Another year, another SynBioBeta conference in the books. This year we were back at the beautiful UCSF campus, one of the birthplaces of synthetic biology with the development of recombinant DNA. This was the most impressive year yet, and it is clear that synthetic biology will soon touch every aspect of our lives. There are many bio-based products that are available today, and more are right on the horizon. Throughout the conference, three themes stood out. Investors and entrepreneurs should keep the following in mind when evaluating new technologies:

1. Synthetic biology will positively impact the environment

Many of the companies that debuted during the first wave of synthetic biology pursued biofuels in an effort to provide clean energy. Though the biofuels business has not yielded many successes, this year we saw many other ways in which synthetic biology companies can combat the environmental damage caused by an exponentially growing world population and create useful products while doing so. Mango Materials can take waste methane and turn it into biodegradable polyester, which both cleans up greenhouse gases and produces clothing that doesn’t damage the environment. During the Innovations for Ocean Sustainability session, sponsored by the Fish-Free Feed Challenge, companies like NovoNutrients shared their efforts to produce fish feed using waste gasses. Also in that session, BioCellection showed their progress in developing microbes that feed on unrecyclable plastics and create useful compounds. These and other companies will be crucial to protecting our environment, though some of their profitability may depend on governmental policies that put the correct price on the many negative externalities that currently go untaxed in incumbent industries.

2. Target markets should be high-value (at least at first)

As mentioned in my synthetic biology investment thesis, one of the reasons early biofuels companies failed was that they were targeting markets with price targets that were too low to be profitable. Many of the startups that presented at SynBioBeta this year seem to have learned from the mistakes of synbio past and are now following the Tesla model: target markets with high-value products first, even if the market is smaller, and move towards markets with lower price targets as the technology improves. Lab-grown leather startup Modern Meadow and textile dye startup Colorifix are both targeting luxury fashion as their first markets. AMSilk is producing spider silk for use across a range of cosmetics. And as anyone who owns a printer knows, products don’t get any more high-margin than printer inks, which Living Ink is producing using engineered algae.

3. Synthetic biology is not just a supply chain replacement

Jason Kelly from Ginkgo Bioworks kicked off the conference by explaining the power of biology as a manufacturing platform. Biology is self-assembling, self-repairing, and self-replicating, and can create products that have much more interesting properties than conventional manufacturing techniques. Companies using biology as a manufacturing platform are realizing this and are creating value beyond lower costs of production or cleaner manufacturing processes. Modern Meadow’s leather can be engineered to have unique properties in terms of shape or texture. Chefs can make unique dishes using Perfect Day’s milk proteins without having to use all the other compounds within milk. bioMASON’s cement has improved performance over normal building materials in terms of on-site construction and insulation. Though many synthetic biology products will eventually have much lower costs of production than those of similar products fabricated using conventional methods, smart companies will look to provide value across multiple orthogonal measures.In closing, there are so many exciting advances being made in synthetic biology right now, from enabling technologies that are dramatically decreasing the cost of product development to increased interest in the field from traditional manufacturers and investors. The points listed above are important to keep in mind to ensure profitability. People interested in keeping track of how the synthetic biology field is progressing should continue to attend the annual SynBioBeta meetings (next year’s should be amazing, as it will be a whole week of events) and follow my blog where I will continue to provide analysis of the industry.