The brave new world of man­made di­a­monds

Di­a­mond Foundry is rein­vent­ing the fine-jewelry busi­ness

Inc. (USA) - - CONTENTS -

Usci­en­tists work­ing in com­puter labs NBEKNOWN TO MOST, have been grow­ing di­a­mond shards for decades. But in 2013, so­lar en­tre­pre­neur R. Martin Roscheisen de­cided to ap­ply the tech­nol­ogy to a prod­uct far more glam­orous—fine jewels. Di­a­mond Foundry, a San Fran­cisco–based com­pany with $100 mil­lion in ven­ture cap­i­tal, has taken aim at the $13 bil­lion di­a­mond in­dus­try. With 100 em­ploy­ees split be­tween its di­a­mond lab in Sil­i­con Val­ley and its de­sign stu­dio in down­town Los An­ge­les, the startup manufactured 10,000 carats’ worth of di­a­monds last year, while dou­bling its rev­enue every quar­ter. Roscheisen ex­plains how his com­pany is clean­ing up a dirty in­dus­try—while de­sign­ing some very chic jewelry. —LIZ WELCH

Re­cast your ex­per­tise

In 2010, I left Nanoso­lar, the so­lar com­pany I’d started in 2002. Our tech­nol­ogy was su­perb, but the Chi­nese beat us on pric­ing. We had amassed an in­cred­i­ble group of en­gi­neers, in­clud­ing Jeremy Scholz, who co-founded Di­a­mond Foundry with me and is our CTO. We were look­ing for our next project. I have a PhD in en­gi­neer­ing from Stan­ford, but my real pas­sion is en­trepreneur­ship. I’d been fol­low­ing the di­a­mond­grow­ing science for more than a decade. In 2012, I be­gan to study the tech­no­log­i­cal ad­vance­ments be­ing made for cre­at­ing gem­stone-size, jewelry-grade white di­a­monds. Those re­cent break­throughs meant a di­a­mond could be grown in a mat­ter of weeks in­stead of years.

Di­a­monds made bet­ter busi­ness sense than so­lar pan­els, which cost as much to pro­duce but are less prof­itable. We knew our en­gi­neers could build the plasma re­ac­tor nec­es­sary to im­ple­ment the science to grow jewelry-grade di­a­monds. And we de­cided to fo­cus on both di­a­monds and jewelry, be­cause we wanted to cre­ate an in­te­grated com­pany whose prod­uct goes di­rectly to the con­sumer. So we hired a lead­ing di­a­mond sci­en­tist, who had a 30-year ca­reer with a gov­ern­ment lab, and paired him with our en­gi­neer­ing team.

Per­fect the prod­uct

We thought the tech­nol­ogy would be the easy part, but it took three dozen en­gi­neers, three years, and tens of thou­sands of plasma-re­ac­tor de­sign sim­u­la­tions to get it right. We in­vested tens of mil­lions of dol­lars be­fore we pro­duced one di­a­mond.

It was worth it. Our plasma re­ac­tor is our se­cret weapon. It pro­duces a di­a­mond like mined di­a­monds, made of the same crys­tal. Our tech­nol­ogy is based on a vari­ant of chem­i­cal va­por de­po­si­tion, which builds the di­a­mond lat­tice atom by atom in a re­ac­tor that cre­ates a plasma akin to the outer core of the sun.

The re­ac­tor, com­posed of 350 parts, is based on tens of thou­sands of sim­u­la­tions. Each sim­u­la­tion took nearly a week to per­form. The re­ac­tor is very com­plex, and be­ing off by even the tini­est amount can lead to a melt­down.

Clean up a cat­e­gory

The di­a­mond in­dus­try is dom­i­nated by very prof­itable houses like Cartier, the jew­eler to the kings for cen­turies. We wanted to build a new Cartier for peo­ple who care about trans­parency.

More than half of the di­a­monds on the mar­ket to­day come from con­flict re­gions, like the Congo and Sierra Leone. That re­al­ity hasn’t changed that much since the movie Blood Di­a­mond came out, in 2006. The film re­vealed a vi­o­lent in­dus­try that uses both slave and child la­bor to mine and pol­ish the di­a­monds. It also por­trayed the dev­as­tat­ing en­vi­ron­men­tal im­pact that di­a­mond min­ing has. As a re­sult, peo­ple started think­ing about the prove­nance of their di­a­monds and wanted to be as­sured that no one, or the earth, was get­ting hurt in the process of min­ing them.

Con­flict-free di­a­monds are highly sought af­ter, but it’s dif­fi­cult to prove where any mined di­a­monds come from, be­cause they can go through two dozen own­ers be­tween the mine and the con­sumer. So a di­a­mond is mined some­where in Africa and traded sev­eral times be­fore it makes it to one of the ex­changes. From there, it might get traded a few more times be­fore it makes it to In­dia for pol­ish­ing. The pol­ished stone gets sent back to the whole­sale di­a­mond ex­changes, and by then that di­a­mond is vir­tu­ally un­trace­able.

Mean­while, we can make a di­a­mond in two to three weeks in our lab. We’re cre­at­ing a new mar­ket of buy­ers who would not buy a di­a­mond un­less it was gen­uinely eth­i­cal. Mil­len­ni­als are our main buy­ers. We’re sell­ing a prod­uct based on val­ues, which is what they’re at­tracted to. —

Find your es­sen­tial part­ner Once we per­fected the tech­nol­ogy, we needed to start de­sign­ing and sell­ing jewelry, so we be­gan col­lab­o­rat­ing with de­sign­ers and sold those items on our web­site. But we quickly saw the ad­van­tage of an in-house jewelry-de­sign team. We met Vanessa Stofen­macher in late 2016, and quickly ac­quired Vrai & Oro, her L.A.-based com­pany. It was a fast-grow­ing com­pany with great trac­tion on so­cial me­dia.

She joined us and brought her team of 20.

We charge roughly the same for our di­a­monds as what mined di­a­monds cost. Di­a­mond prices go up and down, and cost more or less de­pends on size, cut, and clar­ity. A 2.15-carat rose-cut di­a­mond on our web­site costs $15,000, whereas a 1.2-carat round cut costs $3,300. We sell each batch as quickly as we make it.

Our goal is to grow big­ger di­a­monds and of­fer them at slightly be­low-mar­ket prices. Our di­a­monds grow about a mil­lime­ter a month. Mak­ing a big­ger di­a­mond is hard—it might crack as it grows, and you need more ma­te­rial to start it and a larger re­ac­tor. Now we can grow a 15-carat di­a­mond, com­pared with the three-carat we launched with.

Counter crit­ics with cus­tomer ex­pe­ri­ence

When con­sumers are skep­ti­cal, we tackle it through ed­u­ca­tion. If you ask peo­ple ab­stractly whether they would buy a syn­thetic di­a­mond, they tend to be dis­in­clined. But that’s like ask­ing con­sumers in 1990 whether they would buy an elec­tric car, at a time when the only elec­tric cars in ex­is­tence were golf carts. When peo­ple see our di­a­monds in a store and un­der­stand their cul­ti­va­tion, there is zero re­sis­tance. We lose vir­tu­ally no cus­tomers once peo­ple are ed­u­cated. Cul­ti­vated di­a­monds are sim­ply a bet­ter prod­uct all around. It’s like organic food—it’s bet­ter.

Pho­tographs by IAN ALLEN

• MIN­ING THEIR OWN BUSI­NESS R. Martin Roscheisen, CEO, and Jeremy Scholz, CTO, the co-founders of Di­a­mond Foundry.

• FROM GEEK TO GLAM This Di­a­mond Foundry col­lab­o­ra­tion with Bar­neys and de­signer Nak Arm­strong re­tails for nearly $5,000.

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