and so on and so forth, and they know you rather than kind of like a scattershot approach where you do social media and stuff like that. After all, I think there’s only like 20 companies that dominate the whole market in my ecosystem.
Gary Ong
So it’s definitely high touch, very few number of fish, but each fish basically buys a lot of stuff. And we focus mostly on that. And then in terms of closing deals, we spend most of our time trying to send products out to our customers and iterating with them and making sure the technology meets their specs. Basically pretty basic there.
Brett
And I see you have contracts there, and I know you’ve mentioned that at the start of the interview. So that’s with the Department of Energy. You have a contract with the Department of Defense. What have you learned about securing government contracts like that?
Gary Ong
Patience. I think it took us a couple of tries three or four times before we ever got our first government contract. I like to think of depending on Department of Defense versus Department of Energy, what they’re looking for is different. In the case of Department of Energy, they’re looking for pretty high risk research, but has a very clear commercial timeline as well as impact.
Gary Ong
Right.
Gary Ong
So one of the things we found useful is that from all of our DOE contracts, we usually have an end user in mind, who is willing to take the material off our hands after the development already. And that’s important because at the end of the day, the DOE is interested in funding research, but they can’t really buy your product and help you commercialize it, right? They can give you money to commercialize it, but you need an end user and you need a customer. So once you get the letters of support and you actually get the end user interested, I found that it’s much easier to get DOe grants. Now. For the DoD, it’s a little bit different, because the DoD, Department of Defense, they’re an actual end user.
Gary Ong
So there you basically have to do a lot more customer discovery and really understand DoD requirements of what their problems is. And in our case, for instance, like fuel cells, what problems you can help them solve. Honestly, though, across both DoE and DoD, what I’ve really found useful just from a skill of, like, selling and customer discovery, believe it or not, empathy, actually empathy for your customer, especially with the DoD, I’ve found, you know, a lot of people think of DoD as like really risk averse, slow, kind of behemoth of a thing. And I’ve heard some founders say they don’t want to work with DoD, et cetera. We have actually found DoD to be great customers.
Gary Ong
We found them to be actually really risk tolerant and have specifications that I would consider very, very ambitious because the things they need to really fulfill missions are definitely on the aggressive side. I can’t disclose any more because, you know, DoD contracts, right? But even if you want to get an appreciation for it, right, if, for instance, if you go to like, Air Force special command or like the Navy, the seals, that stuff, and you ask them to tell you stories about how they use their equipment and what it means, if you can have, say, a power generation device that can replace the ten batteries or whatever they’re currently carrying on their rest, it would change your world. And the only way to understand that is to have empathy for your customers. I think I’ll tell you one more story before I stop.
Gary Ong
I think one of my biggest realizations of how fuel cells and hydrogen could change the DoD was I was at a military conference and I was talking to this soldier and he was like, man, if you can make me something that can generate energy, and he gave me numbers and so forth, right, it would make my life so much easier for the mission across three days in the field. And I say, how so? And it was quite simple. He took a vest from behind the counter and he’s like, stand still, don’t move. I was like, okay. And then he put it on me, right? And that thing had the ten batteries that had to lug around for three days on a mission. That vest, I kid you not, felt like it was like a hundred pounds. It was insane, right?
Gary Ong
And he’s like, oh, and that’s just the batteries, right? You don’t have the weapons and everything yet. And I’m like, how can you even move with all this on you? And he’s like, ever wonder why all of us are so buff? And I was like, it’s crazy. I was like, this is insane. I’m surprised you have any mission success at all with this on you. So I don’t know. It was a big moment of revelation. After that, I was kind of like, all right, time to basically build something that’s, like, really good for them. Because I was like, this is just insane. I consider this kind of inhumane, right? You shouldn’t need to lug that much batteries around on a mission.
Brett
Now, as I mentioned there in the intro, you’ve raised over 5 million to date. What about fundraising? What have you learned about fundraising throughout this journey?
Gary Ong
Were actually oversubscribed when we raised our funds, and by the time we closed in February and March, yeah, definitely over subscribed. We raised four and a half, but were offered quite a bit more. Not quite double that, but close to. And I found it is important for you to really understand what you want from your investors. I think early on, I made the same mistake, too. You kind of scattershot it, and you approach all investors, and you kind of just see all money as the same. But there is a thing to be like. If you get the right investors, they can add more value to you than just money. So I’ll answer that question two ways.
Gary Ong
Right.
Gary Ong
Number one is, in our case, our investors are dynamo Ventures, medieval mobility, and EPS shipping. And they’re all folks in the hydrogen demand side in the sense that they’re trying to use hydrogen for either logistics, mobility, or shipping.
Gary Ong
Right.
Gary Ong
And we ended up with them as investors because we wanted to use them as channels to get us more customers within these space and verticals.
Gary Ong
Right.
Gary Ong
So that was a very clear intent of picking these investors. But up until that point before, we really had that strategy of saying, hey, we’re going to find an investor that is in the hydrogen demand space, specifically in these applications. Trying to narrow down which investors you want and why is a lot harder. So that’s number one, right. Number two is just having the discipline of fundraising because as a Founder in a company, you’re always inundated by a billion tasks, and fundraising is just one of those. You’ll send the 50 emails and everything, and you might not get anything out of it right. So it’s hard to convince yourself to do it right. It’s easier to do other things where you’re like, there’s definitely a outcome that’s going to beneficial to the company.
Gary Ong
So what I found the most useful with fundraising is the discipline of fundraising. Basically, you’re like, every day, 3 hours a day, I’m just doing this fundraising thing, sending emails, having calls, et cetera. And turns out that kind of discipline applies not just to fundraising, but also to many things in Founder life that I would consider rather nebulous. For instance, commercialization works the same way, basically. But at the end of the day, though, I think for the fundraising, this is kind of good advice that I’ve read from a book before. It’s like from this book called Business Strip Bear. I don’t know if you heard of it. It’s by Richard Branson. The advice was like, just don’t forget, money is only important and useful for what it lets you do.
Gary Ong
You know, no point raising, like a ton of money if you’re just going to sit on it and actually use it to do something useful. So when it comes to fundraising, right, it’s important for you to know exactly where and when you’re going to deploy the funds and what you’re going to use it for. And you have to be very honest with yourself of how much you’re trying to raise and why. Because one end, if you raise too much, right, even if it’s a great valuation, now you have a really high valuation and a shit ton of money. But then it would not be a kind of efficient deployment of capital. On the other end, if you raise too little and you’re too conservative, then you basically run out of money and you have to raise again.
Gary Ong
And that’s very bad use of your time. So, long story short, know your investors, know what they bring beyond the money, because I found that it’s not the money that’s the problem, it’s the expertise.
Gary Ong
Right.
Gary Ong
Number two, have the discipline of fundraising, especially if this is your first time doing it. And number three, kind of know thyself, really know what you want to use the money to do and make sure you’re not just fundraising for the sake of fundraising today.
Brett
What do you think’s been the most important decision you’ve made at the company.
Gary Ong
Probably that pivot simplification of our technology. I think there is evolution from being a scientist or researcher to being an entrepreneur or CEO.
Gary Ong
Right.
Gary Ong
And that’s knowing to let go of something amazing in service of commercialization.
Gary Ong
Right.
Gary Ong
It’s like as a scientist, you always want to commercialize the most perfect science product slash engineering thing that you’re invented, discovered, or whatever, right? But for a startup, you need to basically dumb that down into the product, not just something with a billion feature sets. You don’t actually want to commercialize a swiss army knife if you can help it. Ideally, you want to commercialize one of the things in the swiss army knife to really solve a problem that your customer really wants. And I think the scientist tends to want to focus on the swiss army knife, whereas the entrepreneur is like, no, no, tell me exactly which one of these tools you want and need to solve your problem, and I’ll make you just that, but I’ll make you the best version of that thing money can buy.
Gary Ong
So, yeah, going back, that pivot or focus was probably the most important thing we made. And we see it in the trajectory of the company, both in the timeline after we made the decision when we shipped materials out of, as well as kind of how much money we basically saved and time that we saved.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision look like?
Gary Ong
At least four or five oems should be using solidarine materials in their fuel cells, and they see a bunch of solid electrolyzers, either near utilities and near truck stops and so forth, making hydrogen for refueling and industrial carbonization.
Brett
Amazing. I love it. All right, Gary, this has been a lot of fun. Before we wrap up here, if there’s any founders that are listening in, they feel inspired, they want to follow along with your journey. Where should they go?
Gary Ong
You can obviously follow us on LinkedIn. We always have periodic announcements about everything. We actually have two or three major news coming out. So I highly recommend you follow us on LinkedIn. Check our website again, kind of a thing. We’re about to kind of launch a new website, too, and so you can always subscribe to the list on our website. If you’re investors, there’s a very specific list for you. If you’re a partner or customer, there’s also a very specific list for you. And I guess if you really wanted to read, like kind of Founder related insights specific for me, I technically have a blog. It’s actually just my name Gary on.com dot. So our website solid tech.com dot. My personal blog is Gary on.com or really? I found that Founder communities tend to be pretty friendly.
Gary Ong
So if there are things that are not covered in those two websites and so forth and you want to like reach out, I think, I’m sure. Here’s your first task as a versioning Founder. You have to find my email. Maybe you can send an email to me.
Brett
I love it. Gary, thanks so much for taking the time. It’s been a lot of fun.
Gary Ong
You’re welcome. It was good to talk to you.
Brett
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