Why It's Disruptive
Diamonds aren't really rare. They're just hard to get to--buried deep underground, generally in parts of the world that lack strong governments. Getting them to an American jewelry store often involves destructive pit mining, slave or child labor, violent militias, and a long chain of middlemen that makes it hard to connect any of those undesirable inputs to the end product. But diamonds can also be grown. For decades, they've been synthesized for use in electronics.
In 2010, Martin Roscheisen, founder of solar energy company Nanosolar, decided to upend the $13 billion diamond industry by finding a way to produce jewelry-quality white diamonds in the lab. Jeff Skoll, Mark Pincus, Evan Williams, and Leonardo DiCaprio were a few of the investors who agreed to back him. Engineering the technology to grow them big enough and pure enough required three years and tens of millions of dollars in investment. The result was a plasma reactor as hot as the sun in which carbon atoms form into crystal lattices indistinguishable from natural diamonds. The company also has a studio in Los Angeles where it makes finished jewelry, allowing it to sell directly to consumers. After coming out of stealth mode in late 2015, Roscheisen says, Diamond Foundry doubled its business every quarter in 2016 and tripled it in the fourth quarter. In response, it quadrupled its production capacity at the start of 2017.
Diamond Foundry isn't the only company growing gems in a lab. Silicon Valley-based Ada Diamonds is one competitor. Both companies face the same challenge: They must convince luxury consumers that "cultivated" isn't a fancy word for "fake." Finding a better way to source diamonds makes a world of sense, but fine gemstones are an inherently irrational purchase. Reactor-grown diamonds aren't cubic zirconia, but some authenticity-obsessed buyers will see them that way. --Jeff Bercovici