Investors beware, history is about to repeat itself in Ablate Biotech (1), an ag tech start-up that surfaced recently. Newly appointed CEO and co-founder Jonathan Phillips, the self-proclaimed former “senior executive with a world-leading laser manufacturer” (2) who was going to uberize the relationship consumers had with farmers (but failed dismally), has succeeded in luring the two men behind a promising ag tech concept, GPD Technologies (3), inventor Greg Drouillard and business brain Tony Soares, into a new venture. Phillips doesn’t detail his track record with that laser manufacturer, Domino Printing Sciences and its American subsidiary Domino Amjet. If you are considering investing in Ablate Biotech, we strongly advise you to read this blog. For more detailed information, read here (4).
In short, around 2011, Domino became very interested in NewMarket Impressions (NMI), a Yucaipa Companies (Ron Burkle) controlled start-up that had acquired the assets of EggFusion. Around 2005, EggFusion developed and protected laser technology aimed at marking individual shell eggs for human consumption (5). Domino’s interest was logical: its investment had the potential of supplying hundreds, if not thousands of lasers to TEN Media LLC, the joint venture it set up with NMI. Investing $ 50m for a 15% share in July 2011 (6), Domino sent Phillips, a senior US-based Domino Amjet executive with laser and business development experience, to TEN as Chief Technology Officer to look after its interests and investment. Phillips failed badly. So badly that Domino had no option but to write off its entire investment at the end of 2013 (7). This didn’t stop Phillips from completing his U-turn on Domino and becoming CEO and President of TEN after Domino had withdrawn.
Ignoring flawed consumer studies, Phillips went ahead with the same business concept that had led to EggFusion’s failure ten years before: generate revenue from marking eggs with a traceability code and freshness date. Consumer studies conducted in Florida in 2010 failed to address a vital issue: whether consumers would be prepared to pay more for TEN’s eggs. In 2015, he went to market in Illinois with Naturally Smart branded eggs (8) sold by Dutch Farms. He tried to position his eggs between private label eggs by participating retailers’ (mainly Mariano’s and Jewel-Osco) and the main national brands, Eggland’s Best and Land-o-Lakes. Predictably, consumers didn’t connect because of two simple reasons. Eggs being one of the most basic commodities, most consumers at budget and medium retailers buy eggs in an automated way, based on the best price and without taking the time to explore new alternatives. And for taking on the national brands, TEN needed vast marketing budgets that clearly were not there. TEN’s second effort in 2016 to go to market consisted of a high-profile endorsement by comedian Steve Harvey (9). However, it turned out to be a small-scale operation in a limited number of Alabama stores. It was short-lived.
All the time, Phillips was trying to attract new capital. He used some classic tactics to try and lure investors to fill the kitty: inflate the forecasts in the business concept by making them look much more rewarding than their real potential. So he tried to position TEN as the Savior of American consumers who have become detached from the farms that feed them, building on the fear of food contaminations (10). Claiming to be the Uber of the food industry (11). TEN Media became TEN AgTech to the public eye, although its legal entity remained – TEN Media, a Delaware LLC. Phillips failed to see the obvious marketing potential of individual egg marking, a technology TEN had fully covered with global IP. Instead, he opted for a wider but highly competitive market strategy without the cover of IP: food traceability. His gamble was based on a flawed market interpretation. He caused TEN’s liquidation with losses of well over Domino’s $ 50m investment write-off, extending to its other shareholders, license holder Dutch Farms, suppliers and staff.
This didn’t stop Phillips from stepping away from TEN and now applying the same modus operandi at Ablate Biotech. Once again, a promising technology (12) with IP approved (to a business partner) and pending, a need in the market and a vulnerable partnership that is struggling with commercializing its business concept. Enter Phillips and the story is being inflated in order to attract investors and state research subsidies (13). Technology that consists of enhancing citrus plant antimicrobials uptake via prior laser etching to combat citrus greening disease (HLB) becomes a “vision that their transformational, patent protected, technology would improve the world, agricultural production and disease treatments for plants. (…) The introduction of Ablate technology into mainstream agriculture is forecast to prevent millions of tons of toxins from entering the environment, increase crop yields and mitigate the impact of many plant diseases.” Really? Forecast by whom? Prevent millions of tons of toxins? Inventor Drouillard appears to describe a more realistic concept in this PRWeb release of January 2016 (14), before Phillips had entered: “This highly efficient system can deliver antimicrobials, fungicides, pesticides, herbicides and fertilizers into plants, achieving uptake levels of 95%. (…) The system uses precise control of emitted light to remove a small amount of the cutin layer from the leaf. This process has been designed never to penetrate the surface or “skin” of the leaf, and therefore does not damage or kill the leaf. Once the cutin layer is removed, antimicrobials are injected into the plant phloem, or vascular system, which then allows the antimicrobials to circulate throughout the plant and eliminate the infection.” Very clever and highly needed technology, but Ablate’s claim that it would “prevent millions of tons of toxins from entering the environment” while the technology actually increases uptake levels of these substances takes a different meaning and can only aim to lure investors on board.
We invite you to have a critical read of Phillips’ bio (15). It makes many claims, but presents little achievements. He was a senior executive with Domino Amjet, but what did he achieve there besides his dismal track record for Domino at TEN Media? He brings government liaison experience to Ablate and is a registered US lobbyist. We searched for records of him being a registered lobbyist, but failed to find them. He claims he is the principal author and inventor of 15 pending patents and an innovator – yet his gamble caused TEN Media to fold. And on it goes.
Investor Relations is Ablate Biotech’s website section that really matters (16). “Ablate is a private company funded by private investment, research grants and partnerships.” Read: we welcome new investors. And to get interested investors drooling, Ablate Biotech claims it will roll out new technology in no less than seven other fields before May 1, 2019. We heard that before, at TEN Media aka TEN AgTech. We heard investors that were approached by Phillips talking about TEN’s wild claims of market shares of 15 to 20% of the total US egg market by 2020. We know how that story ended, and it didn’t take that long. As the French would say, l’histoire se répète.
Having milked TEN Media dry, Phillips is onto a new cow.
Sources:
(1): http://www.ablatebio.com/
(2): http://ablatebio.com/about-us/
(3): http://www.gpdtechnologies.com/home.html
(4): http://truthabouttenmedia.wordpress.com/
(5): http://optics.org/article/23236
(6): http://www.domino-printing.com/Global/en/NewsAndEvents/News/2011/DominoInvestsinTENMedia.aspx
(7): http://www.businessweekly.co.uk/news/manufacturing/15554-us-writedown-plunges-domino-loss
(8): https://www.facebook.com/NaturallySmartEggs/
(9): https://finance.yahoo.com/news/steve-harvey-takes-egg-industry-130000567.html
(10): https://www.youtube.com/watch?v=dnaHRq2LqoA
(11): http://www.foxbusiness.com/features/2016/03/03/steve-harvey-takes-on-egg-industry.html
(12): https://phys.org/news/2016-01-lasers-oranges-common-citrus-greening.html
(13): http://ablatebio.com/case-study/
(14): http://www.prweb.com/releases/2016/01/prweb13177719.htm
iled to see the obvious marketing potential of individual egg marking, a technology TEN had fully covered with global IP. Instead, he opted for a wider but highly competitive market strategy without the cover of IP: food traceability. His gamble was based on a flawed market interpretation. He caused TEN’s liquidation with losses beyond Domino’s $ 50m investment write-off, extending to its other shareholders, license holder Dutch Farms, suppliers and staff.
(HLB) becomes a “vision that their transformational, patent protected, technology would improve the world, agricultural production and disease treatments for plants. (…) The introduction of Ablate technology into mainstream agriculture is forecast to prevent millions of tons of toxins from entering the environment, increase crop yields and mitigate the impact of many plant diseases.” Really? Forecast by whom? Prevent millions of tons of toxins? Inventor Drouillard appears to describe a more realistic concept in 
We invite you to have a critical read of Phillips’ bio. It makes many claims, but presents little achievements. He was a senior executive with Domino Amjet, but what did he achieve there besides his dismal track record for Domino at TEN Media? He brings government liaison experience to Ablate and is a registered US lobbyist. We searched for records of him being a registered lobbyist, but failed to find them. He claims he is the principal author and inventor of 15 pending patents and an innovator – yet his gamble caused TEN Media to fold. And on it goes.
Investor Relations is Ablate Biotech’s website section that really matters. “Ablate is a private company funded by private investment, research grants and partnerships.” Read: we welcome new investors. And to get interested investors drooling, Ablate Biotech claims it will roll out new technology in no less than seven other fields before May 1, 2019. We heard that before, at TEN Media aka TEN AgTech. We heard investors that were approached by Phillips talking about TEN’s wild claims of market shares of 15 to 20% of the total US egg market by 2020. We know how that story ended, and it didn’t take that long. As the French would say, l’histoire se répète.
Ablate BioTech Investors Beware 