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Only a small group of suppliers can provide the components Timothy Childs needs for his work. Weather-monitoring stations transmit data back to him at his headquarters, and a slight increase in temperature will send teams scrambling to compensate for the change. Cameras and infrared sensors monitor crucial chemical changes. His machines break down polyphenol molecules, creating new compounds. Another process creates the final form: a delicate triple-packed polymorphic triglyceride crystalline structure that lets Childs know his mission succeeded. The result of all this work? Chocolate.

People began enjoying cacao as early as 1100 BC, but it wasn’t until the Industrial Revolution that chocolate in its modern form became possible. The way Childs sees it, today’s chocolate is as complicated as rocket science. And he should know. A former software developer for NASA’s space shuttle program, he is the co-founder of TCHO, one of just a dozen US companies that produces chocolate (Hershey and Nestlé are among its fellow manufacturers). Many more companies—like Godiva, for example—are actually chocolatiers and confectioners that sell chocolate products, but don’t make their own.

“Chocolate is by far the most complex process and system that I’ve ever known… and at the core, I’m obsessed with complex systems,” Childs says.

In 2003, Childs faced a tough decision: keep his “easy gig” with NASA or join a colleague leaving the tech sector to start chocolatier Cabaret Chocolate. No stranger to entrepreneurship, he had been involved with several computer graphics and internet startups. But chocolate was a new world. And the more he studied it, the more intrigued he became. He was torn until a dramatic event helped him make up his mind.

“The week I was deciding what I was going to do was the week the space shuttle blew up,” he says, referring to the 2003 Columbia space shuttle disaster. “It was really weird and sad, but then I said, ‘It’s clear I’m doing this now.’”

The technical nature of making chocolate confections seduced Childs. But Cabaret didn’t manufacture it, and he was soon obsessed with making it himself. So, in 2005, he asked chocolate veteran Karl Bittong to help him launch TCHO. The first investor, Wired magazine founder Louis Rossetto, eventually became CEO. As the company’s name suggests (“T” is for technology, and “CHO” is for chocolate), the tech-minded leaders found a way to blend advanced technology and chocolate.

“We’re at a fascinating time in the chocolate business,” says Childs, who looked at every step in the production process to see if he could do it in a revolutionary way. “It’s right on the cusp of exploding. It’s very akin to what happened with the California wine market about 30 years ago, when some upstart maverick wine maker said, ‘Let’s make French wine.’ They backwards engineered it, got some agronomists, and poof! That’s in essence what’s going on here.”

Like a tech startup, TCHO released a beta version of its product. In December 2007, 4,000 people tasted it and provided feedback the company incorporated into the “version 1.0” chocolate released in December 2008. Future betas will produce version 2.0 and beyond.

Business has grown since that first beta test. The bars are now in 300 stores nationwide, including Zabar’s and Whole Foods. The professional line, TCHO Pro, is in Chez Panisse, The Claremont Hotel and other luxury restaurants and resorts. The newest offering is private-label manufacturing, which enables food service companies, confectioners, hotels and retailers such as Trader Joe’s to buy TCHO-blended chocolate to sell under their own brand.

Increasing efficiency rather than speeding up production only to burn out too fast is another lesson Childs learned from his tech ventures. The factory, which visitors are welcome to tour, can produce a maximum of 3,000 metric tons a year. But the company hasn’t even hit the halfway mark for using that capacity—and isn’t going to any time soon.

“We’ve had heads of research and development from Kraft, Post, competitors and big chocolate companies come through here and ask ‘What are these guys at TCHO doing?’” Childs says. “Somehow word has gotten out that we’ve got this innovation engine going. It’s just really simple: We’re never afraid to try something new.”

Childs is involved in TCHO’s chocolate-making process from the moment the alien-looking cacao pod leaves the tree to the second the finished bar hits stores. The first steps of production happen in Peru, Ecuador, Ghana and Madagascar, where beans are grown, fermented in large wooden boxes and transformed into “cacao mass” that’s shipped to the San Francisco factory for further processing. To train farmers to produce beans for TCHO’s specific flavors, the company sets up portable “flavor” labs in the cacao-growing countries that simulate the production process that takes place in the factory so growers can make small batches. The lab consists of a “customized Ronco turkey roaster” and small temperature control units that oversee the equipment that heats the curry grinders.

Because they are specially trained to grow and ferment high-quality beans, these farmers can charge TCHO more. Higher prices are worth it to Childs: They not only improve farmers’ lives in a business tainted by unfair trade, but they also prevent the growers from producing off-flavor beans that take time and money to fix.

Childs’ experience with “scrappy” startups taught him when to spend and when to save. He shells out top dollar on the raw materials that define the business—in TCHO’s case, good beans—but economizes on equipment. TCHO refurbished decades-old factory equipment from Germany, and Childs talks about using hair dryers and “$40 Walgreens heaters” in the lab.

Since the first part of the process happens far away from San Francisco, Childs set up monitoring equipment that puts real-time data on weather and fermentation temperatures online. Growing partners then determine flavor notes and enter them into a database. Based on weather or flavor performance, Childs can tell if a box of beans should be ventilated, moved or covered. Once the bean samples arrive in San Francisco, they go through a large-scale version of the same steps replicated at the off-site flavor labs. The shiny silver machines in the factory melt, mix, refine and mold ingredients into organic dark chocolate.

Childs can control the equipment in the San Francisco flavor lab with a custom-made iPhone application (created with the help of tech partners FX/PAL) that shows him video and production data like temperature and processing speed. He will soon be able to peek into the machines through an augmented-reality duplication application of the factory. The smallest fluctuations can change the chocolate, and this technology helps him keep tight control over several batches at once from anywhere in the world.

Childs’ modern approach to the ancient art of chocolate is his way of “re-examining old problems with new perspectives,” which Childs believes is the key to success in any field. As he says, “By the time I’m done… I want us to have innovated every area of chocolate.”

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