Nov. 3, 2003 – When it comes to small tech, Nanoscience Instruments Inc. prefers the enabler role. After all, you don’t have small tech without the tools to see into the nano and micro worlds.
Mark Flowers and Sebastian Kossek started their Phoenix-based distribution firm in September 2002 to fill what they saw as a void in scanning probe microscopy. Scanning probe microscopy (SPM) includes such products as atomic force microscopes (AFM) and scanning tunneling microscopes (STM) and accessories.
“Most of the companies we represent are small,” Flowers says. “Because this is a new field, there are a few big guys and a lot of little guys.”
The little guys, he says, are in a better position to supply specialized instruments and accessories to the companies and research and educational institutions that work at the micro and nano levels. “For instance, most AFMs are used in air, but a biologist might want to look at proteins in a liquid environment, not air,” he says.
The little guys may be able to address these niche needs, but they were at a disadvantage in reaching potential customers. “I basically saw a need in the marketplace for a company to represent small SPM [scanning probe microscopy] manufacturers that are based outside the United States, who need proper representation here. The U.S. is a huge market, but when you’re a small company you can’t afford to set up an international office, so you turn to a distributor.”
Because the field was so new, there were no U.S. distributors that specialized in SPM, Flowers says. “So they would use other SPM manufacturers based in the U.S. to distribute their products. Well, manufacturers make a big margin on products they manufacture and not a big margin on products they distribute, so they don’t put much effort into sales of distributed products.”
Flowers and Kossek decided to put their expertise and contacts in SPM marketing and sales to start up Nanoscience Instruments, a distributor that doesn’t prosper unless the suppliers’ products sell.
Kossek’s roots are in Europe, and he works the contacts there to line up manufacturers as suppliers for Nanoscience. “My roots were a natural fit for what we wanted to do,” he says.
The company’s biggest score so far was landing Swiss-based Nanosurf AG’s AFM, which Flowers describes as “an easy to use, lower-cost AFM for a large market of users whereas most of these tools are extremely expensive.” It’s the type of product that can introduce Nanoscience to many customers quickly, he says.
With small tech still an emerging industry, the SPM market looks good but it’s hard to put a dollar figure on it, says Edward White, an analyst at Lehman Brothers in New York. “It’s mainly a research market. These are research tools that are going to be bought by laboratories and universities. It’s not as though there’s a big production market out there today.”
As for the business, Kossek is very confident. “It’s a growing market, and there’s no risk for us, basically, because we are not a manufacturer.”
That’s an advantage because it provides customers with a broad variety of products not obtainable from a single manufacturer, Flowers says. “We offer them one-stop shopping for the tools they need.”
Nanoscience Instruments Inc.
P.O. Box 93464
Phoenix, AZ 85070-3464
Started by Mark Flowers and Sebastian Kossek in September 2002. The two are veterans of the SPM industry.
Instrument and equipment distribution
Small tech used
While Nanoscience Instruments does not manufacture products directly, it enables companies, universities and labs to perform research using the latest in SPM technology
Mark Flowers and Sebastian Kossek, partners-founders
Personal investment by founders.
$100,000 – $150,000
Selected strategic partners and customers
- Image Metrology
- Aurora Nanodevices
- Atomic Force F&E
Barriers to market
As a distributor, Nanoscience Instruments is at the whim of its suppliers — if their products fail to sell, their profits suffer. Nanoscience Instruments takes on the additional risk of working with companies that are often quite small, and functioning in a market whose size and growth potential is difficult to assess.
“As a very new startup, building our brand name and becoming well known is our primary goal right now,” Flowers says. “The educational aspect is attractive to us as well, to help teachers in the United States get the right tools so they can train students to go out into the work force and work in this industry.”
Why they are in small tech
“I’ve known that this was going to be the next big thing since 1992,” Flowers says. “If you look back at the gold rush in 1849, you could spend your time panning for gold and maybe strike it rich, but if you really wanted to make sure you got rich you didn’t look for the gold. You sold prospectors the Levis and the pans and the other equipment and tools they needed to look for gold. We’re selling the tools.”
What keeps them up at night
“Dealing with small companies in the nanotech space is exciting, but they are all small companies,” Kossek says. “There’s always risk involved in terms of product development, lack of speed in development efforts, etc.”
– Research by Gretchen McNeely