Decarbonizing waste with insects

Very enjoyable chat with Olympia Yarger, CEO of Goterra a company using insects for sustainable waste management. We discussed the amazing merging of insect and technology that allows the decentraliztion of waste management across cities, why finding under serviced customers is key to early adoption,  how important it is for startups to build vertically integrated supply chains, how insects are going to be an essential part of the future food supply, how growing up around farming influences your perspective and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: Could you tell us a little bit about Goterra?

YARGER: Goterra started as an attempt to create a sustainable agricultural enterprise with free range chickens. I was looking to reduce the cost of chicken feed and so looked at insects as chicken feed. And then I realized that insects on their own were quite an enterprise. They need all your attention, oddly enough, and so I ended up working mostly with insects. My thinking changed to asking how we could leverage this unique animal to disrupt the supply chain problem. Because even if we feed animals insects you still need to build a big intake farm and you’ve just replicaed the same problem we have with industrial farming, which is the supply and transport logistics of moving feed around. So I came up with the idea of creating farms that could be colocated with where the waste was created, or at the very least decentralized to reduce the transportation and logistics challenge. And suddenly I realized I was now in the waste management business. So that’s what we do. We build modular infrastructure that houses and manages insects while they consume waste. And we sell back the byproducts back to agriculture or as pet food.

MCWALTER: Where are the modules located? Would they sit next to a restaurant?

YARGER: it’s a volume game. Our standard modular units handle five tons of waster per day. That means that to colocate the unit, you would want a high volume of waste being created. Waste by and large is measured by the number of bin lifts per kilometer.  So if you can put the food waste management facility really close by you reduce the bin lifts per kilometer and you’ve actually solved the problem. So we can put our units next to transit stations which means the truck is driving a smaller route and still lifting the same amount of bins and you’ve reduced that kilometer per lift amount.

MCWALTER: What was Goterra’s first MVP like?

YARGER: So many iterations! The first small scale was finding maggots in my compost bin and trying to get them to live inside a plastic tent. We look back now and we’re like, how rudimentary and how silly, but early evolutions are going to feel like that right? But then you immediately go into trying to improve that. And so, it’s been an ongoing iteration of things. We are at version three of the actual unit now.

MCWALTER: Who were your early customers?

YARGER: They were all businesses that were focusing or interested in being participatory with sustainable practice as part of their core mission. There was a government program that businesses could sign up for to help manage and reduce their electricity consumption and other sorts of sustainably driven efforts. That was where we found our early adopters.

MCWALTER: What was the reaction of those early adopters to using insects for waste management?

YARGER: It’s funny, right? Australians, hate flies as part of our culture. Everybody doesn’t like flies, that’s true. But Australians can actually sing the words to a fly spray advertisement, that’s the level of dislike we have for flies. So you would expect a fairly strong cultural bias against anything that involves a fly or maggot. But because we started with really willing clients, they were just fascinated by what we could do and most of them were motivated by the fact that other composting opportunities either didn’t service clients as small as them. And so that sustainability focus and the fact no one else was solving the problem of small scale waste management were the two motivators for our early users.

MCWALTER: The actual units themselves, can you see into them?

YARGER: It is a beautiful blue box that nobody gets to see inside. Which is kind of a hard thing to do as a founder. You battle with your own imposter syndrome anyway, but it is especially difficult to build something so cool and then be like so this is a really cool box, but you cannot see inside it! I think that actually makes sense though because people don’t really want to know how their waste is managed. They’re not really interested though on occasion we do get requests for viewing windows as some people want to watch the maggots do their eating! Maybe that’s a cool plugin we can add as a feature later on.

MCWALTER: What is the main advantage compared to traditional composting?

YARGER: Definitely speed – our food waste is consumed daily. The second part is the agility as you cannot make a traditional composting facility smaller than it is. And it generally has be located on a large piece of arable land which means it’s always going to be out of town. You can’t put a composting facility in the middle of Sydney. While we can handle waste in smaller amounts which allows us to decentralize the management capability.

MCWALTER: What are your thoughts on vertically integrating your own supply chain? 

YARGER: When you are trying to actually change something and you are building a new industry, I think you have to spend a bit more time building up and  downstream of your supply chain to be effective. You can’t just insert yourself in the middle of an existing supply chain easily as you are too small to be competitive. It doesn’t work that way. By integrating and understanding more about where you fit both up and down stream I think you do a better job at knowing where you belong and being able to deliver value well. Secondly, to that you aren’t going to be big enough to enter the existing supply chains exists meaningfully. And so you do have to carve yourself a space with others that feel similar about where you’re headed, but are smaller and more accommodating. 

MCWALTER: What is your primary business model?

YARGER: We use a fee for service waste management model. So you pay to use our technology by volume. So every kilo that you’re putting in is going to cost some money. 

MCWALTER: What are your plans for future expansion? 

YARGER: Bigger, better, faster, stronger! It’s a really interesting stage where you really have to think about what fast means. As a founder I didn’t expect to have to renegotiate constantly how fast we should be going. How fast is the right kind of fast? So I’m purposefully and forcefully thinking about it. We’re going to move strategically and we’re going to move purposefully, which will feel fast some days and not others. But what that means in real terms and not just in startup speak is will be expanding into New South Wales and we’ll be moving into Queensland by the end of this year, and then we expect to sort of continue that emergence into the other Australian states over the course of next year. I expect to be international by the end of next year, and we will continue to grow by region moving forward. Exciting!

MCWALTER: Is there a role to play for Goterra in terms of decarbonization?

YARGER: The very act of how insects manage food waste reduces the amount of methane gas and co2 emissions. I think there’s opportunities for both direct  reduction but also to leverage those reductions for offsets, particularly for manufacturing operations who are struggling to deliver reductions in their own enterprise for example in aviation. If we manage all the waste at an airport, can we deliver an interesting percentage of carbon offset against what is happening as planes operate out of that airport? 

There’s also carbon sequestering to return nutrients and carbon back to the soil and and track carbon through the growing of plants and trees and things like that. What I really want to focus on moving forward is how we can actually understand this more completely. Like, what does one of our units actually deliver in CO2 reduction.

MCWALTER: How do you think about balancing scaling and learning as you grow?

YARGER: Some of the best things we tried to bring with us on this journey is understanding that there were clients who nobody else would service. And because nobody else would service them we had to build a business model from scratch. And if you go too quick you may lose those insights. And miss out on opportunities to grow your business in a way that actually is so much more meaningful and delivers a much higher return.

MCWALTER: What are your thoughts on insects as a protein source? 

YARGER: When I look at Australia, we’re sort of this canary in the coal mine on the climate story, right? We don’t have a good climate or regularity with water and the droughts are getting longer and closer together. And it’s hotter. No agriculture can survive at over 45 degrees (110 F) outside doesn’t matter if it’s a plant or an animal. So indoor agriculture is going to have to be examined and looked at because it doesn’t matter what kind of regenerative agriculture you’re doing. If it’s 45 degrees outside, stuff’s gonna die, or at least lose productivity.  So I think insects have a really unique opportunity because we can grow large quantities of protein in very, very small areas. And we can do it inside. 

Translating Agtech

Really great conversation with Sarah Nolet, founder of both the agtech focused VC firm Tenacious Ventures and AgThentic an agtech strategy and advisory firm, as well as the host of the “AgTech…So What?” podcast. We discussed the how agtech in the US and Australia differ, the importance of a translating values and points of view between tech entrepreneurs and farmers, why we need measurement and verification in regenerative agriculture, the importance of getting the business model right in complex supply chains like agriculture, what the most promising technologies are in agtech and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: Could you tell us a little bit about AgThentic?

NOLET:  We are a strategy and advisory firm working at the intersection of technology and agriculture. The reason for being is we want to help more innovators have an impact in food and agriculture. And we know that technology alone isn’t enough, because we’ve seen too many technologies be developed and pushed into the industry, because they’re exciting, cool technologies, but unfortunately, maybe no one wants them or they don’t solve a real problem. So we bridge the gap between these new technologies and the business models that can help their adoption and ultimate impact. We do that in a range of ways from working on projects and in an advisory capacity with different clients.

MCWALTER: Are entrepreneurs selling into the ag sector not talking to people enough?

NOLET:  There’s that classic issue of customer discovery. People don’t know what farmers actually need or want. It can be really tough to bridge that gap. So you’ve got people in cities who have ideas for technologies and new businesses, but maybe they didn’t grow up on a farm or they haven’t spent a lot of time on farms. So while their idea seems good, when they’re having a latte in a city, it doesn’t actually stack up when you’re on the farm or somewhere in the supply chain. I don’t know if you’ve ever tried to call a farmer and say, “Hey, can I come talk to you about your problems”, but you know, they’re busy. And they speak a different language about farming, not about tech. And so it’s not easy to overcome some of those barriers.

MCWALTER: I grew up on a farm in Ireland and talking to farmers can definitely need a bit of translation…

NOLET:  Yeah, it’s a totally different language. If tech people go deep on tech stuff, and farmers go deep on farming stuff, neither is actually understanding the other.

MCWALTER: How does your background help you bridge that communication gap?

NOLET:  I guess my background’s kind of in this translator role, and I’ve done it in a few different areas. But specifically, so I grew up in Silicon Valley in California, nothing to do with farming. We had a bit of a hobby farm in my teens that I spent time on, very much not a commercial farm. I always say that we grew rocks and squirrels because there’s nothing commercial there. But it instilled in me a passion for the environment and for those kinds of communities and that kind of lifestyle, but I was very much told and followed the advice of first go off and make money, and later do something that’s good for the world.  So I listened to that advice for a bit and ended up working in the defense industry and have degrees in computer science and systems engineering.

I realized that I liked technology but also started to plan a bit of a translator role. I was working with deep technical people on new radar systems and remote sensing systems, but translating it back to what users actually needed. How do we build systems that use this technology to solve real problems and communicate that wel? But it just wasn’t cutting it for me in the defense industry and I wanted to do something that I was more passionate about. I spent a bunch of time on farms in South America, it was initially a holiday that turned into more like an accidental gap year. And that really connected all the dots for me and was why I became so excited about agriculture and ultimately brought the technical background and translator capabilities into this sector working across farmers and entrepreneurs and∑ investors in agriculture.

MCWALTER: And then you moved to Australia?

NOLET:  We moved here about five years ago for my partner David’s job. I got really lucky in that Australian agriculture is as powerful and high potential as it is. At the time, Australia didn’t have much in the way of an agtech startup ecosystem. And so it was an opportunity for someone like myself, who had been doing that kind of work in the states to help build the ecosystem here and bring a lot of those best practices to Australia. 

MCWALTER: How do the US and Australian agtech sectors differ?

NOLET:  The US is just much bigger. And so there’s more capital and culturally starting a startup is more part of the cultural norm than it is in a place like Australia. In ag-tech five years ago Australia didn’t have much. But nowadays, any startup solving a problem along the value chain in the US means there’s going to be startups doing the same thing here in Australia. So we have quite a vibrant ecosystem here now, but it is smaller. We also have some nuances here, there’s farming systems like mixed farming and extensive pastoral systems in the Northern Territory that doesn’t exist in the US. Agriculture here also isn’t as subsidized so there’s different dynamics here. But a lot of the innovations are, definitely spanning that breadth and definitely the same quality as you’re seeing in the US as that ecosystem has grown in the last three to five years.

MCWALTER: How are farmers adapting to new technologies?

NOLET:  When you think of innovation, if it’s hacking away at a terminal writing software, then there’s some farmers that do that, but a very small minority. If it’s innovation in farming systems and in business decisions, then farmers are incredibly innovative. They are truly pushing the envelope in innovation as much or more than the tech entrepreneurs coming into this space, because they’ve been living and breathing it and seeing the challenges for decades.

Also, agriculture is super broad. Are we talking about specialty crops and perennial systems? Are we talking about irrigation or are we talking about really extensive systems where you’re using helicopters to manager cattle or are we talking about intensive indoor horticulture systems in greenhouses? So entrepreneurs need to get out and spend time with farmers. Though, many of the entrepreneurs we work with are increasingly coming with some kind of Ag background, maybe they grew up on a farm or worked in an agronomy role. And so it’s not just people from the outside coming in. And in fact, in many cases, it’s farmers themselves who are solving their own problem and then thinking about how to scale those businesses. 

MCWALTER: The traditional tech startup has very rapid iteration whereas with a farm you might be talking 12 months before you can iterate. How can agtech iterate rapidly when dealing with that timeline mismatch?

NOLET:  It’s a real challenge and actually was some of my early interest in this space. Because when we look at innovation programs, like accelerators and incubators, they expect you to come in and three months later, you launch an MVP and raise money. Well, in agtech, if those three months didn’t coincide with planting and harvesting maybe you didn’t try anything at all in those three months, and so does that really work to support innovation? That said, there are lots of ways to get feedback on your product and to work early and frequently with users, whether that’s trialing in different geographies, whether that’s getting feedback on versions of the product that aren’t the actual product. Or get trials in a field and see what happens over a 6,9,18 month period, then it’s much more about managing and communicating those expectations. The worst outcome is when you over promise and under deliver, whether that’s to a grower or to an investor and so if it needs to take that long, then you should build your business plan and runway and milestones around that need and manage risk as much as possible. But if it needs to take that long, it needs to take that long and there’s no use hiding it because you are working with a natural system and some investors will get that and others might not. But they’re probably not going to be a fit for you anyways

MCWALTER: What about the large agri businesses, how do they interact with new agtech players? 

NOLET:  One of the big challenges for entrepreneurs is how do you get your product to farmers. So you might meet your first couple customers at conferences or on Twitter or on podcasts because they’re out, actively searching for and engaging on the tech side. But after your first dozen or a couple dozen, where do you find the rest and often you’re going to need to go through some kind of channel. So there’s a big role for the existing agribusinesses to play by being that distribution channel to farmers. And it’s really interesting now that we see the business model of those players starting to shift whether it’s more to biological inputs than chemical or more to digital offerings instead of hardware. There’s lots of room for growth and innovation in that space. And that’s where we see a lot of corporates really focused.

MCWALTER: Is there an issue with a lack of connection between consumers and farmers? 

NOLET:  Yes though technologies and increased access between the consumer and the farmer are really starting to shift those dynamics. One example would be carbon. There are lots of people looking at carbon markets and carbon sequestration through farming practices, and big companies are paying real money to offset their carbon footprint and offer these things to their consumers. And farmers can play a role in that soil carbon sequestration is one of the cheapest methods to pull carbon out of the atmosphere. And so you get this really interesting connection between a consumer who says I want to buy this product and I want to know that it wasn’t harming the environment. And increasingly, I want to be able to recognize the farmer who made that possible and ideally reward them, whether it’s through a premium or some kind of other mechanisms, like a carbon market, or offset or a label on the product. We’re seeing tons of innovation in this space that goes well beyond the old questions of whether a product is organic or not.

MCWALTER: What are your thoughts on regenerative agriculture?

NOLET:  We’re doing a series right now on our podcast on regenerative agriculture, and it’s been fascinating to understand how controversial and polarizing that term can be. And it’s for exactly that reason, whereas some people have used regenerative agriculture to say, you’re a good farmer, and if you’re not doing this, then you’re a bad farmer. But that is overly simplified and the farming practices that are good in one area might not be the farmer practices that are good in another area. And yet you still have the challenge of giving consumers something where they can make a snap judgment and buy the carton of eggs and not have to understand 17 things about how eggs are produced. So it’s really quite a complex issue. But I worry a little bit about oversimplifying from a marketing perspective, without that underpinning of truth and so the key for me is in how do we validate and verify things like carbon sequestration. 

MCWALTER: And are there particular business models in the space that generally work better than others?

NOLET:  The two things we coach and emphasize and look for is how do you acquire customers? How do you create a kind of acquisition loop? And then how do you retain customers? What is your retention loop? And how do you make your business model such that those are reinforcing loops that grow over time? And obviously, that’s how you can get to high growth and to sustainable growth is through thinking about how you’re creating and capturing value in both the acquisition process and the retention process. So no different probably than any other industry, in terms of the fundamentals of business models, but definitely some nuances around as we said before distribution and channels and supply chain and natural systems and timelines.

MCWALTER: What are your views on the more advanced type of agtech technologies such as cellular meat or vertical foods and their impact on decarbonization?

NOLET:  It’s a question worth millions, if not billions of dollars. My view is probably that we’ll see a food system that has many different kinds of production. And that will include cellular agriculture and fermented products, it will include indoor farming and outdoor farming. So we’ll see hybrid systems and increasingly mixed types of production increases, because again, the challenges that we face are really large and we need all kinds of systems to solve them. In particular, we look at it through an investment lens. When you say, do we want to see this change in the world from an impact perspective versus would I invest in that as a business? Those can be different answers.

We also talk about, replacing certain types of agricultural production for example animal farming. But there’s lots of good research that animals used as part of a rotational grazing system can sequester carbon in the soil. And so do we want to replace those animals with cellular systems and lose those decarbonization advantages? Where I end up on these issues is there’s no one answer and it’s much more about creating a food system that has diversity and resilience and different business models and different forms of production. And the only way we’re going to do that is through more innovation and technology and investment because otherwise those new systems won’t be as efficient and have the decarbonizing potential that they could. We definitely need more super smart people and capital thinking about these problems, but there isn’t likely to be one answer.

Scaling Grid Storage with Batteries

Excellent conversation with Nick Kitchin, CEO of Cumulus Energy Storage, developers of scalable, low cost batteries for the electrical grid. We discussed the pros and cons of copper/zinc batteries and why they are the best solution for long term grid energy storage, the importance of supply chain considerations when scaling energy products, why microgrids are such a massive opportunity, why Sheffield is an amazing place to build a company focused on advanced manufacturing and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: Could you tell us a little bit about Cumulus.

KITCHIN: Cumulus is designed to help electricity get to where it needs to get to at the right time. It means developing grid scale energy storage, basically big batteries. We are based in Sheffield in the north of England, and my two co founders, Darren and Mike, are based over in the Bay Area.

MCWALTER: In terms of the founding team, did the technology and idea come first, or did you have an existing relationship with your co founders, and this was an idea that you cooked up together?

KITCHIN: The Cumulus story really starts in March 2012 at a wind energy conference. Us founders had some Friday night discussions about how we could work together and if so, what would we do? And we very quickly honed in on energy storage as the key disruptive technology that we could put into the offshore wind industry. And so we started a conversation about big batteries in particular using rechargeable copper/zinc as the best chemistry. It wasn’t really about the battery chemistries specifically, it was more about the opportunity that we saw seven years or so ago and what could we do that was different from everybody else? And where were the openings in the marketplace?

MCWALTER: What did the early users look like? 

KITCHIN: We initially looked at two industrious, one is the water industry and the other is mining. We realised that if we could put a membrane in between the copper and the zinc discs in the copper zinc battery, we could then make rechargeable batteries at the right kind of scale. And because copper/zinc is a 200 year old battery technology there is a certain amount of de-risking by using tried and tested chemistries which sped up our development program.

From an industry like mining’s perspective they’ve currently have high carbon solutions powering their equipment on site. If you can then replace that with a low carbon solution, for example solar plus our long duration storage batteries you can change power sources and decarbonize.

MCWALTER: What are the advantages and disadvantages of copper/zinc versus lithium ion batteries?

KITCHIN: Overall, lithium is really good at the high power, short duration, high energy density applications like in your mobile phone. Copper/zinc is really, really good at the high energy, long duration applications where the energy density is less important.  There are several large scale lithium ion long duration implementations, particularly in South Australia. But the number of cells involved in creating a product like that is absolutely huge. Whereas our solution is working towards the point where we’ve got containerized production and our own gigafactories and that is a much lower cost and much greener solution compared to lithium. There will always be a range of technologies. Each technology has its own benefits and specific place in the overall energy storage market.

MCWALTER: What does the supply chain look like for copper/zinc batteries? 

KITCHIN: For copper/zinc, we have a really simple supply chain. The world produces a lot of copper and zinc and so we don’t have the same supply chain issues that the rare earths have like cobalt or lithium. Not that I’m saying lithium is constrained. But cobalt certainly has its own issues, and the rare earths associated with some of the applications as well. So copper/zinc, is very green in the sense that it’s 99.5% recyclable; literally everything we use can be recycled apart from the membrane. And so we will have an end of life value, unlike lithium. In other words, we’ll be paid to do the recycling rather than having to pay to do recycling. Together there are a whole series of different things that we thought about and designed into our system to make it a very low cost, great application.

MCWALTER: What are the pros and cons of funding from private sources versus government grants?

KITCHIN: When you are taking government grants the positive is that the government is showing private investors that there is a real market here as they are willing to put taxpayer money into it. The downside, of course is it takes a long time to prepare the applications and then it takes an even longer time to actually get that through approval and finally get the grant awarded. So first, the dust the ground bit on the finance side of things. business angels, family offices, VCs, and then moving on to funds and all the rest of it. It’s relatively simple to get the first few rounds of finance, but when you’re approaching commercialization, you’re looking for between 2-10m GBP, and you’ve got to get to the point where you’ve got you to move from pre-revenue to post revenue. That’s the difficult part of the overall fundraise but once you’ve done that, then you’re in a really good territory. 

MCWALTER: Thinking back over the last few years would you have done anything differently? 

KITCHIN: Essentially, something like this does take time to develop, you can’t get away from it. It’s not like doing a software app. You do have to build it up into a design, build, test structure and go around that cycle on a regular basis. It just literally takes time. So I don’t think there’s a significant shortcut that we could have gone through to get to where we are today. The technology development has been pretty good, to be honest, and having a foot in both the UK and the US, particularly in California has helped a lot. With the R&D facility over there we have been able to get hold of the right people very, very quickly and have a very flexible team.

MCWALTER: How do you think about recruiting talented people?

KITCHIN: Well, the first thing I would say is it is literally about getting the right people to do the right right job. We’re looking for team players, obviously, and we’re looking for people that can push the founders and challenge the founders and help us move along a bit. The majority of people that we’ve recruited are to date have been people with degrees or masters and a few PhDs. That’s the kind of level of people that we’ve needed for our development team. And when we get to full production, we’ll be extending that out significantly creating a lot of employment across the spectrum. We’d really like to re-employ a lot of people from the automotive industry which is currently going through huge changes. We can re employ those people and employ them in the energy storage assembly plants. That’s a key part of our strategic outlook. 

MCWALTER: What are your views on the decarbonization pledges of large enterprises? 

KITCHIN: I think if you break it down into the departmental case one big example is data centers. In the data center market you have the likes of Amazon, Microsoft and with the total electricity consumption of the data centers themselves, those firms are in a position to actually drive that to be more efficient. The flexibility that comes with the right kinds of energy storage, from a site management point of view means there’s a really good fit.

MCWALTER: What are the biggest cleantech opportunities for entrepreneurs? 

KITCHIN: If you look at where we’ve got significant numbers of people, in excess of a billion people right now with no electricity, for example Africa with 600 million people and India with 300 million people. There is the chance to say, just like with the telephone system where these countries skipped landlines and went straight to mobile. So the same thing can happen with energy in these countries via microgrids that do not need great long transmission systems. Rather there can be a series of micro grids with locally produced and delivered energy from a combination of renewable generation, probably solar plus storage. There’s a huge opportunity.  Similarly in India, where you’ve got remote regions dependent on diesel generators, you can replace those with solar plus storage and create micro grids. It’s amazing. And I’ll be honest with you, I don’t believe anybody has yet really fully clocked just how big this energy storage market is going to be as these areas open up to clean energy.

MCWALTER: What are the advantages of working in Sheffield, UK? 

KITCHIN: We have Sheffield University, that is a really big one. We’ve got the advanced manufacturing research center (AMRC). You have Boeing and Rolls Royce and a wide range of cleantech businesses. Because we are colocated and all working on advanced manufacturing, you’ve got this support network, and synergistic conversations you can have with all sorts of different people at different times. It’s a really, really good network and you can get apprentices, you can get design work done, you can get manufacturing done, it’s just all there. It’s great. 

MCWALTER: A Lot of regions or cities are trying to recreate Silicon Valley, should they rather select specific industries to focus on where they can really shine? 

KITCHIN: Absolutely. AMRC has the advanced manufacturing focus itself as it was built on a former coal mining area. So we’ve got disused coal mines, we’ve got heat, and distributed networks which make it easy to focus on advanced manufacturing rather than consumer software apps. So yeah, I agree with you. California has got its own characteristics, different towns have other advantages for example Leicester and textiles. They’re all different. So let each place build to their own strengths. 

A Circular Cup Economy

Such a fun conversation with Safia Qureshi, CEO and founder of CupClub, a maker of reusable packaging being used by major NextGen consortium brands like Starbucks. We discussed the future of materials, the circular economy, how Safia’s background in architecture and design influenced her approach, the importance of research and user testing, why transparency is so important when it comes to sustainability, the importance of London towards the development of cutting edge design and more!’

Here is the audio. The excerpts below are lightly edited:

MCWALTER: Can you tell us a little bit about CupClub?

QURESHI: CupClub I founded in 2015. It started with me wanting to consume food and beverages on the go without having to use any form of single use packaging. So I was very passionate about building a more sustainable way to distribute food and beverages and I thought there needs to be a better way than what we’re currently doing. And so I started with the drinks industry because it’s by far one of the highest volume in consumption of single use packaging.

MCWALTER: During the early days what research did you engage in?

QURESHI: We put together research across the whole user experience, starting from the consumer and understanding the landscape of the issue. So how big is this market? Why do people currently use what they use and would they prefer something better? I’ve always been a big believer in empathy when it comes to designing and thinking through all the various stakeholders that are going to be a part of this user journey. There is the end user but then also the retailer. For example observing, why do baristas love single use cups? What are the things that are so fantastic about it operationally? It is really important not to ignore those points. And if you want to try and swap out for new cups, the level of optimization required simply because of the speed with which things move really has to be thought through. So empathetically looking at baristas, people who are serving in fast food, retail, understanding order times and fraction of seconds, things like that and then moving through the whole landscape map. 

Also we observed, waste companies, if something like CupClub was to come around, what would be their reaction? So there’s a lot of consideration to be made and of course if I’m an architect by training so I’m very well versed with working with people who don’t want to be in the same room quite usually, planners, engineers etc. Everyone’s trying to make sure that their form of the vision is accepted and implemented and so everyone’s coming at this with their own vested interests and usually the architect is trying to balance all the voices in the room. Because our ultimate aim is to design for well being. 

MCWALTER: In terms of getting that understanding, were you sitting in the likes of Starbucks and taking notes with a stopwatch?

QURESHI:  Yeah, absolutely. And I actually put a really interesting team together in the early stages to just do research very thoroughly for the first six to eight weeks and we synthesized all of these observations. This is across all of the stakeholders. Then we produced some samples and test products that we then put into the London design festival and invited the public to come and see it and give us their feedback. We wanted to engage people with this idea in real time to see what are their reactions? Not giving them a lot of time or information just confronting them with something  It’s harder to get that sort of data if you’ve put people in a room and paid them. Or if you’ve prepared them with some material, they’ll come at it with certain biases. Or they’ll say things like, of course, I’ll be willing to pay five pounds extra for the subscription, and then the ultimate answer is no. So yeah, there’s a lot of those aspects to understand. And so we boiled all that down, we did a series of pop ups, and then that led us to small pilots, which then led us to bigger implementation, and then we got some funding and then we scaled.

MCWALTER: What’s the main changes in people’s approach to sustainability in the last five years? Is it mostly driven by the consumer or large enterprises?

QURESHI: It’s a very good question. It takes a village. If you think of it from the highest level with the MacArthur Foundation setting of really interesting vision for the circular economy, and then you come down to so that’s kind of the more specific NGOs have been talking about this for many, many decades, but we had one that was dedicated specifically around optimization of products reusability. Then you also had figures like David Attenborough, who, with their work on nature focused documentaries and but a fantastic platform to create awareness in people. There are now generations born with his voice in their mind when watching nature documentaries. So when you hear a voice like that tell you things that you’re not really expecting in 2017, and we saw this awakening of consumer conscience and awareness. And that led to a lot of corporates starting to realize that they had to make a change. The problem’s around sustainability was actually always very evident when it came to the corporate side. Every business operating in this space was very fully aware of recycling rates and the pollution crisis; they just didn’t do anything. And their argument would be to hide behind the consumer not caring. And so in 2017, the moment that happened, we saw this immense backlash. And that culminated in a lot of things moving a lot faster for us when it came to consumer packaging.

MCWALTER:  Are large brands typically creating their packaging in house and so are you, in essence, competing with internal processes or more with old school competitors that are out there in the world?

QURESHI:  That’s a good question. The brands themselves don’t make the packaging per se. But they will order it specific to their needs. So that that’s kind of how it works. The brands will then be working with some form of waste company that might be collecting that product and sending it for recycling. And their interest might be or might not be to try and obtain the recycled materials so that they can come back into their supply chain. And then they sometimes mix in the middle distributors who might be moving the product from the manufacturers to retailers depending on their size. So that’s the current linear economy model.  Versus the likes of us come along with the circular economy approach and we say to a brand we’re going to produce a product designed for durability and reuse and we’re going to optimize it and track each item as opposed to on a SKU basis. And then we will integrate this into your existing technology systems.

MCWALTER: If you can go into the supply chain, what is the life of a cup from CupClub?

QURESHI:  Products are manufactured and distributed depending on region. The UK and the US are the two areas of operations with beverage containers of varying sizes from eight ounce up to 20 ounce. Essentially once it’s in circulation, it will make its way to a retail outlet. The retailer will set it up internally and a customer will come in and order, they get the option for reuse. And it’s at that moment depending on the varying degree of technology requirements in store. Instead of taking away a single use, they take this reusable and when they’re finished, they drop it back to any of the drop points network that we are servicing across the city. Those are usually in stores or at the entrance to major public banks or airports, for example. You drop it back into one of those drop points and that customer journey is finished. We then collect the cup, bring it back to our washing depot where it’s sanitized, washed, dried, and then sent back to the retailer. And so typically each product has a lifecycle. It’s designed for 1000 uses, but we typically use it for 250 and then it goes into end of life recycling. So we then bulk collect them, bail them, and then when they’ve reached a certain capacity, we send them for recycling. And both our products that we use for materials are the most highly valuable and recyclable plastics within the ecosystem. So we had to design materials that also had a reusability.

MCWALTER: Looking at your website, you put up your sustainability report from a couple of years ago, and I absolutely loved the transparency. You mentioned that it’s 250 reuses. How many reuses does it need to meet the same carbon impact of disposable cups?

QURESHI:  66. We were happy to publish the sustainability report and lead by example. So the methodology is very much following the journey of the product from the material selection, through to manufacturing and shipment to whichever geography it is in. We are more conservative with some of our methodology and so the number we target to have 50% lower carbon footprint is a cup reused 132 times. 

MCWALTER: It sounds like you have been very UK focused, but I think there were some big moves into the US in the last six months?

QURESHI:  Yeah, it’s been super hectic and very exciting. We were selected as one out of like four to 500 businesses globally, by the NextGen Cup Challenge consortium of brands which includes Starbucks, McDonald’s, Coke, Yum brands, Nestle and Wendy’s. They were excited about the opportunity to work and reuse and come up with alternatives that would enable them to improve their supply chains, reduce their consumption, etc. We were selected and invited to launch in the US market. So that was a good growth opportunity for us. And that’s what brought us to launch in March 2020 across the bay area. And to test this, we collaborated with local cafes on the ground. For example, the technology functionality, the full in-store experience and we worked with IDEO’s research team on the ground to help us synthesize and record all the data as well. So super fun and really exciting. And all just before COVID. So luckily, we managed to get all of that done before things got a bit hairy.

MCWALTER:  Do you think that there will be a mass banning of disposable items at some point in the future?

QURESHI:  It has started already. The European legislation produced quite an extensive documentation around this. They started with the research, which then led them to identify key items that they wanted to phase out. And then a timeline against it. So exactly when and how and what the grace periods would be for different brands and businesses to adopt this. And so it’s not a matter of if, it’s it’s more a case of exactly when is this going to happen.  And this is something that we are acutely aware of and quite we discussed this quite a lot in the team is how do we avoid the same mistakes that we have seen in the recycling industry. 

MCWALTER: You mentioned a little bit earlier the concept of the circular economy. What are other areas of sustainability that you think are the next to really benefit from this circular economy concept?

QURESHI:  I would say textiles are going to go through significant developments. It already is, but I’m looking for it to go into something a little bit more mainstream. So I think when it comes to the production of textiles, the way that it’s made, how it’s made, that there are so many different implications around the world supply chain.

MCWALTER:  How does your growing up in London and living in London affect your approach?

QURESHI: I guess maybe the thing about being an architect specifically in London is that we’ve had some of the best people coming through our institutions, schooling and then into practice. So if you think of the likes of the late Zaha Hadid, and you have all the amazing European architects who have contributed to thinking about cities and development. What does the future look like? So I would say the fact that you’re geographically in a space where there’s a lot of discourses, a lot of discussion and collaboration, that’s been really rewarding. So for me, the city itself offers so much but the fact that we’re, you know, at a stone’s throw away from cities like Barcelona and you can understand the heritage and the history behind how cities have been developing across diverse cultures and you gain a sort of building block to how design works. I’ve been pretty lucky with having that context.

MCWALTER: Are you considering different types of disposable packaging besides cups? 

QURESHI:  Yes. We wanted to understand and build a methodology for one vertical first, so we could get to a point where we tested the whole system and understood the commercial and scalability requirements, consumer requirements, retail etc and be able to get very comfortable with one vertical before moving that methodology into others. So stay tuned. There’s more to come on expanding into new product categories. It’s going to be very exciting. And there’s a little bit of a rebrand that’s going to happen as an effect of that!

Rain and the Circular Economy

Great to chat to Kevin Mercer, CEO of RainGrid a company which uses IoT connected rain barrels to manage residential storm water. We discussed how RainGrid grew out of community outreach initiatives, how the concept of One Water works in a circular economy, the importance of building communities when trying to make change, why companies might choose to be a B corp, why we should build resilient infrastructure and more! Open the podcast on your mobile device by clicking here.

Here is the audio. The excerpts below are lightly edited:

MCWALTER: What can you tell us a little bit about RainGrid?

MERCER: The inspiration for RainGrid evolved over about 20 years, we actually began as a community based NGO. We worked on protecting Toronto’s Don River during the heyday of watershed restoration in the early 90s. I joined a local volunteer board called Bring Back the Don. A small cohort of us were more interested in the water quality issue, as opposed to the natural restoration issue. We asked, “why is this river brown?”. So we started researching and we got to the point where it was clear that what polluted the Don River was not industrial discharge, it was actually the heritage of a modern city; it was stormwater. 

That’s when we learnt that there is this delineation between the public realm and the private realm with an invisible line between the two, which divides how modern cities address stormwater. RainGrid evolved from a community based program called to get homeowners to engage in better water practices through a door to door initiative. One thing we had people do was have people sign up for a downspout disconnection program where people could use rain barrels. It was in essence, community based social marketing. So rather than just telling people about things, we actually gave them solutions. 

Then our program was replicated in the city of Ottawa. In the Ottawa campaign, we started to focus on actually buying and supplying the best rain barrel we could. And that was interesting because when the campaign ended, the company that supplied the rain barrels to the Ottawa water links project came to us and said, “We really like the work you’re doing. Here’s the mold for the rain barrel we just sold you. It’s our contribution to what you’re doing. Go and make as many as you can.” So we found ourselves in the business of actually doing the manufacturing for the product that we had been encouraging communities to use.

From there we created a program in Pittsburgh, Pennsylvania where we put in 600 rain barrels, which is not a lot on the scale of a city, and then they had the engineers monitor the living daylights out of it and determine does this stuff actually work and they came up with remarkable results. We found that past 40% implementation, you get significantly more impact from residential rain barrels. 

MCWALTER: It sounds like there’s nearly network effects with those kind of rain barrels. Is the marginal value of a rain barrel higher once you reach a certain level of penetration in a city?

MERCER: That’s absolutely right. It is the utility approach that we used to call distributed infrastructure, which we’ve now started calling aggregated infrastructure. It’s better to recognize the collectivity of the undertaking rather than the decentralized or, separated nature of what is community based infrastructure. 

MCWALTER: So there needs to be a certain kind of minimum threshold for even a pilot program to start showing major benefits?

MERCER: That’s correct. And yet, pilots for startups are typically very small. So you’ll get a pilot program for 10 or 25 barrels, or something like this. And I’m sure you’re familiar with the term death by pilots. It’s where you never get past that, that threshold of intensity to actually demonstrate the real difference. Our main focus is community based social marketing, which recognizes that you can do aggregated and effective systems at the residential lot level. We are a connecting directly so that it’s the people who are the partners, rather than something being imposed upon them by the city like in traditional infrastructure

MCWALTER: How does using the internet of things help your product?

MERCER: The Internet of Things provides that remote automation that allows the rain barrel or cistern to read the weather. That’s the SaaS platform it communicates with a controller on the cistern. The whole process of how much water is in the cistern before the rain is managed by the quantitative precipitation forecast algorithm that measures the rooftop area, the intensity of the rainfall and the volume available in the cistern and it says if there is more predicted runoff from this roof from this size storm, we are going to empty the cistern ahead of time, and provide as much storage as possible. What’s remarkable about it is you can actually watch your cistern fill. Then after that, you get to use your phone to open the valve to reuse that water. This helps us address the root causes of minor flooding and urban drought; which is the recharge of groundwater in a very impermeable hard city.

MCWALTER: Where are the RainGrid cisterns stored?

MERCER: They’re installed under the downspouts of residential drained. It’s not a whole lot of whiz bang technology at the cistern level, our technological edge is in the software in the dashboards where you can actually see how much rain fell on your property, how much of it you captured, how much have you bypassed, the temperature, the barometric pressure etc. We built RainGrid as a utility for homeowners and we are building our own community, a community of people who care about clean water and want to see a different way of doing things.

MCWALTER: What is the concept of One Water and why is it important?

MERCER: One Water is important because it is the future state we are trying to reach. We are eventually going to wind up in a world where we value rain as a resource rather than treating it as a problem. Today we separate out our conception of water into different silos, for example there’s storm water and there’s drinking water and there’s sewage. One Water says there is no such thing as drinking water or stormwater. It’s all One Water and so you can create a circular economy out of water. For example when rain falls on the property it can be held and reused on the property. Its like the challenge that you have on the International Space Station. There’s no rain on the International Space Station, but they brought all the water that they are ever going to use up on a flight. And they continually reuse that water, they drink what they urinate. Similarly we will take most of the rain that falls on our properties as part of the circular economy. 

MCWALTER: What are the main barriers to the circular economy today?

MERCER: One of the barriers is that we have embedded infrastructure. It’s extremely expensive and it’s very valuable. So if you change the business model, from water in silos to One Water models you threatened to abandon some of those assets. As we move into a One Water world, I think we can do it in stages and one of the first stages that’s really successful is taking the water that falls on your roof, storing it and reusing it. 40% of the water that water utilities produce is put on to our lawns and surfaces, but if you’re harvesting the rain, then you can offset potable water. The other most important thing about water harvesting or rain harvesting is we can recharge the groundwater aquifers. 

MCWALTER: I noticed that RainGrid is a B Corp. What are your thoughts on the pros and cons of a B versus C Corp for tackling problems?

MERCER: I think it really comes down to the corporate culture. We grew out of the not for profit world and it is a joke we tell that, to be more effective, we closed our NGO and became a corporation. Our B Corp experience was very, very interesting. The first year we applied for B corp status we got it. And we got it with a number of 139 vs the average B Corp which gets an 89. We were actually selected as best for the world in both the overall and environmental categories, and we have a nice little round wooden B Corp medal designating us as the best for the world. And then the year after that we decided not to reapply. B corps are for companies who need to demonstrate to the world that they are better than what they have been in the past, its a way to virtue signal  how you intend to practice your business in an ethical and sustainable way. Whereas, RainGrid is sustainability personified already because of our genesis from the NGO world. 

MCWALTER: One of the things I’m thinking a lot about is the trade off between improving resiliency at the most at risk cities on the coast and floodplains versus starting to move or build infrastructure to less at risk cities. What are your thoughts on that trade off?

MERCER: Let me put it this way. Rain is the manifestation of climate change, you either get too much of it or too little of it. The other side is that we tend to look at how to make conventional infrastructure we’ve already built resilient to climate change. I think that’s a mistake. We have typically believe that technology will save the day. The truth of the matter is that people are the source of climate change, and people will solve climate change.  So building community is very important. 

MCWALTER: What are the biggest areas you’d like to see large scale infrastructure investments as we try and restart the economy coming out of COVID?

MERCER: I think water security is very much the key not not just for the public health elements of addressing how we all cope with COVID but in the whole notion of public health, security of supply, etc. Sure, drinking water is a product, but it ought it to be a human right. We can’t afford the infrastructure we’ve made in our cities and often there are non-sustainable entities which we throw huge sums of money at to try to keep from falling apart. Because that’s the way cities are built. And they evolve over time over generations over millennia. We learn certain practices, and we look back at them and we go, geez, what were you thinking at the time? How could we have been so stupid? 

Someone once talked to me about chlorine. Chlorine is both the scourge and the saviour of modern life. It gave us secure, safe drinking water, but it’s also the thing that gave us really tragic examples of water pollution. So we’re going to stumble along, but in that stumbling along we find new methods of doing things. Like the Internet of Things and artificial intelligence, those are going to weave into more and more areas. And RainGrid is part of that wave of weaving those societal services into aggregated infrastructure at the property level.

MCWALTER: What is the largest climate problem but no one seems to be tackling at all?

MERCER: I’d say maybe in our efforts to go off coal and to use natural gas as a bridge, we are getting large amounts of methane emissions from anything associated with natural gas production. That’s a huge one. That’s kind of the black eye of what would otherwise be a really nice bridge technology. There’s also the question of the The Faustian bargain with nuclear energy. So I think those are two big picture issues. Another thing that’s really important is the separation between the haves and the have nots. Who gets access to climate resilient technology?

MCWALTER: Is there anything that I should have asked you about but did not?

MERCER: Community is so important. We don’t look at community as a brand. Within the climate world there needs to be not just  the community of practice but the practice of community. Alot of climate focused communities traditionally had a really negative connotation, for example the idea of the tree hugger.  But the truth of the matter is, is that we do need to build a brand of a community of people who say, this is how we choose to live our lives. And to talk about things like RainGrid and how it affects where people live. So in the world of climate adaptation and stormwater management it fits together with people. And, and it’s how we’re going to move forward.

Building with Bamboo

Brilliant chat with Troy Carter, Co-Founder of Rizome, a company that converts bamboo into a cutting edge, decarbonizing building material. We discussed the goals of the Rizome team, the amazing properties of bamboo and why it has taken so long to scale as a major building material, the possibility of bamboo skyscrapers, the importance of building a fully integrated supply chain when scaling a product like bamboo, why bamboo makes a great candidate for carbon offsets, the work-life balance of the tech community in Hawaii and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: What drove the initial decision to start Rizome? Was decarbonization the end goal, or was it you have found this amazing material that was bamboo, and you’re looking basically for an application of bamboo and decarbonisation was a nice side effect?

CARTER: It was both; the climate crisis is the biggest theme of the century, at least so far. And bamboo has a particularly unique role to play because it grows so fast. And it also grows in equatorial regions and the global south, in places where there’s been massive deforestation. Climate equity is a real issue. Our team has been working in bamboo for a long time. David, one of our co founders has been one of the foremost bamboo architects for the last 26 years. And we have a pretty amazing team of people from diverse industries from aerospace manufacturing to running some of the largest energy companies in the US to software development. And our team came together to say, what is the biggest climate impact we can have? What are the technologies we need to implement?
And bamboo is just a super scalable future building material that over the next 10 years will be seen as the obvious next major construction material.

MCWALTER: What are the advantages of bamboo as a building material? 

CARTER: It’s technically a superior material to wood. It’s super strong, at least two and a half times as strong as Douglas Fir. It’s very fire resistant so it’s got a class A fire rating. So that solves two major problems in construction, which is strength and fire resistance. And it’s also quite cheap, it grows really fast. And so at our next scale of manufacturing, it’ll actually be cheaper than comparable structural wood. And that’s a big deal. We don’t want to have to make a developer choose between a technically superior material that’s regenerative and something, that’s really expensive. So, bamboo is technically superior, the same price or cheaper, very strong, better fire resistance that’s all on the technical side. And on the regenerative sustainability side, it grows super fast, sequesters 10 times as much carbon as trees, and has really great effects on water, soil health. It’s also an annual crop so that our local partners in local indigenous communities can actually have an annual crop rather than waiting 40 years for forestry projects to come online.

MCWALTER: So why do you think it has been underutilized? 

CARTER: Broadly speaking due to supply chain reliability. Historically, in the US and Canada, there’re a lot of trees and we actually do a pretty good job at harvesting them sustainably. 100 years ago, you could cut up a Douglas Fir for super cheap and they were big trees, we got them all down. That’s really no longer the case. Our tree age has been getting younger and younger, even in the US. So there’s more and more softwood internationally. You go to India, Indonesia, Philippines, Bangladesh, there are no trees left. And I can’t overstate this. It’s not that there’s just logging moratoriums, you simply can’t find the trees. So if all the new buildings that will be built in India, in Indonesia, in Bangladesh, if all those buildings are built with steel and concrete, we’re going to hit some major climate thresholds that we don’t want to hit. So we need an alternative. And we can’t plant trees in these areas quickly enough to actually make them a viable construction material. Bamboo is really the scalable solution that will grow very quickly. And right now we’re pioneering a manufacturing model. There’s just never been the level of sophistication in technology brought to bamboo. We’re also using a species of bamboo that’s a much larger store  which pushes costs a lot lower. And there’s never been a supply of this bamboo that’s been large enough to actually scale a major industry around. And broadly, if a developer is building a $2 billion building, they want to be able to guarantee that the materials will arrive on time. And that’s just never been the case with bamboo.

MCWALTER: If the supply chain has been such a blocker in the past, have you had to vertically integrate across the entire supply chain? Or have you just found really good partners all along the way?

CARTER: We’re doing everything and also making really good partners. From planting, to processing, to final step manufacturing, and sales, we need to innovate at every level. We’re also the first company doing very detailed data tracking. That’s from everything from plant genetics to basic supply chain data to tracking things like how long does it take to get from the clump to the truck and from the truck to the factory, and through each machine line? It’s just a level of data tracking that hasn’t been done before in this industry.

MCWALTER: What scale are you currently at?

CARTER: I would say we’re at version 0.1. And with the next funding round that we’re doing in a couple months, we’ll go to version 1. And version one is about $17 million revenue per year per plant. And that’s a replicable model that will be able to be copied in other places of the world. So we’d love to go to Ethiopia, Ghana, Indonesia, and India and provide a replicable model so this industry can really take off.

MCWALTER: What form does your main bamboo product take? 

CARTER: Our primary unit right now we call slats, and this is when you take a round pole of bamboo and you cut some rectangles out of it. And these rectangles are 10 feet long. These small boards we then laminate together into panels or other engineered wood products, and one of the processing facilities we are building would make about 20 million panels per year. 

MCWALTER: What types of things could be built with these panels?

CARTER: We’ve already said that bamboo is a really technically great material with great fire resistance and strength and also durability. And also aesthetics, it looks great, and you can have exposed beams because of the fire resistance. Where we want to go and where our end goal is, is in large scale structural materials. And so right now we make panels. This is the plywood. This is the thing for walls for flooring for underlayment, stuff like that. In the long term, more and more architects and designers will be building for the material, which means a movement towards panel based construction versus stick construction, for example, studless walls, reduced CLT member size because of the strength characteristics, exposed beams because of the fire resistance, it solves a few major issues in mass timber design. And so we can imagine everything from skyscrapers to residential houses being built with bamboo.

MCWALTER: Skyscrapers? That’s interesting, is the technology there to build, let’s say something like a skyscraper from bamboo today?

CARTER: We’re still waiting on a few things. So one, I would say that the academic and testing side is mostly there. But there you know, there’s still code compliance, it’s going to be another two years and half a million dollars for us to actually be able to go build a skyscraper on the compliance side.

MCWALTER: That’s pretty quick. On the code and compliance, how have you found working with regulatory bodies?

CARTER: You don’t want to dis regulatory bodies, they do a great job. They ensure the safety and longevity of buildings. And there’s such a big movement right now towards low embodied carbon construction. You look at the bill that was just put in the House of Representatives a couple weeks ago for netzero construction. You look at any architectural magazine coming out, it’s all about low embodied carbon or net zero buildings, and that’s a trend that will continue. So on the regulation side, we’re seeing a lot of support. People want these materials, there’s going to be a major move towards more mass timber, and bamboo in particular, as a next wave of material that’s coming. So we actually see a lot of support and people very willing and excited to work with us.

MCWALTER: Who are your primary customers? 

CARTER: This is a B2B business, at least at the moment. In the short term, we are selling to high value customers, which means they’re using the material as a hardwood replacement for cabinets and flooring, and that goes to wood distributors. We’re currently taking contracts for our next manufacturing facility and these are wood distributors, but also lumber companies, particularly in the Pacific Northwest who want to make bamboo wood hybrid products. Also, flooring manufacturing companies who want to do hybrid products. And, even conventional big retailers who maybe want to sell to consumers, but we’re not not selling directly to consumers at the moment. 

MCWALTER: Can the bamboo plantations be part of carbon offsets?

CARTER: That is a whole other category of the business. We’re manufacturing bamboo lumber, and we’re planting bamboo for agroforestry, and also native forest. And when we’re planting forest and doing bamboo agroforestry, we can generate a lot of very high quality carbon offsets with holistic benefits. Our goal is to be doing 50,000 hectares a year of planting by 2024. That’s a pretty doable goal. It’s pretty fast and easy to scale planting. It’s pretty hard to scale manufacturing. And so yes, we are selling carbon offsets. Right now we’re selling through brokers. And hopefully soon we’ll also be selling directly to industry partners or people who want to set their company up to offset their emissions. Incorporating bamboo agroforestry makes it profitable from a carbon offset side rather than just covering costs. There’s a lot of new investment models that are possible once it’s actually profitable.

MCWALTER: Thinking about the indigenous groups in the Philippines you work with, what did the initial conversations look like? Because often those groups have been by outside businesses coming in. What was your approach to building relationships with that community?

CARTER: We’ve been in conversation with groups in the Philippines for about four years now, we really only started implementing planting this year and, and manufacturing this year. So it’s been a long time relationship building. And that’s about establishing trust that’s making relationships. And now I think we’ve finally worked out a model where everyone is incentivized in a way that’s healthy for the planet, healthy for the communities and actually provides a regenerative building material to the global market. But it’s been a long journey, and it does, you’re right, it’s a careful and paced way of doing business.

MCWALTER: Where do you see Rizome in about 10 years time?

CARTER: If right now we’re going from version 0.1 to 1.0, over the next 10 years we’re going from model 1 to model 100. And this isn’t necessarily technical innovation. It’s just replicating the same thing over and over in new regions. And that’s a 500 hectare bamboo plantation surrounded by native forest, a processing facility that harvests that area, and then a regional lamination facility that makes final finished goods for the local or global construction market. By 2050, we have the internal goal of sequestering 10 gigatons of carbon. That’s a pretty ambitious goal. That means we need to be in a lot of different countries, a lot of different regions, producing a lot of material, but also planting quite a lot. You know, that’s planting probably 2 million Hector’s of bamboo and native forest.

MCWALTER: Just get a sense of the scale of 50 gigatons of carbon?

CARTER: 50 gigatons of carbon dioxide drawdown is about 1% of all anthropogenic carbon emissions. 

MCWALTER: What do you think about Fortune500 companies making supply chain decarbonisation pledges?

CARTER: I think it’s amazing that major companies are making decarbonisation pledges. This is one of the points of collaboration where Rizome and other companies doing reforestation can collaborate directly. So the carbon offset market hasn’t been super effective over the past 20 years. And one of the reasons is it’s mostly avoided emissions rather than actually taking carbon dioxide from the atmosphere and putting it in the ground or into durable goods. And so what we are seeing more and more is a bifurcation in the carbon market where there are avoided emissions and then there are sequestration solutions using plants or direct air capture. For example, where the co2 is taken from the air and put into a durable form, and then there are getting paid for storage solutions, which means, you know, biochar or building materials actually just storing the carbon in a form that is durable. And what our solution is, is a very high quality, easily trackable and measurable system for extracting co2 from the atmosphere and putting it in buildings and in the ground. So let’s partner on carbon offsets. Let’s partner on reforestation. And let’s build all the new buildings out of regenerative building materials.

MCWALTER: One of the critiques of carbon offsets has been the double counting problem – what are your thoughts on tracking carbon in a way to avoid double counting?

CARTER: We track everything. We have a unique identifier for every clump of bamboo that we plant and harvest that allows us to get very precise data on how much co2 is being sequestered, where it goes in the manufacturing process from into a building material or back into the ground. This is something that hasn’t been done before. Historically the flow of carbon accounting in forests and industries is pretty nebulous. This is something that needs to change and something that we’re changing in terms of carbon offset quality. Right now we track with a geotag. In the future, we might do RFID or something similar.

MCWALTER: Whether it’s with Project Drawdown or some other framework, are there any like really large decarbonisation problems no one seems to be tackling at all?

CARTER: Yes, there are. I don’t want to go out too much on a limb there. There are some really big areas and more than that almost anyone can become an expert in one of these categories in six months to a year. Because there are so many new opportunities, if you think of ocean co2 and kelp farming and low co2 concrete and renewable energy systems. And particularly financial vehicles for financing all of these operations, there are so many areas that need work, that it doesn’t require a huge step of technological innovation. The technology exists to address climate and to adjust ecological restoration. It’s mostly a financial issue that affects the speed of scaling. So one of the areas that I’m most excited by right now is new models for financing reforestation, if we can actually create an investable product that incentivizes living on a beautiful, natural biodiverse planet. Great, let’s go make money by reforesting the earth. And I think that’s possible, particularly incorporating bamboo agroforestry. 

MCWALTER: I believe you’re based in Hawaii. What are your thoughts on the local tech scene in Hawaii?

CARTER: With COVID right now, there’s a bit of an exodus happening from cities as people more and more realize that work can go online. I started a business in San Francisco a handful of years ago, ran it for a few years and sold it. And during that time, I worked really hard and worked in a way that was unbalanced. Like very, very progress oriented. And there is something about working in a region like Hawaii where a sense of lifestyle balance and nature connection is more at the forefront. If people are happy and living balanced lives they are just inherently more creative. I really admire when some companies have gone to four day workweeks, and that doesn’t actually decrease the level of productivity and actually gives people more. More enthusiasm to work on something for a really long time. Because, we’re going to be doing this for decades, and we’re assembling a team of World Class implementers and thinkers and finance people and lumber technologists and plant biologists. We want to be engaged with this team for a really long time and have everyone’s needs fully met. And that’s a lot less easy in an area where people will face burnout a couple years down the road.

MCWALTER: You mentioned a business that you were involved in, Troy cider?

CARTER: Yes, back in the day I started a cider company. At that time, there was no cider made on the west coast in the US. And so it was one of the original cider companies. It grew super quickly, because it occupied a niche in the market. And it was fun, you on a purely lifestyle basis. It was an amazing business to be a part of, and in the end, it was really profitable, and set me up for a level of freedom and exploration where I could give my energy to projects very freely without being concerned by money. And for anyone interested in going into climate or, or another area that probably does take a lot of research. So to start in this area maybe you don’t know what you want to work on necessarily, so maybe it’s six months or a year of volunteering at companies or doing consulting projects to get the income to make the jump. And so working on that also gave me the freedom to experiment a lot over the last few years.

Energy and Data Silos

Brilliant chat with Colin Gounden, CEO of VIA, a company that uses machine learning to enable encrypted analysis of confidential data at large energy companies. We discussed the comparative advantage of the VIA founding team,  the way VIA solves for the data siloing issue which so many machine learning projects suffer from, how they solved for slow enterprise sales cycle with the “30 minute pilot”, how growing up in multiple countries affects your perspective, why energy efficiency of everyday appliances is a massive opportunity for cleantech founders, how they hire for their company value of “love in:love out” and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: What would you say was the comparative advantage of the initial founding team?

GOUNDEN: I think familiarity plays a big part. Some of us have known each other for 10-20 years so there’s some advantages just in terms of direct communication. You can have very direct conversations,  there’s no beating around the bush, there’s no kind of like mincing words, and you get a lot of stuff done a lot faster that way. Also, we tend to know each other’s strengths and weaknesses and have been able to say, Hey, this is my weakness, this is not my area of strength, and I could really use some help here. And sometimes, in other founders, some groups find it hard to admit weakness.

MCWALTER: Thinking back to those early days, what were the first 3-6 months like?

GOUNDEN: Lots has changed since that period. In the early days, we were really focused in the area of machine learning and AI to solve problems in the energy space. We actually started by working with regulators. The Federal Energy Regulatory Commission was one of our first customers. And I would say in total transparency, it was less about the software and more about solving the problem. It looked a little bit more like a consulting company with software, figuring out what software was the right software to solve these kinds of problems. And certainly, I think even today still, but in 2016 certainly, AI was very much in a custom mode and it needed a lot of hand holding. So the first three to six months in addition to working with some customers like regulators, there was also a lot of client conversations. We had a good CRM tracking system. Jackie Finn runs our marketing group and she was very insistent about us having a really good tracking system. So I think we did over 400 customer interviews in the first year. So a lot of it was just customer discovery, just understanding what the market needs and doing some paid work along the way.

MCWALTER: And what is an example of how VIA solves problems for utilities? 

GOUNDEN: For example, we have a large European utility, who have petabytes of data. And they want good in-house data science people, but it’s actually really hard to attract certain skill sets to the utility industry and you see this a lot; they have six open positions and only one filled. And because they cannot often get the people in-house, they would like to make a choice of packaging the data in order to work with academics or consulting firms or maybe even general data scientists. In an ideal world, that would be great. But of course, there’s lots of confidentiality issues and so they cannot just send that data out. Instead of getting access to the data directly VIA enables third party data scientists to write up queries in Python and basically send that to wherever the data is, it runs there and results get returned. And we have a bunch of checks and balances to make sure the code you’re writing isn’t going to steal something,and the results that are getting sent back aren’t revealing too much. There’s also an audit element to make sure the utility knows who’s doing what when, and with what data. This solves for the privacy concern while giving utilities access to amazing data science talent. 

MCWALTER: One of the big common problems with machine learning and those kinds of ventures is data siloing. What are your thoughts on that?

GOUNDEN: We have one customer who said they have two divisions, one in mainland Europe, and one in that In the United Kingdom, and they said it takes nine months to transfer the data from one unit to another. Mary, Queen of Scots did not take so long. It’s all these regulatory concerns that’s actually blocking that transfer of data. Our goal is that they could learn from each other without having to physically send their data. That is one of the problems VIA is solving. 

MCWALTER: When a client shows an interest what is the typical kind of timeline to get a client up to the point where they’re getting real value? I imagine these jobs in general are just moving pretty slowly?

GOUNDEN: So we launched something in 2018, called the 30 minute pilot. And we thought this is kind of an industry first because so many pilots, prototypes and demos take too long. And so literally we said, well, what would it take? Let’s think about this differently. What would it take to get real data, real results in 30 minutes? So we created an environment to do that. And actually,it only takes three or four minutes to load and the other 27 minutes, is getting people comfortable with the idea that they have to go collect a little tiny piece of data on their own by digging around their files. So that’s why it totals 30. Also, we have a pilot we offer where for transformers for example, if the client is interested in benchmarking their transformer performance against the hundreds or thousands of transformer readings we have in our database without having to actually physically combine your data. So we can do that in a 30 minute process. 

MCWALTER: With COVID a lot of companies moved from an office, or multi office kind of model to something fully remote, what did that transition look like for VIA?

GOUNDEN: Our VP of product the other day, he mentioned we seem to be more productive than, in a way and I said, that’s probably because, One, no one’s on vacation, Two, thankfully no one’s sick  and Three, no one has any distractions or other things to do. So that trifecta means you will likely get a big bump in productivity over the few months while people have been working remote. I do think it takes work to get that to be efficient. So I’d say we learned a lot of tactical things for example, all meetings start on time. And you see people actually show up one minute early because that’s important and video is essential. And, in our Slack channel, everybody logs into the morning and says welcome and everybody says goodnight at the end of the day and that’s an important part. So there are little things that help the culture stays cohesive and I think that that takes a little bit of work. There’s also the little things like virtual pub night and trivia night.

MCWALTER: What are your thoughts on the opportunities for founders in a world that targets 100% electrification?

GOUNDEN: Because I come from the world of data analytics I have a bias which is in a world of complete electrification it means a world where we can optimize power consumption. We can learn from each other about how power consumption varies in the world. In Japan everything consumes gigantic amounts of power, the televisions, the rice cookers, the refrigerators. And if you go somewhere else, like Kenya or parts of India it turns out because power is expensive the exact same 27 inch television does not use the same amount of power in Kenya or India as it does in Japan. And so what are the opportunities for an entrepreneur? It’s saying, “Well, how do I take everyday items and make them low power? Because that helps everybody. So pick your favorite object that you know well and that can be air conditioning or rice cookers or refrigerators or dishwashers or  cell phone chargers or whatever it is and ask how do I make that charge faster, smarter and with low power consumption? There’s hundreds of opportunities like that. 

MCWALTER: What are your thoughts on like the increased risk from cyberattacks in a more and more connected kind of power grid?

GOUNDEN: Unfortunately, that’s increasing as an issue. You once had a house with a door and a lock, and now you’ve got thousands of windows, and it’s easier to break in.  One infamous example of a retailer who had a big breach of credit cards happen by someone hacking in through an air conditioner unit. So I think that’s a real concern.The thing to do is not just depend on cybersecurity to keep up with hackers, but I think edge processing will be a great way to deal with it, in other words don’t move the data. Don’t let the data have access to a window, and do as much processing on the edge as possible, and you minimize some of those risks. Keeping it fragmented and distributed is one way of kind of making sure we are dealing with some of those threats.

MCWALTER: What are your views on things like blockchain applied to cleantech?

GOUNDEN: We actually have a small blockchain component we use to basically audit logs with an immutable ledger; it’s basically a smart contracting function that controls who can access to what data when and for what purpose and then tracking, the usage and and what data was used at what point in time. We never saw really the big crypto coin opportunity. A lot of others did, but the idea of this kind of decentralized database infrastructure and auditable ledger that makes a lot of sense, especially in a world where you need technologies that are beyond trust, or you don’t know all the parties. So, in a power grid, where I have a manufacturer of a electric vehicle, and I have a charging station from somebody else, and I have electricity powered by some distributed generation site by a third party and then a grid that connects them; all of those things may not know each other so they need trust to be able to kind of know what’s happening when and be able to have some auditable trail makes sense. So we see a good use for blockchain in those instances. 

MCWALTER: Where did you grow up?

GOUNDEN: I grew up a little bit everywhere. I was born in Canada, but grew up in Scotland and I went to 12 different schools around the world. Some time in California and in Australia and I think that influenced me in a lot of different ways. You become more open to lots of things and you realize the world is filled with very different people and you have to adapt quickly to stay alive and be respectful of others? Because there’s huge diversity and what you think is normal may not be normal to anybody else. I remember going to school in Scotland and on the first day of school meeting somebody and saying “hi” to them. And “hi” was just not said in Scotland in those days. It was a very North American thing .And I remember thinking, well, that’s what you learn, you learn to adapt. So being respectful and open is probably the number one lesson that comes from growing up in so many places.

MCWALTER: I actually had not a dissimilar background, growing up in different countries. And one of things I found was you definitely started to notice, and ask the question, “Why are things like this?” And often people do not notice certain things because it is the water they are swimming in. 

GOUNDEN: Right. I think this is an age old question. I think Voltaire wrote about the foreigner who comes to the court and asks all questions like, “why do you have all of these odd, behaviors and rules and standards?” The outsider often has an interesting perspective about why we do things.

MCWALTER: When building company culture is the primary lever used at the hiring stage or rather the building of certain values within the company over time?

GOUNDEN: The screening process is super, super important. And one thing we do is give little case studies,whether you’re an office admin, a developer or DevOps person, you have different kinds of case study assignments that everybody gets. It’s easy to be charming on a 45 minute call, right or in a meeting, but you need to actually see, are they interested in the work? Can they pay attention to detail? Are they committed to it? We have a value, which is “love in:love out”. If you love what you do, it’ll show in the output that you have. We have a 3-4 month probationary period and some people are like, “yeah, I take that bet. I bet I’m going to be great.” You know, that’s not much of a leap. Generally the best people are the ones who are willing to take that bet on themselves. There are probably 50 other little things that we do along the way to keep people motivated and which attracts the best people.

Painting and Packaging with Carbon

Very enjoyable chat with Ani Sharma, CEO of Graviky Labs, producer of AIR-INK, a unique ink made from CO2 pollution. We discussed the importance artists played in putting AIR-INK on the map, what it is like as a startup working with the sustainability programs of large companies, the difference in the tech scenes between Boston and Bangalore, how prepared India is to cope with future climate risks, the importance of show don’t tell when building a startup and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: I believe one of the products that you’re producing uses carbon to produce a type of ink?

SHARMA: If you look at carbon, it’s a very wide term but it is the basis of any fossil fuel that you ever burn that it will produce these emissions. Now, these emissions are something that we’re trying to fight, because they cause climate change and cause measurable health impact on society. But if you look at them from a material perspective, all these emissions are super tiny in nature, you are dealing with something less than 10 microns in size. And that’s what makes it dangerous, because when they go into your lungs, your body can’t filter it. But the same property which makes it dangerous is the same property that is a very desirable property when you’re making commodity products. So what we thought was here’s an interesting idea. What if we start taking it and kind of turning it into different types of ink? For example, currently we are trying to make inks that can print on textiles, inks that can go into your writing instruments, inks that can be used for packaging. And in the early stages, the art industry became really interested in what we were doing. And it kind of spurred a global movement where people started replacing the black colour they used for their art with our inks, which pushed us forward and led us to start looking at what are the more interesting applications? We can target packaging, for example, so the more packaging we print, the more we are upcycling carbon emissions.

MCWALTER: You’ve worked with some pretty large clients like Heineken, etc. What is it like working with those kinds of large enterprises with a product like this? 

SHARMA: 15-20 years ago, sustainability was this checkbox for big companies. And it’s very recent that companies stopped just talking and they are now kind of waking up and cleaning up their act because the end consumer is becoming very aware of what they’re consuming. How do these companies make their production more sustainable? And sustainability becomes a narrative at these big companies. So we said, what is the easiest way to replace carbon that they use in their production? Printing was the lowest hanging fruit for us, so we targeted that because with print you get on every box out there. So it’s very interesting how sustainability is becoming a part of the production cycle and the sustainability goals of these companies. 

MCWALTER: What’s still the most challenging part of the business supply chain from your point of view?

SHARMA: I think we have an advantage here because we are early in this game but as this is scaling up, there’s a lot of demand coming in that we are not able to fulfil because of the size of the company that we have. So we are still operating at a medium scale in a team of five to seven people full time working on this right now. I will say the biggest challenge is right now standardisation and the market focus so we are still learning. Like how does it position to an apparel company versus apparel companies are willing to pay a higher premium than a packaging company because packaging is not the main product packaging is always the main what the main product comes in. So it moves very fast. So, in terms of software, like how do we build a model around it because we have very few comparables to learn from. But one major learning that we are kind of adopting and how to resolve these challenges, we’ve taken inspiration from the way Dolby built their company, how they licence that this is “powered by Dolby”. 

MCWALTER: I think one of the really powerful ways of making a licensing model work is having really good actual branding on the product or the commodity itself. Looking at AIR-INK, the branding is very distinctive and well designed. What was the process of getting your own branding for AIR-INK?

SHARMA: We are not designers by profession. But the kind of work we are doing is very attractive to the creative community, especially the design based community. So in our very early stages, when we were collaborating with for example, Heineken, it wasn’t just a business deal. It was a massive marketing effort they put in so this idea could be understood by a seven year old. There’s a very influential designer who says sustainability game is all about an aesthetic game. So if you are making things that are aesthetically, it kind of satisfies you. on so many levels, people feel good about it. They want to pay for it. They also know that it measurably improves their contribution to the environment. So during the Heineken collaboration, we worked very closely with some really influential designers from an agency called Publicist.

MCWALTER: In terms of working with artists model, I think it is a huge advantage to be able to have a product that scales in terms of its own branding, because the product is the branding in many ways. What are your general views on the power of artists in changing minds around carbon and climate change?

SHARMA: That’s a great question. This is something that we cracked really well. We opened ourselves up to collaboration and the nature of the team is really driven around very interdisciplinary collaboration, but we also knew that we don’t understand art and aesthetics. And that art is very powerful. Once you realise that it’s very powerful and you cannot do it, you open your doors and give access. And when you give access, the kind of things you see artists come up with is very powerful. So with AIR-INK we spent like zero marketing dollars until now. A genuine community of real artists from around the world, or from places you haven’t heard about came in, they use AIR-INK, and they still do. The branding, as you said correctly, is the product. I think I should use this line,that would be a good addition to the pitch deck.

MCWALTER: How do you think the tech scene in Bangalore compares to the one in Boston?

SHARMA: It’s very different but it’s very similar in spirit. Boston is very hard tech, things like bioengineering, material science. Bangalore became the place where a lot of software jobs were created because of the outsourcing industry. So everybody who would go and get an engineering degree would go straight to Bangalore and there’s a job there. If you throw a stone in the air, it will probably hit somebody who makes an Android app and, or an iPhone app, it will hit a software developer. As the society grew, a lot of people started doing some ambitious startups. And some of those startups succeed, which meant everyone started quitting big companies and regular old roles and started taking more initiative. So I would say the major difference would be the nature of startups. Bangalore is extremely ecommerce software oriented though I’m pushing for a lot more deep tech. So once one company succeeds, a lot of other companies like that also start. So that community is growing. It’s a great city, however, traffic jams are a problem and it hasn’t evolved to cope with modern traffic.

MCWALTER: You grew up in Delhi. How does that shape your approach to things?

SHARMA: I grew up in a very academic family and in the early stages, I was really fortunate to have an exposure to good problems around me and access to mentors for example problems around disability and pollution, which kind of shaped my worldview in terms of how I want to do my engineering. So application of engineering for problems around disability or environment was personally important, but also doing it in a way that it’s a business.  Because I feel that philanthropy is great, but business is the real way to solve problems. In the end, people want to consume and if you’re making them consume better, it’s powerful. 

And because of some of the things that I’ve seen around India and also, living for some time in Boston, there’s a very nice book about experiencing different cultures called culture map. It talks about how you move in different cultures and learn from them. So For example, if I had not grown up in India, I wouldn’t have had the idea of looking at air pollution as a resource. But had I not spent time in Boston, we wouldn’t have had access to a lot of amazing people that came and helped us out on the tech side of things. So I think that bridging happens when you expose yourself to different cultures

MCWALTER: In terms of other technologies, which clean technology gets you most excited about its impact on decarbonisation?

SHARMA: I’m really excited about carbon capture, the way it is growing. There was a lot of debate around it 10-15 years ago because it also kind of hits at the political interests and economic interests of a lot of old companies that were conventionally dependent on fossil fuels. So there’s a huge lobby sitting in the government trying to make things like clean coal or and the sort of green washing that happens around that. Now, decarbonisation, and technologies around it from a carbon capture perspective is one way, but at Graviky we are taking a different route, what we are doing is we are making carbon negative consumption popular first. And once we do that, and once the narrative is built solidly, we will start pushing out more and more carbon capture technologies.

MCWALTER: Will COVID be a net positive or negative for decarbonization?

SHARMA: We did an experiment around it actually. When COVID happened everybody started noticing a big drop in carbon emissions. So people are consuming less, people are in their homes, people are driving less. If we are talking about the circular economy when corona hit, there were no n95 masks for a long period. The cover of the New York Times was about a shortage of masks and n95 masks was produced in a few places then shipped through the regular supply chain. But because of COVID so many of us are pushing for ideas on how can we start producing these masks locally? How can we become self reliant and produce our own safety masks? So, it’s like the crisis automatically shifted gears towards a localised circular economy, which is a good way to look at where the future is going.

MCWALTER: Let’s say I’m a young person, and I want to be the next kind of generation analogue of what you’ve done. What advice would you give to that person, who’s just coming up and wants to be involved in clean technology?

SHARMA: From what I have learned, collaborate as much as you can. If you think you’re a good engineer, then make friends with good designers and good story tellers. And if you are a good storyteller hang around with technologists who can give you a new story to tell in a format that you haven’t used before. I think that’s a good way of starting to learn and to build upon solid ideas. Also, I believe in doing. So build, rather than tell. When you show things to people, people believe it more than you tell it. 

Energy Storage, and Decarbonization

Very enjoyable chat with John Jung,  former CEO and Co-founder of Greensmith energy a long term energy storage company, and currently an operating partner at Cota Capital.. We discussed the investment picture for cleantech and green energy, Greensmith Energy’s acquisition by  Wärtsilä, the massive opportunity of energy storage, why India and China are the countries to watch for the future of cleantech, how fresh eyes on an industry can bring about the most radical innovation and more!

Here is the audio. The excerpts below are lightly edited:

MCWALTER: What is your perspective on raising money for renewable energy, green technology, clean tech companies from VC? 

JUNG: I can speak to that as an entrepreneur that’s gone out and raised money for different ventures, where the goal was actually to raise the least amount of money. Not the most. Sometimes you hear about Silicon Valley CEOs and how they  go out and raise as much as they can. The problem with that mindset is that, although you may need a certain amount of money, you have to really be deliberate about the trade offs that you create, which basically means you have to say no to a lot of ideas that engineers and developers develop. It also really kind of forces you to make strategic choices of what it is you want to be when you grow up? 

But from my experience of the venture capital community with, with energy and clean energy in particular, I gotta be honest with you over the last 20-30 years, it hasn’t been very good. Having said that, I think very much like the railroad where, maybe 1.0 doesn’t quite kind of get there in terms of all the people that invest their infrastructure. it usually takes a 2.0 or 3.0 infrastructure, it requires critical mass which we are now getting to. 

MCWALTER: Your views on the state of the battery market?

JUNG: It’s really good to be agnostic as much as possible. A good example of what I mean strategically about that is if you are a battery company, let’s say your battery is the best battery. But batteries are very much like car engines. In that you’ve got a reason for a Ferrari engine, you’ve got a different reason for a Volkswagen engine. And it’s not to say one is good or one is bad, you just have different horses for courses needs for. And batteries are no different, not just in terms of duration, and density, but all the different cycling. 

MCWALTER: I’d like to understand the business model a little bit better? Was it like a subscription pricing model or more milestone based? What was the actual kind of monetization strategy of Greensmith?

JUNG: Yeah, I think that’s that’s another excellent question. Because I think this is where a lot of entrepreneurs get wrong, quite frankly. I think it is good to start with something, right. It could be an idea. It could be a model, it could be a material. It could be data, it could be anything. But ultimately, when you’re building a company it’s essential to get an understanding of who’s gonna pay for something that you provide…

MCWALTER: One of the things that I’ve noticed is, the US has resisted a carbon tax so far, while we’ve seen other countries move forward with them including some states in the US having carbon regulations of various types. On the other hand, you have corporations like Microsoft, and even McDonald’s making very strong decarbonization commitments, which ends up having a lot of downward pressure on their supply chains to decarbonize. In your view, which will have the larger impact in the US specifically on decarbonization, government regulation from the top or these kinds of sustainability commitments moving through corporate supply chains?

JUNG: I think there is a lot of traction and with some of those household names people and people pay attention, right? When Apple does this with their new building or, Google and Microsoft does that, it gets a lot of attention. Having said that, I think the big shifts that are happening are regulatory. But it’s being caused by other bigger shifts that are also very positive in the market. And that is associated with this phenomenon that people called the Henderson curve. What I’m basically saying is, it’s not just that solar energy generation, power generation is hitting the parity line. And  the numbers just speak for themselves in terms of new assets, new generation assets that are being deployed around the world, but they’re not stopping there. They’re gonna continue getting cheap. And there’s two reasons behind that. One is the sun and the wind is free, approximately free. The second reason is that I think the heat rate or the efficiency of an internal combustion engine is around 40% maybe. But solar and wind just gets cheaper, the more you produce it. So the last time I read any kind of academic research on the new curve for solar, it was like every time you double the production of a module, whether it’s thin, or crystalline, or what have you, it improves in unit cost by a not insignificant amount and we’re still only scratching the surface on solar penetration around the world. 

MCWALTER: What is your view of the Canadian tech scene? 

JUNG: One of the things that I think is kind of nice about starting companies in Canada, is that in Canada, in particular, is that I think the values are very similar to the US when it comes to entrepreneurs and business. And number two, I believe, for a while Waterloo graduated more software engineers that Microsoft hired than any other school in the world, so the talent is there, right? The economy is super stable, startups usually are created or sometimes created in places where you feel free, you don’t have to worry about this and that you can kind of focus on, how this cloud computing platform is going to disrupt, medical services or whatever you’re thinking about. And then the final thing is, I think it’s got enough critical mass of stuff going on in multiple sectors, because one of the things that startups really benefit from is stakeholders that are along for the ride in some way. 

MCWALTER: You’ve seen kind of clean tech applied in a lot of different countries, which country is most on track to overachieve in terms of their decarbonization?

JUNG: They tend to be  some of the biggest economies in the world, one is India, and one is China. China’s pretty simple.  for all the good and the bad of any country in the world, when they decide to put their mind to something they do it and they do it for a really long time. And they do it with basically half the supply chain of the world. So when you look at the statistics on solar deployment, or when deployment or  storage or  manufacturing capacity, you can kind of take that number, cut it in half, and basically argue that half of that is China. That’s how massive it moves needles, right? Many, many different needles. So, and I think people who are operating in the renewable industry have to be thankful for that, regardless of how they feel about different governments. 

The other one is India.There are some very aggressive business people, developers that are operating in that country and unlike Western Europe and the United States, they are bringing clean energy to some of the poorest people in the world, and I just love that. If you take a look at the electricity prices that a poor farmer pays for, in Southeast Asia, they are as high if not higher than Western European, and the United States and North America. And part of the reason is inefficiency, and all these things that I think are a great opportunity to improve on. But ultimately the eye on the prize there is bringing clean, affordable electricity to people. 

MCWALTER: Is there anything I should have asked you about but did not?

JUNG:The only thing that I would like to add about the energy industry is that sometimes it kind of feels impenetrable.That’s why entrepreneurs like to do B2C type startups where they are working on a thermostat or something that they can relate to like an electric bicycle. I would not shy away from getting into stuff that you don’t know. And seeing if there’s an opportunity to apply the things that you do know, to those and energy is a very good example. When I was hired, I was a hired gun type CEO, brought in by the VCs. I’m not an engineer, but you don’t have to be an engineer to have ideas. So I wouldn’t let the confusion, the noise, the complexity associated with the energy industry and how it’s run and managed, prevent you from finding out more. And we also live in a golden age of not only computers but information and data. So anything you want to know you can basically look up and you can educate yourself, It is really a renaissance for learning as well. So the only thing I would encourage listeners to do is do something very, very different. I kind of wonder if some of the ideas that I had and some of my colleagues who also did not come from the power industry had, were because we were willing to ask stupid questions in an industry where you don’t want to sound stupid, right? So don’t be afraid to sound stupid. 

Materials, AI, and Decarbonization

Great chat with Greg Mulholland, CEO and Co-founder of Citrine Informatics as AI Platform for materials development. We discussed what the early days of Citrine looked like, how they powered through some low times, the massive opportunity of applying machine learning to applied materials science, whether cleantech was becoming mainstream for VCs, how data regulation like GDPR compares to regulation in the materials space, how MBAs can be a form of identity, whether we will see explicit geo-engineering and the potential of superconductors generating future noble prizes and more.

Here is the audio. Some excerpts lightly edited:

MCWALTER: What have you learned as most about hiring and retaining like high quality talent?

MULHOLLAND: The most important thing, I think, is that we’ve been really intentional about our culture from the beginning… A core part of our culture is willingness and ability to give feedback…  and we make it a point to lift each other up. And and I think those characteristics have really led to our success and retention because, people want to feel valued and they do on our team.


MCWALTER: It appears to me that VCs are chronically underrating cleantech; as Citrine recently raised a Series B, would you agree? 

MULHOLLAND: I think less and less, especially since Sequoia, I think sort of notably, announced that they believed that clean tech was the future and a really important investment thesis. All of a sudden, so much attention turned to our space. I would say we’re one aspect of being able to make the world more sustainable place, but I wouldn’t even characterise (Citrine) as pure clean tech. We certainly have some enterprise software bones about us.

You know, honestly, my experience talking to venture investors is that they understand that the world is changing and needs to be a cleaner, greener place. And there’s really no dispute about that. I think a lot of people have gathered that a lot of investors don’t spend a lot of time in that space. And so, often when raising our series A, but even occasionally in our series B, I had to explain to a venture investor controlling hundreds of millions of dollars or more, that the chemicals industry and the materials industry is actually a huge industry. And like, you know, sometimes it gets reactions “Oh, isn’t that a niche?” And it’s like, no, it’s actually, you know, a double digit percent of the global economy. And they’re like, “Well, I know what BSF and Dow and DuPont and 3M”. And then I list off another dozen or 20. And they’re like, “Well, I haven’t heard of half of those”. I’m like, well, all of them do more than $10 billion a year in revenue. And then I say and then there are the ones that do only a billion dollars a year in revenue and you can just see their eyes go wide because they don’t live in that space.


MCWALTER:  how does your kind of approach and model of the world in terms of decarbonisation differ from the proponents of the green new deal and similar approaches?

MULHOLLAND:I don’t know they differ in the long term view to your point. I mean, look, I I want everything to be recyclable, biodegradable, and green in every possible way from from cradle to grave, and entirely circular. From a policy perspective, I think a lot of people just sort of collapse clean tech into one idea. And clean tech isn’t one idea. I mean, you’ve got everything from power generation, which is on a lot of people’s minds. And I think the green new deal is a big component of power generation generation infrastructure behind it. And we don’t touch that, you know, I, I would love that for the grid to run entirely on solar, and maybe we’ll help invent new solar panels. 

At the same time, you know, I think there are a lot of regulators who had been asked to think about new materials and chemicals in the environment that don’t have full context on how things came to be, and how things might progress over time, in the shadow of certain regulations. And I think one that’s really interesting is you know, every once in a while, and particularly just before COVID, the European Commission and the European Union, were talking about banning plastics. And it’s like, well, okay, but here’s, here’s the thing. Almost everything has plastic in it. I mean, even the clothes we are wearing, have some synthetic materials in them, which sort of described succinctly are plastic in some way or another. And so this idea that we can, with enough government force and enough effort, rapidly remove certain types of materials from our world, is just nonsense. But I totally agree with the incentives and the pressure behind it. And so, you know, our approach is to say, look, because of regulatory pressure, consumer preference, the state of the world and so many other things we’re headed on inexorable march towards sustainability. In 100 years, the world’s either more sustainable place, or it’s roughly gone. And, in my view, tools like Citrine’s are simply an accelerant on our ability to make progress against those goals


MCWALTER: Thinking about like Elon Musk’s various ventures, which will have the longest lasting positive effects ?

MULHOLLAND: I just think Tesla is incredibly exciting short term. They’ve totally turned heads and changed minds with respect to electric cars. I actually think SpaceX is going to have a longer term impact though, because democratising access to space, whether it be for satellites or travel is going to really, really transform how the world approaches things. And you can already see the price pressure of SpaceX changing the dynamics of the space industry, which I think yields enormous opportunities regardless of what types of cars we’re driving.


MCWALTER: Was there anything that I should have asked you about but did not?

MULHOLLAND: I have I think we’re getting close to some real interesting breakthroughs in superconduction. I don’t think we’re going to have commercializable room temperatures superconduction anytime soon but I do think there’s some really cool technology coming around how we control power and how we are able to flex the grid. As we as we learn more about how to control the electromagnetic spectrum around us, I think we’re going to develop new exciting products, but also a more efficient world. And fom a materials perspective, that’s something I’m really excited about, and it’s still fundamental, but I think it’ll be transformational when the time comes. Probably years away but but still transformational.

Learned alot from Greg!