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.