How Sylvatex Built Their Early Customer Pipeline Without a Finished Product

Building a customer pipeline for physical products faces a unique challenge: you need production capacity to fulfill orders, but you need orders to justify building production capacity. In a recent episode of Category Visionaries, Virginia Klausmeier shared how Sylvatex navigated this chicken-and-egg problem in the EV battery materials market.

Starting with Strategic Partners

Rather than trying to serve the entire market immediately, Sylvatex began with a focused approach. “We worked with very targeted collaborative partners and our supply wasn’t that significant,” Virginia explains. This selective engagement allowed them to validate their technology while managing production constraints.

Identifying Market Pain Points

The company’s early success came from recognizing and articulating clear market needs. Virginia describes their target market: “Today the EV energy storage markets are growing like nuts. And really at the heart of those markets are batteries. Batteries need to be lower in cost, they need to be abundant, and they need to be made with a much lower carbon footprint.”

This clear understanding of market dynamics helped them engage potential customers even before reaching full production capacity.

Managing Early Conversations

Rather than avoiding discussions about production limitations, Sylvatex incorporated them into their value proposition. Virginia shares their approach: “We started somewhat early ahead of the game, like in 2019 on targeting this market mostly because we definitely saw the swing for the fence. If the EV and energy storage market started to take off then these materials were going to be needed in abundance.”

This forward-looking perspective helped frame current production constraints within a larger strategic context.

Building Trust Through Transparency

The company maintained credibility by being direct about capabilities and limitations. “Scale right now is our biggest challenge,” Virginia acknowledges. “How to make more of the right stuff faster in a way that is going to be healthy for us as an organization and also capital efficient and also derisking the technology.”

This transparency helped build trust with potential customers, even when they couldn’t immediately fulfill all requests.

Leveraging Market Momentum

External factors helped validate their approach. “Now you kind of fast forward post COVID and there’s a lot of build back better that occurred where a lot of major markets are focused on the EV and energy storage revolution,” Virginia notes. “No longer do we have to say hey, this is coming, we support that. Now everyone says oh, it’s here.”

Planning for Growth

The company’s vision for scaling provides a roadmap for early customers. Virginia outlines their plans: “We will be at commercial scale. We’ll be supplying cathode material that’s likely going to come from domestic recycled supply chains. And we’re going to be supplying cathode material to probably one of the most progressive, successful domestic electric vehicle, automotive OEMs.”

Key Lessons for Deep Tech Founders

Sylvatex’s experience offers several insights for founders building early customer pipelines:

1. Focus on select partners who understand development timelines
2. Frame current limitations within future growth plans
3. Use market trends to validate your approach
4. Be transparent about capabilities and constraints
5. Build relationships that can scale with your production capacity

The story challenges conventional wisdom about needing a finished product before engaging customers. Instead, it suggests that early customer relationships can be built on shared understanding of market needs and development trajectories.

For deep tech founders, the key takeaway is that customer development can and should proceed in parallel with product development – as long as you’re transparent about capabilities and timelines.