Great to chat with Jan Heinvirta Co-Founder at Perfekto, a company that wants to change the broken food system by giving consumers access to edible food typically lost due to things like cosmetic imperfections! We discussed the problem of food waste in LATAM, the demand for imperfect produce, his experience at YC, the experience of delivering food boxes in Mexico, how they are thinking about raising capital and more!

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Thanks so much! 

James

The unedited podcast transcript is below

James McWalter

Hello today we’re speaking with Jan Heinvirta co-founder of Perfekto, welcome to the podcast Jan! Brilliant Could you tell us a little bit Perfekto.

Jan Heinvirta

Thank you very much for having me James.

Jan Heinvirta

Of course. So essentially what we do at Perfekto is we aim to reduce food waste in Latin America We do that by offering a subscription box of imperfect produce. So that means that ah.

James McWalter

Bowed Perfekto.

Jan Heinvirta

Weekly or biweekly. You will get a box sent directly to your home that includes fruits and veggies that might look a bit odd so maybe a bit bigger bit smaller than your usual produce at the supermarket or even out of shape out of color and whatnot.

Jan Heinvirta

Can also be because of our production so sometimes to perfectly normal and that’s um, what we offer with an aim to reduce the problem in Latin America since 54 percent of all fruits and veggies in the region end up wasted.

James McWalter

And and what drove the initial decision to start perfekto.

Jan Heinvirta

Well, it was a bit of a personal motivation I would say um during my time in Switzerland studying international management. Um I worked in a lot of restaurants as a waiter and I saw the amount of food waste that occurred. Every day and it was quite heartbreaking because it was such amazing food cooked by 1 of the best chefs in the country and we just had to throw it away. We weren’t even allowed to take it home and it was something that bothered me a lot at that time took it to go launched in switzerland.

James McWalter

Right.

Jan Heinvirta

Which is essentially an application to save meals from restaurants at the end of the day. So I really fell in love with that model. Um, ultimately I went to Mexico for an exchange year then worked that a swiss fintech helped him to expand to mexico. So. Food waste problem went away a little bit and then last year I was like I need to do something against food waste. I mean there’s something I want to be part of of the solution somehow and.

James McWalter

I.

Jan Heinvirta

Decided. Okay, why not adapt the model from tiga to go to Mexico so I started working on that I had a first prototype and then ultimately when I found my co-founder we decided to actually pivot to what today’s perfecto so it was a little bit of a process.

James McWalter

That that’s fascinating. So what was that first version and I guess what were the reasons to pivot. So.

Jan Heinvirta

Yeah, so that first version was a really um, very ugly looking prototype that I um built using a nocode platform. So I’m not really a techcky. Um, but I love to get my hands on and. So I so I built a prototype with ah with a nocode platform then showed it to restaurants to potential customers. Got their feedback and yeah I I started to see that were that were a lot of cultural issues on 1 side.

James McWalter

And.

Jan Heinvirta

Um, of why this model will not work exactly how it does in europe um, starting with the fact that we don’t really have a takeaway culture in Mexico whereas you certainly do in europe um, and then also when my cofounder anie joined joined me on this journey.

James McWalter

Right.

Jan Heinvirta

Together We realized that in Latin America Most food waste actually happens across the supply chain not at the consumption level which is the case in Europe and the us. So we also realized that if we really want to have a big impact. We need to focus on the big problem.

James McWalter

And.

Jan Heinvirta

Which lies in the supply chain.

James McWalter

And yeah, so Interesting. You know I think a lot of um, you know founders make the mistake of building more product than they validated it and so you know a system that our model that worked elsewhere. You’re like oh I can just plug and play this here. It’ll be completely fine and there’s no problems whatsoever. But then you just bring it to see the market and all of a sudden you you get? ah you know feedback pretty rapidly was that your kind of experience.

Jan Heinvirta

Exactly Yeah, that was that was pretty much that right. We saw that a lot of restaurants were kind of reluctant as well to speak about food waste. Um, others who were willing to talk about it. Ah.

James McWalter

And.

Jan Heinvirta

Told us they already had solutions for it. So They maybe donated to the church they donated to people on the streets right? So We we kind of found out that it’s not really that urging in our Opinion. Um. And also like for for people they were saying yeah I would need to have a delivery option right? So you would need to deliver that to my door now imagine you give and ah a meal already fifty percent off then you still have to do a delivery like economics else. It just didn’t make much sense.

James McWalter

And right.

Jan Heinvirta

And also um, what we saw is that annae actually for some context she worked at Uber at that time and amongst other things also Uber eats and so she knew that exactly at the end of the day was often when the restaurants were.

James McWalter

Said.

Jan Heinvirta

Um, getting a lot of traffic. Um via the platform because it’s when people order at home to eat dinner and with the model of 2 good to go. The idea is that at the end of the day you pick up what was not sold right now. There is a big a bit of an overlap.

James McWalter

Right.

Jan Heinvirta

Because you’re essentially taking away the opportunity to sell this food at a better price for the restaurant. Um, if if you make them sell it via this platform to rescue food waste. So It’s of course it can work right? But it. There were so many things that we saw that it will be difficult while understanding that there is the big problem is not there that we were just like okay we have to change how we approach it interestingly enough since the beginning we were thinking. Okay, this too good to go model will just be the beginning so that we.

James McWalter

Okay.

Jan Heinvirta

Can then go into grocery delivery right into into other areas where food waste occurs and so we essentially just decided to skip this ticket to go part and go directly into the supply chain. Um, also because.

James McWalter

And.

Jan Heinvirta

And nais father is actually a citrus producer here in Mexico and so as we were progressing and talking about the conversation about the problem she remembered how her father always came home with boxes of um.

James McWalter

I am.

Jan Heinvirta

Of lime of Mandarins right? that he wasn’t able to sell to restaurants because they were too big too. Small this this colored maybe too many seats right? So she remembered that that is a real problem that she even experienced herself and yeah, so that’s how we. Ultimately ended up with with perfecto.

James McWalter

Yeah I guess that you know very much resonates with myself so you know I mentioned before that we grew up my family grew on an organic farm and we sold boxes of vegetables and the vegetables we ate were the you know the carrots that hit the rock and became ah. You know, quite funny looking shaped carrots and so on and that’s what we ate every day because we had to sell the nicer looking ones at the Farmer’s market

Jan Heinvirta

Ah, yeah, exactly exactly So we we we heard that already like so so many times it’s really cool to to see that our assumption was was right? it was This was very um. Yeah, it felt good to know that other people who grew up in farmer families. Um had the same experience and and that it is indeed a big problem that we can help solve.

James McWalter

And so you’re looking at this. Ah you know the value chain so you have the farmer who’s growing the produce you then have this kind of production line right? That’s getting the produce you know, washed or processed in some way and then eventually it gets to the distribution whether it’s a restaurant or whether it’s you know. The the supermarket all the way into people’s homes or into people’s bellies depending on on the stage and so now that you’re kind of looking further up that that value chain. Um, how did you kind of start to kind of talk to those people What you know what were the initial kind of Mvps in that space.

Jan Heinvirta

Yeah, like in in the beginning we wanted to have it as simple as possible. We were both still full time in our day jobs and operating a logistics company at the end of the day while having a full time job doesn’t allow you to operate it at night right.

James McWalter

Sharp.

Jan Heinvirta

Um, so we were looking for the easiest way to do it. So what we did was we approached other grocery delivery companies so companies that were already delivering fruits and veggies and try to figure out what they do with their.

James McWalter

To her.

Jan Heinvirta

Imperfect produce and we found ah 1 that was open to share more information with us with whom then ultimately we started a pilot where they sold us all the produce that they were not able to sell to their customers because of. Um, physical appearances and that was how we got started to actually first prove that their hypothesis was correct that people are open to buy imperfect produce or not perfectly looking produce.

Jan Heinvirta

And once we we had that um proven we had to to see how can we offer a price that is also fair and accessible. Um, because at that time the prices were quite high since we were getting it from that intermediary and. What we did was we started to talk with farmers and especially Mexico with sellers at the central de abastos which is a sense essentially like a supply center. So it’s a concept that is very common in latin america you get it in in most major cities where. Concept is that it’s a place in the city where all the farmers and disbutors bring their produce and then sell it to wholesale right? Um, so we went there talked with the sellers and producers that had stands at the Central de devastos.

Jan Heinvirta

And try to understand whether they also bring produce that is not always accepted by the traditional Market. We found that it is and so we started to just switch the supply to them and yeah it was a continuous process. But. I would say given that we have this concept of the supply centers in Latin America It was actually much easier than you would expect um to get a lot of different produce because the challenge that we saw that we see for example in the Us is that you often have to source directly from Farmers. If you want to have a ah decent catalog. You need to open up different logisticals.

James McWalter

It yeah, it’s finding the aggregation of supply is like the struggle that so many marketplaces have right? you know and your your cofounder worked at uber and you know their original model was you know the City -by-city model and then looking how to aggregate at let’s say you know an urban kind of city by city level.

Jan Heinvirta

Exactly.

James McWalter

You know you’d have to build all the relationships freshly every time you’d launch and if there are already this existing framework for the aggregation of those of that potential supply like absolutely it makes a ton of sense How to kind of jump on that I Also think it’s like such a clever way to target the companies that potentially are your future competitors. Um, who’ve already sorted a lot of the kind of Upstream problems out and so because really what you’re just trying to find out is like will somebody accept this box of veggies. You know on the demand side and like if somebody’s already done all this splye side Piece. It’s like okay we can figure that out later you know Demand generally is is.

Jan Heinvirta

Um, yeah, will.

James McWalter

You know you always find supply for demand typically right in most marketplaces. Um, so speaking to that kind of demand side. How did you kind of validate that side of things and.

Jan Heinvirta

Well what we did is and what it was quite organic I have to say um we went with the approach of instead of having a lot of interviews with potential customers. We said let’s just launch it.

James McWalter

I.

Jan Heinvirta

And and see what happens because at the end of the day we had some validation of the model already from Europe and the us where you have similar um very similar models like imperfect foods like misfits or oddbox. Um, and so we said okay the the possibilityies that.

James McWalter

Sharp.

Jan Heinvirta

It finds a market in Mexico is relatively high, especially now that grocery delivery is on the rise in the region. So we just launched it. We did an Mvp with a nocode platform as well. So we built the website integrated a few tools used google sheets and. Um, launch it at the end of January um, sold it to four friends so got them on board as first customers they shared it on social media and then from then from them. It started to grow organically so already in the second and third week we had the first customer that we didn’t know. And it started to grow like that. So by the end of February we already had like certainly one third of customers that we had never heard of them right? and so it. It’s really started to grow like that. Um quite organically like a word of mouthuse and that basically validated that there is.

James McWalter

So amazing.

Jan Heinvirta

And Interest um to to help reduce food waste and to buy these produce. Um, and now it was just about seeing how we can scale that right.

James McWalter

So and I guess yeah you, you’re still working these kind of full-time jobs you and your kind of cofounder and it’s like oh you’re starting to see that growth rate. Um at what point you’re like okay now now is the time to kind of go full time on this. Okay.

Jan Heinvirta

Well I guess we already had talked about that before we even started it um or let’s say when we were still at the other idea the initial 1 Because when I looked for a co-founder I actually had quite a rigorous process that involved many questions and 1 was it super.. It was super tough but it was very worthwhile because I’m super happy to have found that a and we got along perfectly. Um, and.

James McWalter

And it’s tough.

Jan Heinvirta

1 of the questions was under which so circumstances we go full time right? And so in my case I had already taken the position come? What will I will go full time by March right? because I had already decided I will resign my job. I want to do this full time be at this idea another 1 whatever happens I I wasn’t happy anymore in my previous company so I was going for a change anyway, um, in Annae’s case what we said is okay if if we see that we can work together.

James McWalter

So chirp.

Jan Heinvirta

And we believe that we’re onto something then she would resign around aprima may of of the year right so we had ah established some sort of timef frameme but we had else established what happens if not. So. That’s why um, when we saw that there is growth the decision to to leave the job for her was already very easy. Um, on top of that we just got accepted into why see the month where she resigned so it it all worked played out very.

James McWalter

Yeah, and I’d love to because you mentioned Ii What was that kind of experience like I believe you’re in the batch. The most recent batch. Um, and yeah, what was I guess both the interview and and that kind of process and then the actual being in the cohort itself.

Jan Heinvirta

Very well.

Jan Heinvirta

Wouldn’t.

Jan Heinvirta

Sure, um, so we at the beginning of this year we had kind of mapped out when we would want to start fundraising or preseed round and also like what accelerators we would be willing to participate in right.

James McWalter

And.

Jan Heinvirta

Because um, there are a lot of accelerators that take just too much time. Um and away from the founders and might not really give too much value for what you got um and so of course Ysi was 1 of the accelerators that we had on the top of our list of where we want to be in. However, when we applied we had like ferdy customers so we were like ah there’s no way they they’re going to be interested in us. But hey let’s give it a shot. Um, so we we did prepare our application Super Well. We got a lot of feedback from founders that were kind enough to to help us out.

James McWalter

Sure.

Jan Heinvirta

So x y c alumni and we applied one month later we got the interview so we couldn’t believe it and by then we had think 60 customers or ninety customers something around that we had the interview which was ten minutes um Rapid fire questions again, we had a few x y alumni that were kind enough to help us prep for the interview. Um, and it it paid out right? So we had the interview then we didn’t get any answer until like Eleven zero p m in the evening so we had already given. Ah, yeah, we were already certain that we we didn’t make it but then we we got an email hey we would like to manage to join y c and let’s have a quick call and we were yeah we were out of our we couldn’t believe it right? So we were super happy. Um.

James McWalter

Right.

Jan Heinvirta

And so that was around April I think and then the batch started in June july yeah july and night june sorry and and it was a great experience I mean.

James McWalter

And.

Jan Heinvirta

Our batch was remote as well and they probably will continue to be remote and this certainly has its dropbacks because of course you want the full I see experience of being in San francisco seeing all these amazing advisors founders partners in person.

James McWalter

M.

Jan Heinvirta

Bonding right? So unfortunately we didn’t have that opportunity. Ah, but on the flip side. It was also a big benefit because that meant that the cash that we get from Yc we can actually use it for the company. Not for the flights and the accommodation. Um.

James McWalter

And it goes a little far outer in mexico.

Jan Heinvirta

And yeah, and also um, since at that time it was still just me and Ana the team like we were making the deliveries we we were picking the boxes we were um. Making the orders right? So It was all us so we we anyways couldn’t have gone to San Francisco because who would deliver the boxes. So at the end for us. It was actually beneficial that was remote and and yeah, so then it was like 3 months of.

James McWalter

Um, ah.

Jan Heinvirta

Ah, the pro of program with the demo day at the end and yeah, can I say it’s it’s It’s a very very valuable and unique experience. Um, you learn a lot of course it’s very inspiring as well because you get to hear from founders like. Brian Jesky from Airbnb right? The founders from from Stripe from Gitlab So it’s it is really inspiring as well and what I liked the most about it is it on 1 way it puts you in a mood Of. Um, being fast right and and and seeing how how you can um, be faster than anyone else and and just launch and test and launch and test. Um, but so it it sounds very stressful. It is stressful.

James McWalter

So.

Jan Heinvirta

But at the same time they go a lot into the mental. Well-being of being a founder so it was very helpful to hear from successful founders How they had the same fears. They had the same doubts. They had the same issues right? Um, they had sleepless nights and and and and get to getting to hear that from from someone who is now already with a company that has done its ipo and has done super well.

James McWalter

Mother.

Jan Heinvirta

Is very comforting and and gives you some mental peace that even if shit hits the fan. Um, it’s normal right.

James McWalter

You right? And honestly, if it didn’t right? You’re probably not taking enough risks right? You’re not like pushing pushing and you know the business and in the right kind of ways I get is this a couple of really fascinating parts that that and thank you for telling that story. Um, you know.

Jan Heinvirta

Exactly.

James McWalter

Would I absolutely agree a lot of accelerators are a bit of a mixed bag and I think like the best accelerator is you know tech stars y see I guess you know 500 startups a couple others they’re very very obsessive around. Um you know showing how their program like ah makes a specific portfolio company actually.

Jan Heinvirta

Okay.

James McWalter

Become successful right? I think like the fascinating thing about yc is like they always said no to co-works right? whereas like a lot of accelerators. It’s like oh the first thing we do is throw everybody into co the cowork together and it’s like well you know we want people kind of interacting but like if they’re all just like looking over each other shoulders. You know it’s more distractions than focus I also think you know your story is quite fascinating. We had a ah.

Jan Heinvirta

Yes.

James McWalter

Yeah, know another guest on the podcast but six months ago and she’s working on a um, yeah, ah cell-based meat startup and they’re based in canada and basically they got into yc and they were like absolutely delighted that it was remote because it wasn’t remote. They couldn’t have done it because they needed to be at their lab you know developing the product very similar to you guys.

Jan Heinvirta

And hit.

James McWalter

If if you were there like your business literally stop and like the the target of like this week over week growth just wouldn’t have been even realistic and so I think as y c becomes more atoms orientated versus just pure bits and like as yc has more of ah like an effect in the real world. Um, keeping a remote I think makes a ton of sense because otherwise you’re going to miss out on like founders working on like. These mega mega problems that are you know Ah the atoms of of of you know that have atoms of as a framework rather than just bits.

Jan Heinvirta

Yeah. Yeah, and also like it. It. It is makes it also more inclusive because you can see that now they’re investing in more Latin companies. They’re investing in more African companies right? So it. It makes makes it I think elsea more inclusive. Um, the fact that they can now invest in companies that might wouldn’t have the opportunity to come to San Francisco for whatever reason also mainly because of the business model itself. But but yeah I think that’s that’s a great thing about it and just something that I wanted to add also regarding the cowork. Right? Not that it is remote still a lot of people want to socialize with the batch right? So They actually maintain this advice of telling you hey we know you want to make acquaintances with other people in the batch. But hey keep it for the end of the batch focus now on just your company. Um, that’s that like listen to your customers build product. That’s that’s what you need to do right? Um, so they they.

James McWalter

Correct.

Jan Heinvirta

Continue to instill that in in everyone.

James McWalter

No, Ah, but that makes a ton of sense and like it’s going back to kind of Perfecto. You know when I think about this kind of connection between you know, perfectly. Good food that is just being wasted because of various kind of aesthetic standards. Um. You know there’s very very much like a trust component into that right? and so the consumer has to trust you guys that you know you have maybe a different aesthetic standard. Um, you’ll accept things that look ugly but the quality standards are still there. How do you kind of communicate that trust and build that trust in your consumers.

Jan Heinvirta

Yeah, um, it’s a good Question. So I think at the end of the day The best way for them to see um that it’s not bad at all and to trust us is via word of mouth right? And that’s how we have grown so far. Um. Because someone they know tried it. They liked it. They didn’t see any difference right? Also for many people. It’s just obvious takes just never thought about that. This is actually a problem. So Sometimes you just basically hit the switch. And people’s mind that hey yeah, makes actually sense like of course not everything will come Perfect. It’s nature right? Um, and then also um, it’s It’s a lot about how we Communicate. Um, so we try to have a very friendly. A very transparent communication. Um, to to also always be available if they have questions so to really be close to the customer. Um I think that helps as well and now ultimately the other thing is that what’s just important to note, it’s It’s not everything is ugly looking though.

James McWalter

So.

Jan Heinvirta

Right? So sometimes looks perfectly fine. Maybe it’s just the size or it’s even just because it’s over of overproduction right? So because 1 of the biggest issues. Um in in the food waste. Um, sphere when it comes to produce is because of overproduction.

James McWalter

And.

Jan Heinvirta

Which happens especially with seasonal produce and since consumers have been kind of yeah let’s say custom that they can get mango all year long the demand started to switch right? and now they want. Mango when it’s not mango produce and so instead of consuming the produce that would actually be in season mangos being imported or being created in in in How do you say that in in in yeah and these temperature cultural houses.

James McWalter

Yeah, so bankers are producing like greenhouses.

Jan Heinvirta

Um, exactly thank you and and so that’s why also with us you can actually only get seasonal local produce So We we only sell Mexican Produce. We only sell season of produce exactly because sometimes the produce. Ah, you will get might not be ugly looking but it might be um, saved So So so to say because it’s in season and there was too so much produced that we need to so switch Swift Shift The demand to that produce.

James McWalter

Oh.

James McWalter

Right? Yeah, no absolutely you know it. It is this kind of funny development or a funding development but coming you know coming out of world war 2 right? There was like this big move to a certain type of kind of consumption pattern you know in the developed world and that that had a.

Jan Heinvirta

Hope that makes sense how I explained that.

James McWalter

You know, whatever you want, you can have it. Um, you know at a certain price and that might make sense for a t-shirt but that kind of fed over into the food system and so you know Mangoes literally grow on trees all over around Mexico I’ve seen them fall and they can be bit annoying if you live outside of maggotree and they’re like all over the ground sometimes there.

Jan Heinvirta

Yeah.

James McWalter

Um, so have too many mangoes. But yeah, but as you say like they don’t grow and and they’re not harvestable all year around and so you know I guess it’s like eat strawberries the other times a year eat something at bananas the other times a year and just basically start to adapt our palates to having you know more of a variance over time and I think like you know, culturally that.

Jan Heinvirta

Well.

James McWalter

How a lot of food has gone. You know you eat certain types of food at certain times a year and the reason why people have pumpkin pie in the United states in you know october november december is because that’s when the bumpkins are ready and the reason we don’t eat them in March is because they’re not ready then and I think I think returning to that? um actually has a lot of like positive kind of you know effects from like a social.

Jan Heinvirta

Next.

James McWalter

Point of view because we start to get get into these kind of seasonal thoughtss and those kind of seasonal patterns are connected to these different types of events in our lives you know holidays and so on and so what’s what’s the kind of primary business model. Are you taking? um.

Jan Heinvirta

Um, totally totally.

James McWalter

You know is it a slice from on the consumer side or on the demand side and how are you balancing that because in any sort of kind of Marketplace dynamics. You know there’s always this tension between growing fast making sure that there’s a business to be had um on the. Yeah, on supply side in particular but then also you know making sure that you have enough of a cut and enough of a margin to like maintain your own growth.

Jan Heinvirta

Yeah I would say it sounds important to to to mention that um, we’re not like a marketplace model like for example, uber eats or or something like that right? So we actually first buy the produce and then sell it so well. Basically.

James McWalter

I chirp.

James McWalter

So.

Jan Heinvirta

Right? So get let me get more into detail with that. So how it works is that you subscribe to perfecto you might pick five Kilogram Box fruits and badggies. You might want to choose what produce you have in that box and might add it then weekly to your door.

James McWalter

No.

Jan Heinvirta

So you sign up. Um and your order gets confirmed. Let’s say your delivery day is every Monday because we actually don’t have an on the math approach. We’d rather take a slow shopping approach and that allows us to further reduce food waste. Because by having this planned week. We know exactly the day before so in this example on Sunday what we need to buy for Monday and so according to the orders of our customers. Um, we’ll create the order list on Sunday evening and then.

James McWalter

Chirp sure.

Jan Heinvirta

Monday early morning our buyers go with our suppliers buy what we need for that day and then bring it to our fulfillment center pick the boxes and send it to the customer the same day. So that means um in our model. Essentially we don’t take a cut.

James McWalter

What.

James McWalter

Sure yeah.

Jan Heinvirta

From from either right? So um, we we buy it and then we so we we sell it at the at a higher price um to cover our costs. Yeah.

James McWalter

And that that but that makes make sense and then the that communicative piece as you’re kind of scaling up on the supplier side. So how are you? You know you have your list. You know we’re trying to have this many boxes you’re going to you know Central to abeto sort are similar and. Trying to find you know those suppliers now that they know you a little bit. Are they starting to put aside boxes with the knowledge that perfecto you know that’s a perfecto box versus a different type of box.

Jan Heinvirta

Yes, yes, some actually already do that. So that’s super cool to see especially with the banana suppliers because actually it’s just received my box so on the podcast. They might not be able to hear it but I’ll show you? um so we got what I’m showing.

James McWalter

M.

Jan Heinvirta

Right here is a banana that is single and so what happens with bananas that are not part of a bunch but are single They don’t get sold to supermarkets because supermarkets only buy bunches because it looks better. Um, it else has some it if they’re part of a bunch. It will also um.

James McWalter

Button.

Jan Heinvirta

Live a bit longer and and so it’s expiry takes a bit longer. But yeah, so the banana sellers. For example, they always have a box ready with single bananas. Um for us because they know that we will buy these from them. Um, so they won’t go to waste.

James McWalter

M.

James McWalter

Yet so fascinating just the experience in a supermarket and how the I has been. You know the average consumer and I’m guilty of this is well as well. Of course has been trained to expect certain things and so bunch of bananas. Absolutely um, you know we already mentioned perfect carrots but then something like Ginger which is like a kind of a messy looking.

Jan Heinvirta

In.

James McWalter

Object We don’t mind that that looks a bit random and and you know skewed all around and so like we’re completely fine with picking you know, quite ugly looking Ginger next to like perfectly you know, orange, clean carrots and I guess a lot of it’s just moving people into this you know I got an understanding who.

Jan Heinvirta

Exactly.

James McWalter

People who if you didn’t grow up on a farm you just wouldn’t know otherwise that like these things come in all shapes and sizes and so on.

Jan Heinvirta

Um, totally yeah, so it’s but I think we’re guilty of it all everyone right? Um, because most of us just grow up with that and that’s how. 1 side. It’s a consumer’s fault on the other side. It’s a bit of Supermarke’s fault as well. Um, but I mean if you go to a supermarket and you see a perfect looking carrot and then a very weird looking 1 possibility that you will go for the best 1 best looking 1 is quite high I mean how many of us. Go to supermarket now always try to look for the nicest looking apple right? So that’s why everyone like touches down put some back touches then put some back right? So um, yeah, it’s it’s something that happens. Ah that happens to all of us. It’s just about changing a little bit this yeah just this habit and so that also supermarkets can change what they supply because they will continue to only buy the most perfect looking produce.

James McWalter

M.

Jan Heinvirta

If they see that they’re not nice looking wealth 1 is not being picked by customers right? So it’s else a little bit on us to change it so that supermarkets can change.

James McWalter

No.

James McWalter

Makes a ton of sense and then looking out over the next. Let’s say year so like what are some of the goals you’re trying to reach over that timeframe.

Jan Heinvirta

So I would say now we really want to. We really want to close some of the issues that we had so far on the tech side. Um, and now so implement some of the feedback that we had from our customers.

James McWalter

No.

Jan Heinvirta

Um, really to to be able to get to a point where we can say okay, we think we found product market fit fit right so that we can really start scaling. So now it’s about first um, ironing out all the the issues that we that we’re seeing um, we just raised the.

James McWalter

A.

Jan Heinvirta

Preeed 600000 dollars. Um with that. We also want to expand the team. Um and to to expand to a new fulfillment center as well. So that we can actually handle um more more orders. And then over the next year we will certainly start our seat round within the next six months so that we can raise money to go to the next 1 or 2 cities in Mexico so this will be 1 important part to to go into new geographies. But at the same time.

Jan Heinvirta

We want to go from only offering produce to also offering other grocery items. So the reason for that is that food waste of course doesn’t only happen with fruits and veggies. But also with consumer packaged goods and we saw that.

James McWalter

No.

Jan Heinvirta

It happens quite a lot there for quite stupid reasons like for example, short shelf life. So to give you an example supermark market might not accept accept a chocolate po anymore because it only has one month left of expiry until it’s expiry date but it’s still one month right and even after it expired date.

James McWalter

Here.

James McWalter

Ah, sure.

Jan Heinvirta

Most chocolates are still fine. So that’s 1 part where we want to help reduce food waste another is like damaged packaging labeling errors etc so we want to. Start including these items to reduce more food waste but at the same time to offer more products to customers and um, we nevertheless want to also kind of become a sustainable grocer similar to good acts. Maybe in the us.

James McWalter

Okay.

James McWalter

No.

Jan Heinvirta

Um, might be a good reference because we know that maybe we cannot rescue milk every every month um so but you might still need milk every month so we want to make sure that we at least have a sustainable alternative ready for you in case, we don’t have a rescued product. And that’s how we plan to to grow our catalog to not only offer you fruit emergggies but really all kinds of groce grocery items that you need on a recurring basis.

James McWalter

That that that expansion makes a ton of sense to me. Um, you know we’re talking a little bit offline but and I don’t know if I’ve mentioned as much on the podcast but I lived in Mexico the last few years and you know the scale of opportunity in Mexico is is quite massive across pretty much and any type of startup or problem you want to solve.

Jan Heinvirta

Yeah.

James McWalter

Um, you know some companies are doing a great job. You guys are up at ah at an early stage in your journey. But there’s just absolutely ton of opportunity. You know in a country with the population of Mexico and then and the city’s there and so yeah, you know, expanding it out of mexico city. Um. Yeah mexico city is what 3 times population of ireland right? you can have quite a nice market there before you kind of go on to guadalaha etc. Um, and so that makes us all of sense of my.

Jan Heinvirta

Yeah, yeah, the the opportunities are really almost endless right now. So and now finally there’s also a lot of capital flowing in from investors was a very recent. Development because like I’ve been here now for over 4 years and when I got here working at the al startup fundraising was super tough here like there weren’t many funds us funds european funds were almost not interested in the region.

Jan Heinvirta

And now just completely changed now. Latin America Mexico is super hot um a lot of E Cs are trying to get in and that of course helps the ecosystem incredible in an incredible way because there have been so many companies popping up um now finding a lot of unicorns and exits. As well which is helping the the ecosystem grow. Um, and now finally a lot of problems can be addressed by by entrepreneurs who who want to make a change right? because the thing is before and you had this big. Um, national companies almost conglomerate that were leading and in several industries but giving a shitty service. So um, it’s great that now there are coming a lot of alternatives coming up um in in all verticals.

James McWalter

That’s ah makes a ton of sense. Um and looking at your background. You know I believe you grew up in Rural Switzerland and Mexico City is as far away from Rural Switzerland as possibly 1 could Imagine. Um. You know what?? what? What are the some of the things that I guess have surprised you from like a kind of culture point of view but pros and cons.

Jan Heinvirta

Yeah, certainly a lot. Um I think the first thing as a swiss I have to say is when it comes to time. So as you know we swiss are obsessed with time. That’s why I have so many.

Jan Heinvirta

Watches and so in swit turn. Everything is super punctual right? So if the train is 2 3 minutes late. There will be an announcement made to tell you hey the train is late 3 minutes right? So it’s yeah and so and.

James McWalter

As as it should be as there should be.

Jan Heinvirta

And that entire dynamic is of course very different in in Mexico so was 1 of the first things that I had to um adapt to and learn that not everything will always be on time. Some things might take a bit longer and you have to calculate that. In not just in your private life when you go to a party right? Um, but else in business because in in in in private life. For example I mean my in in the beginning when I was invited to a party they said? Yeah, we see us at apm and my place so I show up 7 55 right? um.

James McWalter

Right.

Jan Heinvirta

And they’re like I haven’t even showered. They’re not even ready like hey why are we already here. Yeah you said eightpm? Yeah, but no 1 shows up at 8 pm and so and in business is it kind of works similar in a way that you have to understand that if they if they expect a time that it might take to get a license because. Especially now Mexico fintech licenses very is a big topic if they tell you yeah it takes you 6 months? Yeah, forget about it might take may take longer so you need to calculate it in because if you if you think that everything work will work out as smoothly as.

Jan Heinvirta

In in a country like Switzerland where time is very well calculated or taken into consideration then this can really kill your business right? because if if you say okay in six months we will achieve this so I will I need a runway of seven months. Yeah, maybe that won’t work up right? so. It’s important to calculate in these buffers and I think for me time 1 is 1 of the biggest topics.

James McWalter

Yeah I definitely appreciate that I mean ireland is not as ah, not as strict as Switzerland but I’ve also shown up at the at the early party I’ve also helped them get ready because there’s nobody else there. Um, and and so on and and yeah I think the the point about Runway is well-made you know. When you’re raising. Ideally, you’ll always try to have you know six months spare runway potentially before before you get to the end of that trench of funding. But yeah, if if you have to add that bit of leeway then that can take even longer.

Jan Heinvirta

Yeah, equally um at the end. Not really I Really ah liked the questions you made and maybe just to.

James McWalter

Ah, yeah, this has been great I’ve really enjoyed the conversation before we finish is there anything I should have asked you about but did not.

Jan Heinvirta

Give a little um plug there like we will be raising in the next six months. So if anyone is interested in in the opportunity. We’re happy to start scheduling first meetings we already have the first 1 set up. So if you want like early access. Got to know about the the opportunity happy to talk about it and also if you’re in Mexico feel free to reach out always happy to to help people got to know that mexico city um to appreciate the beauty and and then hopefully also help.

James McWalter

Yeah, need some delicious ah delicious veggies and and soon to be delicious other things as well. Thank you very much john.

Jan Heinvirta

Grow the ecosystem.

Jan Heinvirta

Exactly exactly Thank you so much.

Great to chat with Lizzie Horvitz, Founder at Finch! Finch is a tool that educates people on the ins and outs of sustainability by turning complex scientific facts into simple, actionable insights! We discussed sustainable choices while shopping, how Finch will be able to help you choose better products at Amazon, the sustainability paradox, the greenwashing behind packaging and more! 

https://carbotnic.com/finch

Download Podcast Here: https://plinkhq.com/i/1518148418

Remember, If you want to support the podcast there are two amazing ways!

1. Subscribe to the Carbotnic patreon  
2. Rate 5 stars on Apple

Thanks so much! 

James

———————-

The unedited podcast transcript is below

James McWalter: Hello today we are speaking with Lizzie Horvitz founder at Finch. Welcome to Podcast Lizzie. Brilliant I supposed to start with it. You tell us a little bit about Finch.

Lizzie Horvitz: Thanks! Both so much for having me James. Absolutely, so Finch is a platform that decodes products environmental impacts to help consumers make better purchasing decisions. So We rate products based on their environmental footprint and then. Incentivize consumers to switch products based on what scored Higher. So I’ve been in the sustainability space for my entire career passionate really about climate mitigation in the private sector.

James McWalter: And what drove that initial decision to start finch.

Lizzie Horvitz:  And something interesting started happening in around 2 16 I started getting a ton of questions from family and friends about their own purchasing decisions. Everything from you know I just had a baby. What diaper should I be buying to ah, what’s this ingredient doing in my deodorant and. I’m 1 of the only people in my larger community who has an actual background in this and not even I knew all the answers and I didn’t know where to direct people I found that the content online was very difficult to sift through because you had these wonky academic papers that were not meant for normal people to read and then you have this rise of bloggers who are. You know, hugely. Well-intentioned but saying things like all natural and eco-friendly and that doesn’t really mean anything these days and so I started a newsletter basically aiming to distill this type of information and that newsletter kind of took a life of its own I meanwhile left unilever. Ah, massive massive company to join a startup and completely fell in love with entrepreneurship taking a company from inception to scale and decided that this newsletter could actually be be my own startup and that’s when I decided to to do it full time.

James McWalter: That’s so fascinating like I guess you know what was the ah the lead up to that decision right? like you’re looking at your maybe subscriber numbers kind of jump up and like oh ah, like yeah I’d love to like what what were the few weeks before you made that jump look like.

Lizzie Horvitz:  So interestingly you know the newsletter was popular among the readers but it was a total side project I was probably posting once a month and it was honestly just people that I knew maybe a quarter of of the subscribers were were forwarded from a friend or something. But. It wasn’t really the numbers. It was just what what are all these people doing who don’t have me on their speed dial. Um, and so personally in my mind I was thinking about how can we democratize this type of information and bring it to people who didn’t have a degree in this or who don’t want to spend thirty minutes a day researching. Um. Meanwhile what was going on in the world was covid was just starting this was March of 2020 ah, and you know obviously at the time we all thought that that might be a couple weeks setback and now look where we are but um. The company I was working for was based in Asia I knew at that time I was pretty locked down in the United states was not planning on moving to Asia anytime soon and was just really looking to to switch gears and take the skills that I had learned in this very intense startup space into my own and so I decided. To to shift and and really do this full time and covid was honestly the best time to start a company if we could turn back time and I could tell everybody to start their their company during that time I would because you know everybody was stuck at home looking for interesting things to talk about or do and so I was able to capture all of these. Fairly important people where I just cold called emailed everybody saying do you have fifteen minutes to let me run run this idea by you and everybody said yes, please I’m dying to have some sort of stimulation and so I was able to really um, bake that idea. Fairly well and in the first couple of months and I think under normal circumstances that would have taken several months.

James McWalter: Yeah I kind of agree more I guess yeah I was actually also planning to like leave previous company I was ash and I was like March twenty twenty 1 that was like the kind of rough date. You know it like a year before I was planning to leave and then covid hit and it was like oh this is actually a remarkable time to leave early in za coming exploring startups. I started this podcast like a month into covid because it was like oh you know there is this kind of great leveling of the types of people you can talk to as well. You have to go you used to have to go into the Bay area or certain kind of parts of the world to talk to people like investors and so on and then all of a sudden Everyone’s just on the other end of ah of a zoom and it just ah massively enables. Um, yeah.

Lizzie Horvitz:  Exactly.

James McWalter: Certain types of connection. Maybe not the world’s deepest connection but lots of kind of light connection and so okay, so you kind of you know, decided to kind of start this and so as you were trying to think through like what a potential product could look like to kind of respond to this problem. What was that process like yeah.

Lizzie Horvitz:  Absolutely I couldn’t agree more.

Lizzie Horvitz:  So my first. My first idea was that we should be able to better explain people’s impacts because they’re so unclear about it people are choosing. You know to be a vegan but then flying across the country twice a week um and if we could only tell them and I don’t have the exact numbers so I won’t even. Attempt but if we could elucidate like you actually wouldn’t have to be a vegan if you just cut under flying or vice versa. Um I thought that would be really helpful and so I was thinking initially of an app where you could really track that footprint. Um, and the more I thought of that. 2 things happened first I started looking at the competitive landscape and there are incredible companies that already do that like doro I’m a big fan of um and also to be quite honest I didn’t have faith that people would go to a separate app and track that information I was looking for something where. Convenience was baked in and where people could automatically make changes ah by doing what they’re what they were already doing and so I thought a browser extension made a lot of sense because people already shop online. You’re not asking them to go to a different marketplace go to a different website. They’re already going on Amazon. So. If you can just get them to download a browser extension that 1 time then every single time they shop online finch will will show up and so that all that iteration started happening pretty quickly. Um my brother in law was he was just my sister’s boyfriend at the time was living with us. Um. And he and I just spent a lot of time really my whole family sort of spending a lot of dinner table conversations around like how would this look? Um, how do we really make this happen and 1 idea was that you know it could be really cool if we could monetarily incentivize these people to make better decisions and so.

James McWalter: Now.

Lizzie Horvitz:  When you buy a product that might be more expensive but better for the environment. You could get a kickback in some way and so that’s not part of the that’s not part of the extension right now. It probably won’t be for this next version but um shortly thereafter we would love to you know bake that in as well.

James McWalter: Yeah, it’ so interesting around the user research right? And so um, many aspects of climate where people are moving into the space and like trying to figure out how do you decarbonize cement and a lot of people who might have the academic background for doing that like maybe have never already talked to people who make somement right? and so you’re trying to find those users but I guess in the consumer space. Like actually having dinner table conversations gets you to the core of like your potential user your potential Demographic. You know the people who have that problem. So yeah, like like like I think this is kind of fascinating thing where you’re like I guess writing notes as you’re in having those conversations around the dinner table.

Lizzie Horvitz:  Exactly and I think what’s so helpful is this is something that every single person understands right? because everybody shops and so and that’s a generalization but I think I just looked at the numbers I think 1 hundred and 55 million people in the United states shop online at least once a month so that’s a pretty good market to start with and everybody has their own opinion about sustainability right? It’s everything from I don’t even believe climate change is real all the way to I make significant changes every single day to make sure that my my carbon footprint is is decreased. And so what finch was really trying to do in the beginning was tackle all those people in the middle. So people who believed in climate change wanted to do something about it but did not have more than seven minutes to research any of it online and that actually ends up being a massive part of the population close to a Hundred million people in the United states.

James McWalter: Yeah, that’s that’s such an interesting kind of framework I mean 1 of the similar framework that I I think about is what I call like the next million right? So I feel like there’s about a million people who are like very deep and internalized climate and like those are all the way from activism to government to startup people and everyone in between and then you’re like that next million who you know are.

Lizzie Horvitz:  Prison.

James McWalter: You know, ah mid-level managers at companies making decisions or individual. You know, parents who are making decisions about going on vacations. Um, who get the the scale the problem right? like they had to move because of forest fires or because of flooding whatever it may be um, but don’t really in their day to day like roles like have ah or. Perceive that they have much of an impact on climate and like that next million people like are going to be I think such an important piece because they make every subsequent million group a lot more you know open to change right? because now they’re seeing more people like themselves kind of making changes in their lives.

Lizzie Horvitz:  Absolutely and you know the the we have a lot of ah tailwinds in ah in a good way where you know Gen Z is rising and becoming. So knowledgeable about sustainability in the environment is I think deloyte just did a study that said and the environment was their number 1 priority among any other pressing issues facing the planet or facing the world and so as they’re you know, graduating from college becoming more um in the purchasing space I Think. We’re we’re getting to those those next millions pretty quickly which is great.

James McWalter: And absolutely and I guess so you know if I was to start with the kind of chrome extension. You know I install it like what what would that experience potentially be like for me.

Lizzie Horvitz:  So we’re launching a new a new version in about a month in January at some point and what that will look. You know so much user research has been done since you know day 1 in Covid. But also we we just did another round about a month ago and or 2 months ago. Um, and what’s been really interesting is that the the level of detail that people want to see really varies. Some people say how do I trust you guys if I don’t see every single source every single calculation etc and most are saying I don’t need to see any of this I just want to know what to do just give me a quick answer and so that. Caused a lot of stress in designing the product because we didn’t want to overwhelm those people who just wanted to see 1 score but we also wanted to show that we were very legitimate and so likely what you’d see in the chrome extension is just 1 overall score that says here’s how you’re doing on a scale of 1 to 10 so. I would say anything over 7 point. 5 is is pretty good, um, anything under five should probably be avoided. Um, what’s interesting to note about the scoring is we do it by category and we normalize them so you know what would happen if we didn’t do that is that. All diapers would have a 2 and all body washes would have a nine because body washes are are just by default less impactful generally than diapers. Um, and we didn’t want to. We didn’t want the consumer to feel deflated every single time they they went and chopped for diapers and saw like there’s really no good solution here. So. But we do is we take the entire category overall and we say okay, here’s the best thing on the market that’s going to get close to a 10 and then everything else sort of falls under that.

James McWalter: That’s interesting and I guess as we see more innovation from yeah other startups who are let’s say tackling these different kind of consumer product verticals right? So like there’s a new diaper in the market. That’s entirely. Ah, you know, decarbonized right? Like let’s say that comes on the market like yeah, probably 8 years from now. But you know but may may hopefully maybe shorter than that. Um, that resets an essence potentially like what a 10 would be and then the kind of more traditional diapers would then be kind of adjusted downward is that the kind of basic model.

Lizzie Horvitz:  Exactly and what’s what we love about our model is that it’s mostly it’s mostly automated and so when that new diaper does come to Market. Um, all the scores will just change dynamically based on what that new. What that new score is um I think what else I love about what you just said is. That finch will also be housing all of this data on where that innovation is happening right? We will be able to go out to the world and say diapers really need a disruption and we need a diaper that can be composted so someone should start this because we will know in all of these categories where those gaps are and and how we can improve. We also track. Um. How much people like the product because we think that’s really important and we would never want to recommend a product that people didn’t want to use for obvious reasons but also because in sustainability. That’s the most important part right? If you if you buy any product regardless of its sustainable impact and you don’t use it. It’s then wasted. Um and that’s not a good thing and so. You know, right now off the top of my head I can think of shampoo bars. As 1 example of this is amazing. It’s plastic. Free. It’s so easy to carry around I don’t like what they do to my hair I have not found 1 that that is as good as a panine per v or what you get in the hair salon and so. That’s the type of innovation also where we can keep track of yeah other shampoo bars that people can buy but we’re not thrilled with any of them.

James McWalter: That’s that’s really interesting and I guess like the um, well okay I think about the human psychology of this right? quite a bit and again in my own kind of personal life as well. And really what I guess I’m looking for and I think it might be pretty common is just the guilt-free moment right? when I’m making some sort of financial exchange right? like. And sometimes other emotions like override right? So convenience timing. Um, you know if I’m like I literally ran out of you know, ah body wash or whatever it may be and I’m going out to a nice dinner like I’m just going to run across the street and grab something because even with our fifteen minutes deliveries in new york now. Um, that may not be quick enough right? and so I’ll just literally. Grab whatever iss on the shelf there. Um, or you know I’ll over it or whatever is like quickest available on Amazon whatever it may be um and so the ah suppose the ability to kind of um, kind of manage that emotion right is very dependent on like context and it’s very dependent on the types of a product I guess as well. Um, how do you think about that piece I mean you know 1 of the things I think about it especially with online shopping is people will put things into carts and like go back to them like 3 or four days later. Um, you know I guess in your kind of user research. Do you see you know human behavior double checking your scores and then going back to them and like how how they’re trying to maybe way up. Things like convenience against things like impact.

Lizzie Horvitz:  It’s a really good point I remember ah several months ago before we had even had the beta out I I woke up in the middle of the night and was like oh my gosh I just overlooked 1 of the biggest barriers which is once we’ve rated a product. Then people are like great. This is my new go to toilet paper and I never have to use finch again and that was a ah real fear. Um and and it add you know it goes to your convenience where people say I read about this in finch six months ago I know that it’s good I’m just going to keep going and now I don’t need the platform. Um I think.

James McWalter: Oh.

Lizzie Horvitz:  Finches scores aren’t always changing so much that it’s going to be important to sort of go back. Um, every couple of months and make sure that that the scores haven’t changed at all. Um, but I think you’re right and we don’t we don’t have user data on this yet. We’ll we’ll have it when we’re live. There are certain products that people are not willing to switch on. There are certain products that people love the brand and are not interested in buying sustainably there are other products that people are completely brand agnostic about and so you know worst case scenario for us. What’s exciting is that even if people aren’t switching. That’s data in and of itself that finch can then utilize and sell to brands where they say you know people are only willing to switch detergents if they’re saving five dollars or x y and z and so um, we’re we’re really excited to capture that data I think um. Yeah I lost my train of thought so you can you can take that out. But I think.

James McWalter: Yeah, yeah, no that that makes a ton of sense. Um, and I guess like you know 1 of the questions is impact can cover a lot of different things. Um, and so what are the kind of data points that you’re taking into account when you’re calculating your score.

Lizzie Horvitz:  So we have identified 80 attributes that go into the sustainability of a product. Um and part of our sort of trust metric is that we will not incorporate an attribute until we are 1 hundred percent confident in the studies and the data behind it and so for example.

James McWalter: And.

Lizzie Horvitz:  We know that Microplastics are a massive problem but they will continue to to grow in Concern. They’re just simply not good studies out right now that show the exact impact and so that’s not part of our of our writing system yet it will likely take 2 years to get to what our eighty product categories. Um, or what our 80 attributes are right now and then beyond that there are going to be I mean we’re reading studies now that came out a month ago that are incorporated. Um, they’re all based on environment. So. It’s real environmental sustainability in terms of quantifiably measuring these things. It’s everything from. Origin of manufacturing. Um you know greenhouse gas emissions um company level certifications and everything in between we would love to figure out a way to incorporate social factors as well. Um, like ah is child labor being used. Is there bipoc leadership on this company etc. The problem is we don’t feel comfortable for obvious reasons putting a waiting on that right? So when we look at a category we can say the impact of toilet paper is thirty percent end of life seventy percent you know pulp mill manufacturing and we can actually put numbers behind that. We would never be comfortable saying like Bipac leadership is probably like 50 percent important. Well everything else exactly right? And so um, we’re sort of toying around with maybe just saying as an addition like by the way this is child labor free or this is.

James McWalter: That counterbalances the child’s you know the child labor right? yeah.

Lizzie Horvitz:  You know we’re not convinced that this is used without child labor just as an addition so you’ll have the environmental score and then you have those social factors sort of qualitatively more than anything. Um, we’re using in terms of data. We’re using several different sources we’re we’re doing a lot of academic studies Ngo reports.

James McWalter: So.

Lizzie Horvitz:  Um, governmental reports that show sort of what the latest research is and then we’re buying some data sets. So we’re not I think what’s important to note, we’re not really reinventing the wheel in any way we are just taking you know. What ewg already has what B Corp party has and combining everything so that you don’t have to go to 1 place to get your human Health score and another place to get your sort of corporate governance. Score.

James McWalter: That’s interesting and I guess like so you know generally the environmental things will line up, but there are definitely situations where carbon emissions. For example, may be intention with like plastic so the creation of plastic right? So plastic doesn’t ah. And it decomposes. It doesn’t really produce any carbon like you know 1 of the problems with it right? It just sits in landfill for 100 or years or 1000 years whatever it may be but any carbon that is within the material itself is captured and not going off to the atmosphere and so how do you think about the weighings of those yeah things that could potentially be in some tension.

Lizzie Horvitz:  It’s such a good question and we have so many our our most popular blog is called the sustainability paradox written by our scientist mark and he looks into that exact issue which is people think they’re making the right decisions and then they’re actually doing ah worse. Um. For for like because of misinformation and so 1 of the biggest um 1 of the biggest issues is plastic straws versus min straws and so I think what happened was people were seeing you know pictures of sea turtles with straws up their noses and seahorses with q-tips et Cetera. Um, and that was really troubling. But what people don’t understand is that you know 1 in 7 plastic straws ends up in the ocean. Maybe um when a metal straw is made There’s absolutely an environmental a carbon impact that’s significantly higher than plastic and so. What people don’t understand is that when they buy 1 metal straw and use it 3 times they’re doing a significantly more. They’re doing significantly more damage than just using that plastic straw once it’s the same idea of if you go to an into a grocery store and you buy you know you buy your groceries you you forget your canvas bag in your car at home. Um, lot of people are so tempted to buy another canvas bag when in reality it’s significantly less harmful just to get a plastic bag sort of slap yourself on the wrist and move on because that 1 canvas bag needs to be used over 100 times to like recapture that carbon footprint. Um, and so you know it’s it’s really. Tricky james it’s complicated because we’re undoing a lot of information that that people have been used to for several years um and trying to retrain them and almost teach a new language around. This is what you should pay attention to um, the other thing that’s I think interesting is I’ve gotten a lot of feedback around I’d love to be able to. Toggle on what I care about. So if I care about water issues I can you know some so products can be rated higher than you if you care about carbon or things like that and we push back on that because that’s really what finches’ value ad is we say you know what when you’re buying a bed the um. When you’re buying a mattress like a b and c factors. Don’t really matter you really need to care about you know x y and z so it’s cool that you care about animal welfare but that doesn’t come into to play here and so we would rather tell the consumer. What to what to worry about and and inform them as opposed to sort of them driving whatever their decisions are.

James McWalter: Yeah I guess like so much of that misinformation right? I guess comes out of ah I guess under kind of understandable if not, ah yeah, positive corporate um green washshing of of various sorts and so like when I think about how you’ll be situated I guess in the marketplace you know like. Mentioned this like kind of ability to share these insights with corporations so that they can be better stewards right? Overall um, but then also obviously the consumer can make those kind of better choices. Um, how do you think about that balance right? because I mean a lot of the corporate players are already. You know ah trying to you know Pivot quote unquote at least the messaging for their products in a way that like. Implies more sustainability and I think like pretty much every major consumer brand will have sustainability on their website even if you know they just hired the first sustainability person last last summer or whatever. Maybe um, so yeah, how how do you think about like greenwashing how it intersects with your product.

Lizzie Horvitz:  So I think the smaller companies are definitely struggling more than the larger ones because they don’t have the first of all, they don’t have the money to pay for Bcorp certifications and and other things like that which already sets them back at at a disadvantage. Even though they might be doing just as good as a p and g um, and they also don’t have the the economies of scale that a unilever would have right? if they’re trying to buy recycled plastic um pcr. They don’t have the market share to be able to. Purchase that at ah at a price that makes sense and so they’re really in need of accurate information where we can say okay, here’s what matters here’s what doesn’t matter. This is these are the places where you need to where you need to invest and so I think that finch could actually be really helpful for those types of smaller companies. Larger companies have a slightly different issue which is that they don’t know what their consumer wants. Um, you know they spend hundreds of thousands of dollars on focus groups where consumers say I would absolutely spend money on a shampoo bar that was you know made without plastic and then at checkout it’s a very different story and they don’t end up doing that. And so it’s not because they’re being dishonest. It’s because we don’t know ourselves as as humans very well and what we say and what we do are are different. It’s just human nature and so and that gap is is actually fifty percent 65 percent of consumers want to shop more sustainably only twenty six percent end up doing so and so. Um, because of or I guess it’s less than 50 my math. My math might be a little off but it’s a huge gap and what what finch is able to do is go to these large companies and say okay when people are buying shampoo they care most about the end of life and they care most about the ingredients and so when you’re. Building your new product or marketing your new product. This is what you should keep in mind. Um and I think once people sort of get comfortable with that. Um, then it’s a different story I also think you know as I said earlier with gen z and more informed shoppers. Um companies are not going to be good. Able to get away with saying things like eco-friendly or all natural much longer because um, the the sheets being pulled back and people are understanding like what does this actually mean um and I kind of want to understand the details and not just see 1 word.

James McWalter: Yet.

Lizzie Horvitz:  That that really any and that’s the problem with greenwashing right? is that literally any company right now could put on their packaging eco-friendly. All natural chemical free and there’s no regulation for most of these words.

James McWalter: Yeah, and because that lack of regulation to your point. It just consumes or confuses the consumer I started talking to a food delivery company who tried or has implemented sustainable packaging as part of their product mainly because it was driven by the leadership team wanted this? Um, but. The ceo is saying to me that it was so disappointing because when they actually then like interviewed people as part of this they would ask them like you know which is like the most or how how much value do you place on 1 percent ten percent or 1 hundred percent sustainable packaging and it was basically the same response across the people who cared about sustainability once they saw sustainability it was like 1 percent.

Lizzie Horvitz:  Wows.

James McWalter: Um, there was very very little change between that and 1 hundred percent because they just saw the word sustainable or sustainability and it was like oh like we’re great. That’s sufficient like that was like the the weighing was on that word rather than the percentage which was the the entire piece. Um, so yeah, and but I think a lot of that is just down to the fact that people are so used to seeing.

Lizzie Horvitz:  Um, good to go. Um.

James McWalter: Word natural I mean the word natural in in terms of ah dietary type labeling has been you know debunked a million times because like literally pretty much everything I guess can be ranked as natural like if it is the molecule that appears in on the planet. Um, and so but so people have been looking at natural orange juice for you know, 20 years and just being kind of somewhat deceived and so I think. Um, we have a similar problem to kind of go against within the sustainability space.

Lizzie Horvitz:  Completely and you know 1 other example that that we always use is Palm oil is as natural as it gets right? but that is could not be moreive disruptive to the environment in terms of you know the monocultures and the destruction of deforestation and so um. People and that’s the balance that we’re really trying to reach is like I understand that people don’t have the time to really learn about the nuances with palm oil versus another ingredient I Totally get that. Um, but we would like to at least have that information in case people are interested but also be able to. Put a score on that. Um, as opposed to having people feel that own responsibility themselves to be like I don’t remember what the deal is with Palm oil should I buy this or should I not they can just see a score and and make a decision.

James McWalter: And yeah I guess 1 thing that you mentioned a couple of times that that I’d love to take in a little bit is around the kind of studies themselves and so um, you know you mentioned kind of studies who are kind of writing these studies already typically academics are enough I’d imagine. There’s not um and you know is there a kind of um. Like what pressure I guess could be or opportunities can be shown to whoever whatever type of groups are creating these studies today. Um, like do they need more people did they need more funding did they need more direction like what is the kind of gap in the types of studies that are needed to make product like yours shine.

Lizzie Horvitz:  It’s a really good question and I think I would have to ask Mark who is admittedly reading most of these studies. Um I’m trying to stay stay out of that as much as possible. But I think he might tell you that the biggest problem is that we can’t move quickly enough. There’s absolutely enough. There’s.

James McWalter: I.

Lizzie Horvitz:  There there are enough people there are tons of brilliant minds out there working on this around the clock. Um, but in order to get something peer reviewed up published etc that is incredibly bureaucratic. It can take a lot of time and so um, that’s really the barrier is that like. On our side. We don’t have the resources to read fast enough. All these all these papers that are already out there. But also um, it takes it takes a lot like there’s there’s probably research going on right now that we would love to incorporate that likely won’t be published for another year and a half and so it’s just sort of this lag time and and as I mentioned. We could probably get access to some of those studies and and talk to more academics about the races that they’re doing right now but we also have a reputation that’s really important to uphold and we we have standards on you know, making sure that our data is coming from at least 2 peer reviewed art studies and. Um, it’s you know it’s been in the wild for a little bit.

29:07.61 James McWalter: And those studies are they generally targeting kind of a product category generally or are they going into specific brands and and getting very kind of granular and saying ah you know take of argument unever versus P and G you know detergent right? And how those compare.

Lizzie Horvitz:  It’s actually neither we so that’s the work that that Mark is really creating on his own that’s our I p is um, what’s happening in the academic studies is looking at particular chemical makeups looking at. Newest research on packaging. Generally it’s it’s brand agnostic generally and it’s product agnostic but we have these different categories so you know climate change water use energy use natural resource depletion a couple of others and Mark is basically reading all of those studies and then. Putting numbers on how to quantify them and so 1 thing he’s doing right now is going category by category and seeing okay, what are the top we know that there are probably 10 environmental impacts that go into these products but what are let’s just start with the top 2 or 3 and so we know that. For mattresses. The biggest impacts are whether or not, you’re using a foam or spring mattress and what happens at the end of life and so for simplicity’s sake and because of where we are on the stage. We just take those 2 factors. Um, we read as many academic studies as we can about those specifically and then we make we make a final decision on mattresses and then with an amazon details page with you know anything we scrape from the public domain we can find out what individual mattress companies ah are made of. And then and then we we incorporate those ratings does that make sense.

James McWalter: And makes all sense. Yeah, and I think like developing that internal research and that that I be I think is incredibly value as well. 1 thought I suppose that I’ve been thinking about is there’s a lot of movements around or there’s a lot of energy. Um, even if ah I have. My own views on a maybe fatally flawed energy around things like degrowth and like the reduction in consumption Overall as like a strategy around climate and sustainability. Um, how do you think about that because I guess the ah you know the finch approach is to make have. Consumption. That’s already going to occur be the best the most optimized from a sustainability point of view consumption. Um, but there’s a ton of consumption that maybe not be quotequote needed and so the overall reduction of consumption right? Like can also have a large impact. Um, yeah, how do you think about that kind of tradeoff.

Lizzie Horvitz:  I couldn’t agree more and I think that’s absolutely a big part of it we as as you said so eloquently like our main goal is that people are shopping anyway. So when they’re shopping. We want to make that as as seamless as possible. We do try to try to. Implement a couple of things to reduce consumption and so part of our rating is in the use phase what’s happening once you own the product. There’s so much focus on how it got to your house and then how it’s disposed but not as much of what’s actually happening when when you’re using it. So we think of you know, washing a pair of jeans charging an ipad et cetera and so I think part of that is here’s how you can make your pair of jeans last right wash them in this specific way use this type of dishwasher this type of detergent. So that people won’t have to buy a second pair of jeans after a year or 2 right? And so I think. We’re really, um, pioneers in many ways of the use phase um and thinking through how all these factors fit together just to make things last longer It’s also important for finch that our monetization is not paired to purchases right um. So we thought incredibly hard about that. We’d love to get to a point where when someone’s shopping on Amazon. It’s so advanced where you know we’re saying you just Bought. You know you just bought deodorant. Last month do you really need this again or you just bought a pair of white sneakers last month do you need this purple pair of sneakers right? So um, sort of nudging people to second guess if they actually if they actually need things. Um, we’re starting with consumable so it’s it’s a little less relevant because. I don’t think there’s a way if there is I haven’t found it to sort of reduce toilet paper use for example or shampoo or I mean ah yeah, like of of course we could. We could do education on how to shower less and things like that. But um, the consumables are are easy. What’s going to get really fun is when we start getting into.

James McWalter: A world of B days.

Lizzie Horvitz:  Apparel and luxury items and things like that where we can actually say buy this not that um and and try to help drive those decisions.

James McWalter: Yeah, that makes sense and I guess there’s well so you mentioned monetization. So yeah, how are you thinking about monetization.

Lizzie Horvitz:  So we think of ourselves as a data company and we are creating 2 valuable types of data 1 is right now which is this proprietary algorithm of here are the most important factors that go into a product and these are the scores.

James McWalter: And.

Lizzie Horvitz:  And then the other is once we have a large group of people using the extension. We’ll be able to capture that data on behavior that would be able to sell to companies and to be very Clear. We’ve never sell personal Data. We only aggregated and anonymize it and so you know you James are a man of a certain age in a certain city nothing more than that. Um. And so that you know that monetization will come a little bit later but right now we’re having a lot of fun talking to potential partners who are thinking about their own shopping experience on their website or um, their own sort of internal. Ah. Internal test to say like should we carry these certain products. We’d love to see the finch scores on it. Um, so that’s been really fun.

James McWalter: Yeah that’s fascinating and you know you’re experiencing unilever I’m sure kind of aligns with this. But last company I was at was a marketplace for research participants and there was a ton of cpg market research being done by people within our space and so I talked to a lot of the big cpg companies who are customers over the over the last yours at that company and the amount of money that are spent on agencies and like all sorts of lists and all those kind of things I think would astound people and having like actual data where people’s actual behavior relative to what people are telling them and try and remember 6 weeks later um is incredibly valuable.

Lizzie Horvitz:  There’s so much there I agree it’s it’s we’re excited to sort of go down that road and we’re really just scratching the surface right now.

James McWalter: Absolutely and so you know you mentioned a little bit earlier about you’ve been in sustainability your kind of whole career and um, we already kind of mentioned like being as covid a lot of people kind of reassessing their path maybe starting companies. We’re talking hearing about this kind of great resignation. That’s been happening over the last few months where people are kind of. Changing or reassessing the kind of careers and so in general, we’re just seeing a ton of kind of new people kind of coming into the climate space. Um, but I guess like what are your views on that you know like generally more people working on these things is is the that positive. Um, but there are also can be kind of clashes as people like try to understand what’s kind of gone before and ah how we kind of con merge people who may not know much about sustainability or and but want to do good? Um, but how how do you think that’ll kind of evolve over the next few years

Lizzie Horvitz:  It’s 1 of my favorite questions I think about it all the time because the bottom line super clearly is the more people in this space the better and I have loved 1 of my favorite parts of my career is talking to people who are shifting and saying you know I come from Financial services I come from pr I would really like to use my power for good. We just hired a full stack developer who I’m so excited about who um you know studied environmental studies in undergrad but then did tech for forever and now just really wants to get back into that space and you know. Environmentalism is so intersectional that you need all those different skills to be ah ah to be honest to be a generalist like me is less and less helpful. Um, because we need all these different skills to sort of push the push the envelope. Um I will say it’s been interesting in the. Startup space to meet so many entrepreneurs who are who think they can start their own companies in the space after having never never been a part of it. Um I think that to be totally honest I’m probably offending a lot of people I think that’s interesting, an interesting decision because I’ve just There’s no way I would have ever been able to start this had I not had that experience at unilever had I not studied this in at yale at business school and and sustainability school. So um I would I always recommend that if people are entering in the space they sort of look towards someone who’s been in the space a little bit longer. Um. Because I can’t tell you how many how many people I meet who say yeah I I just like got really inspired by regenerative agriculture and I’m I’m gonna start my own farm and you’re like I don’t really get how you think that that’s something you’ll be able to do um just like leading a company like this. Um, so It’s probably a hot take that that’s unpopular by some but I think generally yeah, the more people the more people the better.

James McWalter: Yeah I guess the you know the tradeoff is the scooping up of capital right? And so if you have a ton of people who might have incredibly good connections within vc community or coming from you know building crms for. Um, favorite example, buildings urms for hairdressers are barbers right? like and then then moving into climate um and trying to kind of bring those kind of software and marketplace let’s say development skills into or so you know just Saas b 2 b saas skills into climate. Um, you know, then it’s kind of seeking out like use cases that might actually kind of apply. And I think in general where that’s kind of been most successful is the types of you know b two b esg carbon accounting type plays which and that’s why we’ve seen 200 of those companies in the last year kind of evolve and I’ve had a couple of them on on on the podcast as well and I think you know some of them will.

Lizzie Horvitz:  Um, either.

James McWalter: Do incredible things and some of them will be very very successful. Um, but I guess I think what’s really interesting even though but the point about yeah, starting some from gender farming or whatever is that like in a year like they’ll be like world-class experts unlike all the mistakes that they made with the thing and then maybe they they can do the other thing as well. Um, because I can kind of merge those 2 experiences. Um, and I guess like the other piece is just you know so much of the I guess the start of space is like developing in like 3 or four look at global like locations that are very very different to how the rest of the world operates and I think by like moving into these other spaces people are like getting experience and I think farming is a great example like I grew up on a farm.

Lizzie Horvitz:  Um, yes.

James McWalter: Ah, hadn’t but I hadn’t farmed for 20 years or whatever and then I started exploring regenerative vag and I very rapidly was like oh this the sales cycles are too long. This is just not the space for me even having grew and grown up on a farm and I think like having people just getting exposed to those different you know, ah types of life will. Make better founders better early employees and so on with.

Lizzie Horvitz:  I completely agree and I’m thinking you know I’m thinking back to when I lived in San francisco in 2014 I would meet all these people who would say like yeah I just started this company where you know you’re able to order at. You’re you’re able to order your food before you even get to the restaurant and then like it’s waiting there and and I would think to myself like this is so dumb and like so not what the world needs and so I guess the positive to your point is like at least people are trying to do something that like will improve the the planet and I feel very strongly. You know we’ve gotten a lot of pushback on the question of like. Our individual choice is going to push the envelope enough or will this be like large infrastructure decisions and there’s no doubt in my mind like we’re going to need serious changes to get our grid off of the dependence on oil and switchs chenoables no doubt in my mind but I don’t think it’s an either or it’s it’s like a both and like. We need all of these solutions to be happening simultaneously if there were a silver bullet. We probably would have already found it and figured out a way to to scale. It. So um I think the more sort of solutions. The better.

James McWalter: I yeah I think that’s like ah it’s 1 of my tests for seeing how like involved into the space like somebody is it’s like do they say silver bulleta type stuff or do they say like portfolio approach they say portfolio approach like they’re like oh they’ve talked to people for at least a couple of months you know.

Lizzie Horvitz:  Yeah, exactly.

James McWalter: Um, Lizzie Horvitz:  is actually brilliant before we finish up is there anything I should have asked you about but did not.

Lizzie Horvitz:  We covered a lot of ground I think I I would ask everybody to you know, check out our website for any resources, please share feedback. That’s the only way we we get better and we’ll be launching our browser extension in early Twenty Twenty two so I would encourage everybody to look out for that.

James McWalter: Brilliant and I think you can sign up on the website to get on to marketing list I just sign up myself and will add that link on to the show notes.

Lizzie Horvitz:  Thank you so much Dane This is this is a pleasure bye.

James McWalter: Thank you Lizzie Horvitz:  Bye now.