BioLumix: Rapid Microbiology

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BioLumix has developed a product to detect bacteria and microorganisms on-site in production facilities. Its target industries include food, pharmaceuticals, and nutraceuticals. BioLumix's initial focus is on the nutraceuticals segment estimated at $250 M/year.

This interview with Gideon Eden, CEO of BioLumix, is the first in our New Enterprise Forum series. In this series we are looking at early stage technology companies. At the heart of these companies is innovative intellectual property coupled with a potential business model. The goal of these interviews is to understand how the entrepreneurs got to where they are now and why they think they can succeed.

BioLumix has developed a product to detect bacteria and microorganisms on-site in production facilities. Its target industries include food, pharmaceuticals, and nutraceuticals. BioLumix estimates the total testing market in those segments to be $2.2 B/year. Its initial focus is on the nutraceuticals segment estimated at $250 M/year.

The nutraceutical segment has recently been subjected to new regulatory requirements by the FDA that they test their production processes for contaminants. These firms typically have neither testing labs nor trained microbiologists so must outsource their lab work at great time and expense. The bioLumix product reduces both the cost and time associated with testing. Recently, over the course of two major industry gatherings, the firm garnered 150 qualified leads and 10 definite orders.

BioLumix operates off of a "razorblade" financial model. Their product comes in two parts: an electronic tester and disposable testing vials. The tester costs $15,000 and the vials $2 to $3 apiece. Over time, the financial outlay for the vials far exceeds that for the original tester.

In future segments, we'll explore the details of the business model, get a demo of the tester, and discuss with Gideon and his co-founder Ruth Eden how they founded BioLumix.

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» BioLumix: Question and Answer from Michigan Innovators

Some follow up questions to BioLumix's elevator pitch. We discuss competitors, FDA, and how exactly a company might need to run hundreds of microbiology tests per day. Read More

3 Comments

Brian Dickhart on June 9, 2008 4:09 PM
Sounds like you have a winner here Mr. Eden!, You really did a great job of identifying your target market, and very early too. I like how you have decided to focus mainly on nurtaceutical companies. With natural and holistic medicine growing rapidly, this segment of the market would benefit the most from your product because of the cost of labor and time saved. I also like the idea of your "razorblade" financial model. It's like the consumer is saving money for the initial purchase of the machine and making up for it with continuing vial purchases. That is a good approach to selling. The only thing I would be concerned about is the waste form using so many disposable vials. A lot of these nutraceuticals are committed to lessening their impact on the environment, and I feel that some may be turned away by all of the waste the disposable vials may generate. Nonetheless, the BioLumix is a great innovation not only for the nutraceuticals, but for the consumers buying their products. The consumers will have a better sense of safety because of the bacteria testing. Good Luck with this great product, Brian Dickhart, Eastern Michigan University
eric frasier on November 11, 2008 3:17 PM
I wish I would have watched this interview first its very informative about their business model their customer base and how they plan to create revenue. IT does a nice job of reassuring investors that they have leads and some customers who are already willing to order and to show that this is a product that can be used by many companies in several industries. It demonstrates their razorblade model and how it will eventually create far more revenue than the actual equipment. I really like this model and feel that it has become very popular over the last several years in industries where it wasn’t before, it has worked well for both the razor blade companies but also the soda industry as well with their fountain pop machines. It is a very convincing sales pitch and shows that their machine works well for both large and small companies. I really like everything about this company and it all looks very polished. The only questions that I would ask after this presentation is a time table on when production will start and how our products would be serviced in the field. I would also want to know if it is possible for other firms to replicate the vial technology or if it is unique and will sustain a competitive advantage.
Nikole Viltz on November 29, 2010 10:50 AM
I thought this interview as very interesting because of the creation of Ruth and Gideon Eden’s company. First of the change in company success and the change in names running companies are strongly described. The way that they came about creating their own company is by experiencing the impact of companies having new managing staffs (first on was in new jersey and the second was in Michigan). This is important to notice for entrepreneurs. Recognizing opportunity within your profession or education will give you the ideas of foundation of become a successful company just as Ruth and Gedion did. As they describe in the first interview the creation of the company is not to be sold as an individual microbiology company. It is created and has a higher success rate if bought be a bigger and higher known company. This gives major investors to work with a company but also give them an out if they want to venture on to new ideas and/or other corporations. I thought that the question and answer section of the interview as the most helpful. The description of the product allowed me to understand and grasp what they created. This product and idea not only seems like if it will be successful but also necessary by the world. Today sickness and health issues are very prone to be discussed. This type of technology and health protections is needed by the companies to protect themselves from certain illnesses and problems that may be prevented in the company. When looking at the competitive products, with this certain type of products there will always be other ideas and ways to look at the products. This means that the need will grow the more products being produced. Pharmaceutical companies will be part of the production of products and need to have a mutual understanding of that needs to be created. This type of product, though more advance then my undergraduate one class of biology seems to have great potential with the increase in fear of illness and sickness within our companies. Hazardous chemicals and bacterial on company equipment, can lead to debate of who is to blame. From my understanding the with outbreak of serious yet highly contagious disease such as Swine Flu the more protection against illness such as those will be needed.

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