AI transcript
0:00:16 I’ve personally seen Sam resolve a $100 million issue in a 30-minute phone call, 15-minute
0:00:17 phone call.
0:00:22 In this season of Foundering, we’ll take you inside OpenAI.
0:00:28 It’s a story of feuds, betrayals, billionaires, and maybe the extinction of humanity.
0:00:34 And it’s also the story of Sam Altman, maybe our future AI overlord.
0:00:39 Listen to Foundering, the OpenAI story, wherever you get your podcasts.
0:00:45 I’m just listening to that’s the walkie-talkie again.
0:00:46 Yeah.
0:00:49 I’m in an operating chemical plant.
0:00:50 Fair enough.
0:00:54 So is the Bioforge, is the factory like out the window behind you?
0:00:55 You’re in a trailer.
0:00:56 Where’s the factory from where you are?
0:00:58 It’s right, right, right in front of me.
0:01:00 Could you walk outside and throw rock and hit it?
0:01:01 Yes, yes.
0:01:05 So we’re on the former side of an exploded polyethylene wax distillery.
0:01:06 It exploded?
0:01:07 Yes.
0:01:14 So I was just found in 2016, but the site that we’re on exploded in 2005.
0:01:15 So it’s what’s called a brown.
0:01:16 Did you get a deal?
0:01:17 Did you get a deal because it had blown up?
0:01:21 We got a deal, yeah.
0:01:22 So like your site is a metaphor.
0:01:29 It’s like some petrochemical plant blew up and you built a factory on top of the remains.
0:01:30 Exactly, yeah.
0:01:33 So there’s actually a chemical safety board report written about it, but it blew out every
0:01:35 window in like a five mile radius.
0:01:41 Holy cow.
0:01:45 I’m Jacob Goldstein and this is What’s Your Problem, the show where I talk to people who
0:01:48 are trying to make technological progress.
0:01:50 My guest today is Sean Hunt.
0:01:55 He’s the co-founder and CTO of a chemical company called Solugin.
0:02:00 Solugin sells around $100 million a year worth of industrial chemicals, but instead of making
0:02:05 the chemicals from fossil fuels the way they’re typically made, Solugin makes them from corn
0:02:06 syrup.
0:02:09 Sean’s problem is this.
0:02:13 How do you make the chemicals that go into everything around us, our food, our clothes,
0:02:17 our cars, without using fossil fuel?
0:02:22 We’ve talked a lot on the show about the energy transition, the move away from fossil
0:02:24 fuels as sources of energy.
0:02:30 What Solugin is really working on is the chemical transition, basically same idea, but for chemicals
0:02:32 instead of energy.
0:02:34 Solugin got its start at a poker table.
0:02:40 Sean was getting his PhD studying catalysts, in particular the kinds of catalysts that
0:02:44 are used to make industrial chemicals out of coal, oil, and gas.
0:02:49 Sitting across the table from him was another grad student, another PhD student, a guy named
0:02:52 Gorab Chakrabarti, who was studying biology.
0:02:56 In particular, he was studying enzymes in cancer cells.
0:02:59 And enzymes, as it happens, are a kind of catalyst.
0:03:02 That thing Sean was studying in a very different context.
0:03:06 So of course, Sean and Gorab started talking about catalysts.
0:03:10 Catalysts in general are used to make the physical world around you, right?
0:03:14 So the food that you eat, the clothes that you wear, the car that you drive, the house
0:03:19 that you live in, all of those things were made using catalysts.
0:03:20 Okay.
0:03:22 And this is what you’re studying in grad school?
0:03:23 Yep.
0:03:28 Meanwhile, the guy sitting across from you at the poker table, Gorab, what’s he studying?
0:03:33 So what he’s studying is like catalysts gone wild.
0:03:38 So he’s studying pancreatic cancer, and so in a cancer cell is the catalysts that are
0:03:43 in there, which are enzyme catalysts, these little folded up proteins.
0:03:49 They evolve in a really strange, very unfortunate way that is one of the reasons that cancer
0:03:52 is so bad.
0:03:55 But one of our conversations was like, you know, he’s describing these enzymes to me,
0:03:58 like, how are they operating in this kind of crazy environment?
0:04:00 Like enzymes shouldn’t be able to do that.
0:04:04 Like it, like that’s actually approaching an industrially relevant environment.
0:04:06 It’s unfortunate it’s happening inside a cancer cell, but it’s like, hey, that’s actually
0:04:09 like, that could actually have some uses.
0:04:10 Huh.
0:04:13 It’s really bad when it happens inside your body, but if you could make it happen in
0:04:15 a factory, it might be useful.
0:04:16 It might be useful.
0:04:17 Exactly.
0:04:19 Your research and his research coming together.
0:04:23 It’s like the hyper nerd version of like the Reese’s peanut butter cup, like chocolate
0:04:27 and peanut butter, but for catalysts.
0:04:32 Jacob, I have many friends, I have so many friends.
0:04:38 So okay, but as you and Gorab are talking about this, like, really, why are these enzymes
0:04:42 that he’s studying, you know, potentially useful in an industrial setting?
0:04:43 Yeah.
0:04:47 So, so if you think about it, like, what does, what does the enzyme have to offer?
0:04:48 Yeah.
0:04:54 So what an enzyme can do is it could convert a raw material into a product at room temperature
0:04:55 and water with perfect yield.
0:04:57 Well, that’s the dream.
0:04:59 That’s like the cold fusion of your business.
0:05:02 I mean, yeah, enzymes are, they’re pretty much like the cold fusion of catalysis.
0:05:06 Like they, they can do everything that you want to do in a manufacturing process.
0:05:09 It’s like perfectly, but the, sounds amazing.
0:05:10 What’s the catch?
0:05:11 Well, the problem is they’re delicate.
0:05:15 So, so like historically, like they’re hard to make, they’re very expensive to make and
0:05:18 like, you know, I’ll give you an example.
0:05:22 Like, like some of the early like enzymes that you find in nature that you want to put
0:05:27 in a chemical plant, that enzyme might cost $2,000 a pound to make, right?
0:05:29 Chemicals are sold for $2 a pound, right?
0:05:30 Yeah, right.
0:05:31 And, and so.
0:05:33 And you’re making plastic, you’re making commodities.
0:05:34 You’re making commodities, right?
0:05:37 So you can’t spend $2,000 a pound for your catalyst.
0:05:41 Cause if, if you can only make like one pound of your product per pound of enzyme, you’re
0:05:42 done.
0:05:43 I mean, there’s no business to be had there.
0:05:44 You’re a thousand times off.
0:05:45 Yeah.
0:05:46 Like you’re way off, right?
0:05:47 Yeah.
0:05:52 Now, what if you could evolve that enzyme in the lab, this is called Directive Evolution,
0:05:55 and you can use machine learning, AI, there’s all sorts of cool stuff that like changes literally
0:05:57 every year on how to do this.
0:06:01 What if you could evolve that enzyme to make a hundred thousand pounds of product per pound
0:06:02 of enzyme?
0:06:03 Uh-huh.
0:06:04 Uh-huh.
0:06:05 Now, now you have a business here.
0:06:09 You could actually incorporate that enzyme into a chemical plant because you’re going
0:06:15 to consume so little of it that even though that enzyme is expensive, it has perfect yield
0:06:16 in water at room temperature.
0:06:19 I mean, that’s an incredible capability.
0:06:23 And so this, I mean, you, you mentioned like, so what if you could evolve meeting sort of
0:06:26 direct the evolution of that enzyme, right?
0:06:27 Yeah.
0:06:30 Uh, this is a relatively new idea, right?
0:06:35 Like obviously people have known about enzymes for a long time and they’re essential to like
0:06:40 everything that happens in our body, not quite, but kind of, right?
0:06:46 So this is the key idea then it’s like, what if we, everybody knows enzymes can do this,
0:06:51 but they’re not, they’re too expensive slash not efficient enough, right?
0:06:55 The amount of enzyme you have to use is too expensive given the amount of product you
0:06:56 get.
0:07:02 And you guys realize that there is this relatively recent scientific research that suggests you
0:07:08 can get enzymes to produce way more product per unit enzyme, per enzyme.
0:07:10 Exactly.
0:07:14 So like, so what do you do?
0:07:18 Kind of as this was happening, you know, I was coming up, I was on my last year and about
0:07:24 to graduate and I’m kind of having, you know, I don’t know, maybe, maybe a bit of a crisis
0:07:27 on like, I like, I really like being academia.
0:07:29 I don’t really want to go work for a big company.
0:07:32 Like I’ve worked for big companies in the past, not a huge fan.
0:07:36 And you know, it’s like, if there’s a time in my life to try something, like let’s do
0:07:37 it.
0:07:39 And Gore was kind of having a similar thing.
0:07:43 Like he, he really liked the PhD program, but then he did his final two years back in
0:07:46 med school and like was just not loving medicine.
0:07:48 And so we were like, well, what if we could make something work here?
0:07:55 And so we, we entered the MIT 100K entrepreneurship competition in 2016.
0:07:57 We got 10,000 bucks.
0:07:59 And I mean, we were super jazzed.
0:08:01 I mean, we were like, oh my gosh, like we, we have some seed money.
0:08:03 This is incredible.
0:08:07 And sort of the rest of this is sort of again, like this just like continual series of just
0:08:08 kind of lucky breaks.
0:08:09 I kind of joke.
0:08:11 I think Gore was like the luckiest person I’ve ever met.
0:08:15 So the more I’m associated with Gore, I’m the luckier, the luckier I tend to be.
0:08:16 That’s a great move.
0:08:17 Teaming up with the lucky person.
0:08:18 He’s a genius.
0:08:19 Yeah.
0:08:20 Yeah.
0:08:21 He’s got incredible, incredible luck.
0:08:24 So, so at this point, I’ve been long distance with my, my wife now, right?
0:08:25 We’ve been long just for seven years.
0:08:27 She’s like, you’re, you’re moving to Dallas.
0:08:29 I’m like, all right, well, Gorbs in Dallas, we’re going to start this thing like, let’s
0:08:30 go.
0:08:31 Okay.
0:08:37 So we rent some lab space right behind Dallas Lovefield Airport, like 400 bucks a month.
0:08:44 We go to Home Depot to build, like let’s build, approve a concept reactor and, you
0:08:50 know, let’s, let’s do, you know, a basic enzyme and try to make hydrogen peroxide.
0:08:51 Okay.
0:08:55 And what was really fortunate was our pitch video to the 100 count entrepreneurship competition
0:09:03 got shared to a Facebook group of float spa owners, a float spa, a float spa.
0:09:04 Yeah.
0:09:10 So these are saltwater hot tubs that are like isolation chambers.
0:09:14 And like, it’s like a sensory deprivation tank, sensory deprivation tanks.
0:09:23 And it was like a really like nascent industry, pretty much created by Steph Curry and because
0:09:24 he’s into it.
0:09:30 Well, maybe I’ll be able to drain threes all day if I go to a sensory deprivation
0:09:31 tank.
0:09:33 The one, the one common thing when you talk to all the owners of these float spas are
0:09:35 like Steph Curry did so much for this industry.
0:09:36 Wow.
0:09:37 Okay.
0:09:38 So it’s a common thing.
0:09:41 So why does your video get like, what’s the connection?
0:09:44 So one of the float spa owners thought this was the coolest thing.
0:09:49 They have like trouble buying peroxide, they have trouble handling it.
0:09:50 Do they need peroxide?
0:09:51 I don’t get the link.
0:09:55 They use peroxide to clean the hot tubs in between people going in and out.
0:09:58 So if you kind of think about it, it’s a little bit like you’re going in and out of
0:09:59 a hot tub over and over again.
0:10:00 Yeah, nasty.
0:10:01 Super nasty.
0:10:02 Yes.
0:10:03 You got to clean it.
0:10:06 Well, I mean, you can buy peroxide at Walgreens.
0:10:08 You can buy peroxide at the drug store.
0:10:10 What’s the, why don’t they just do that?
0:10:11 What’s going on?
0:10:15 So you can, but they use a more concentrated peroxide.
0:10:20 And so it’s got some, you know, shipping, it ships hazmat, things like that.
0:10:22 And so they’re also environmentally conscious.
0:10:24 So, so I think they also found it fascinating.
0:10:27 I was like, Hey, these guys are going to make peroxide and they’re doing it in a more sustainable
0:10:28 way.
0:10:32 And so we got like inbound on like, Hey, if you make this, we’ll buy it.
0:10:33 Okay.
0:10:34 That’s amazing.
0:10:35 Yes.
0:10:36 We’re like, this is really cool.
0:10:40 So, you know, built this little, it was like $7,000 all in like air compressor from
0:10:42 a depot, little PVC reactor.
0:10:45 So we’re feeding it sugar, we’re feeding it air.
0:10:50 There’s this engineered enzyme that’s like floating around inside of it and the sugar
0:10:53 and the air react inside the tube.
0:10:56 And then we have a membrane that keeps the enzyme inside.
0:10:57 Okay.
0:11:02 And then on the other side of the membrane, we get hydrogen peroxide in an organic acid.
0:11:03 Okay.
0:11:09 And is, is regular hydrogen peroxide made from petrochemicals like everything else?
0:11:10 Did I?
0:11:11 Yeah, yeah.
0:11:13 How do you get regular hydrogen peroxide?
0:11:16 It’s, it’s, it’s fairly, fairly epic.
0:11:17 Yeah.
0:11:18 Yeah.
0:11:20 I’ve been to a couple of hydrogen peroxide plants.
0:11:23 It’s a super cool process, but it’s, it’s one of those ones that’s nuts.
0:11:26 So they create this, give me the short version.
0:11:27 Yeah.
0:11:28 So what’s the input?
0:11:30 Like does it start as, as a fossil fuel?
0:11:31 Yes.
0:11:32 Yeah.
0:11:33 Yeah.
0:11:34 So it’s very hard to make cause it’s, it’s metastable.
0:11:37 That’s, that’s why it’s so useful is that it wants to decompose.
0:11:41 And when it decompose, it makes free radicals and that clean stuff.
0:11:46 And so it makes it sort of difficult to make and, and you know, somewhat, you know, hazardous
0:11:47 to make as well, right?
0:11:54 And so is this, is the enzyme you start with in your process based on Gorob’s grad school
0:11:58 thing, based on the enzyme in cancer cells that’s making hydrogen peroxide?
0:11:59 Yeah.
0:12:03 So we were, we were essentially taking, I’ll call them motifs, so essentially common motifs
0:12:08 from what you would find in this like really wonky pancreatic cancer enzyme, and then translating
0:12:12 it to more industrial relevant enzyme.
0:12:18 So basically you’re starting with the pancreatic cancer enzyme and saying, how can we kind of
0:12:25 use the tools of this enzyme to make an enzyme that we can put in our tube and have it do
0:12:26 what we want?
0:12:27 Exactly.
0:12:31 And what was pretty neat is like, to me, the neatest part is the relative scales here.
0:12:38 So like on weekends, we had like one gallon bottles of this peroxide organic acid mixture
0:12:42 and we would drive around Dallas and we’d pour it into people’s hot tubs, right?
0:12:48 Like literally, you’re like not just a scientist, you’re like, you’re like the pool boys.
0:12:49 We were the pool boys, right?
0:12:54 We had our three customers and they were super delighted, and then we learned how to like
0:12:59 do shipping online and we, you know, started shipping to the other spots, but to make that
0:13:05 one gallon bottle, we were only using like milligram quantities, like little just like
0:13:06 fine dust of enzyme.
0:13:12 So you’re getting thousand X, whatever, for every unit of enzyme, you get a thousand or
0:13:14 something units of peroxide.
0:13:15 Exactly.
0:13:20 So like it’s like a, we’re like selling this like, you know, really just like, I mean,
0:13:22 barely minimum viable product, right?
0:13:23 Yeah.
0:13:27 But like we’re selling that product with like effectively like a lab scale manufacturing
0:13:28 of the actual catalyst.
0:13:34 So you’re doing it in this janky, small ass way, but you’re actually doing this thing.
0:13:36 You’re making hydrogen peroxide.
0:13:37 Yeah.
0:13:38 So, okay.
0:13:40 So, so now we can fast forward a little bit.
0:13:41 So right.
0:13:47 So you, you turn this, you know, janky nights and weekend ideas into what is now a big real
0:13:48 company, right?
0:13:51 So, so where are you now?
0:13:52 Yeah.
0:13:58 So, so where we are now, so, so I think like, I’ll kind of throw out a couple of numbers.
0:14:03 So last year we shipped 200 million pounds of material, which is about 50,000 tons.
0:14:09 And so we had not driving around in your car anymore, delivering it, we actually move like
0:14:10 rail cars around now.
0:14:14 So we’ve got, we’ve got rail cars, we’ve got tanker trucks.
0:14:16 And we do a couple of different things.
0:14:21 So we, we manufacture our chemicals and bioforge one, which is our first commercial plant in
0:14:22 Houston, Texas.
0:14:25 It’s about a 10,000 ton per year plant.
0:14:29 So what are, what are, you know, what are some of the things you sell and who do you sell
0:14:30 it to?
0:14:31 Like what are some of your big products?
0:14:33 So the theme is still water.
0:14:38 So this all started with, you know, driving around pouring chemicals in people’s hot tubs,
0:14:39 right?
0:14:40 Yeah.
0:14:41 We’re still do water treatment today.
0:14:46 So you can think municipal water treatment, like a wastewater treatment plant, cooling
0:14:53 water towers that you see outside of like hospitals in, in the energy sector.
0:14:57 There’s the stuff called produced water, which a lot of people don’t really know about every
0:14:58 barrel.
0:15:01 It comes, it’s what you get out of fracking, like when you send the water into frack, it
0:15:03 comes back and you got to deal with it.
0:15:04 Yeah.
0:15:07 The, the, kind of the, the inside joke for the upstream oil and gas guys is that they’re
0:15:09 actually water companies that make a little bit of oil.
0:15:10 Uh-huh.
0:15:11 Yeah.
0:15:14 So you get, you get like eight to 10 barrels of water per barrel of oil.
0:15:15 And you got to figure out what to do with the stuff.
0:15:16 And you got to treat it.
0:15:17 Cause like it’s nasty.
0:15:18 You got to deal with it.
0:15:19 Yeah.
0:15:20 Yeah.
0:15:21 So you’re selling to people who need to treat water.
0:15:22 What are you selling them?
0:15:23 Yeah.
0:15:26 So we sell them hydrogen peroxide today.
0:15:27 Okay.
0:15:34 So we sell, uh, corrosion control, scale control, uh, biocides, um, it’s sort of like a product
0:15:39 portfolio and our core chemistry that we make in bioforge one is a component of all these
0:15:40 different products.
0:15:43 And is it a lot of hydrogen peroxide in terms of what you’re actually making is still hydrogen
0:15:45 peroxide, like a core product?
0:15:48 So our core product now is actually organic acids.
0:15:49 Okay.
0:15:50 Yep.
0:15:51 So, so we still sell hydrogen peroxide.
0:15:56 Um, we’re, we’re one of the largest sellers of peroxide in Texas actually, uh, but we
0:16:00 essentially progressed the technology further where we actually use the hydrogen peroxide
0:16:03 that we make in process to actually make other chemicals.
0:16:04 Uh-huh.
0:16:10 Um, and so, so you mentioned bioforge one, I mean, what you have is essentially a chemical
0:16:11 factory, right?
0:16:15 You’ve built a chemical factory, but it’s a new kind of chemical factory.
0:16:20 And so we talked about the like little lab scale version that you started with.
0:16:24 Tell me about, about bioforge one, about the chemical factory you have now, just like I
0:16:27 come up on the street, what do I see?
0:16:31 You see a big tube in the air that’s like two school buses stacked on top of each other.
0:16:35 And then you see like kind of like a metal, like, like a metal chimney or something.
0:16:41 Big metal tube, uh, that’s got all the enzymes inside and then, and then you see a pipe rack,
0:16:45 uh, like a big green pipe rack, uh, and then a bunch of tanks.
0:16:46 And so, and, and what happens there?
0:16:50 I mean, like, what’s the, you’re not using oil or gas, right?
0:16:52 As your input, what’s your, what’s your input?
0:16:55 We consume railcars of corn syrup.
0:16:56 Okay.
0:17:01 So railcars of corn syrup come in, they go into these tanks, and then we oxidize the
0:17:02 corn syrup in our enzyme reactor.
0:17:03 Okay.
0:17:07 Then we, we make what’s called a metastable intermediate.
0:17:11 We oxidize that metastable intermediate in our metal oxidation reactor.
0:17:14 So sort of first reactor’s GORA, second reactor’s Sean.
0:17:18 And what comes out is like some set of potential chemicals, depending on what, of people are
0:17:24 buying a hydrogen peroxide or, uh, organic acid or whatever, you can sort of direct it.
0:17:27 We’re, we’re, we’re able to tune the product mix.
0:17:30 Right now we’re focused on a molecule called glucaric acid.
0:17:31 Okay.
0:17:36 And then, you know, we put it in tanks and we sell it to people.
0:17:46 We’ll be back in just a minute.
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0:18:34 I’ve personally seen Sam resolve a hundred million dollar issue in a 30 minute phone
0:18:37 call, 15 minute phone call.
0:18:41 In this season of Foundering, we’ll take you inside Open AI.
0:18:47 It’s a story of feuds, betrayals, billionaires, and maybe the extinction of humanity.
0:18:53 And it’s also the story of Sam Altman, maybe our future AI overlord.
0:19:02 Listen to Foundering, the open AI story wherever you get your podcasts.
0:19:09 And so is the sort of core ongoing work that you’re doing like optimizing enzymes to make
0:19:10 different chemicals?
0:19:16 I mean, is that the fundamental sort of technical thing you are endlessly working on and trying
0:19:17 to develop?
0:19:18 Yeah.
0:19:24 So it’s actually just a handful of different enzymes and a handful of metal catalysts that
0:19:29 you can then kind of like plug and play in the reactor to make all the different chemicals
0:19:30 that you want.
0:19:32 So do you feel like you’re done on that side?
0:19:37 What are you trying to figure out in the sort of production side?
0:19:42 So what you’re trying to do for at different stages, right?
0:19:46 So at the plant level, what you’re trying to do is run the plant for months and months
0:19:47 and months.
0:19:49 Continuously, you’re trying to reduce your cost over time.
0:19:50 Right.
0:19:51 It’s sort of…
0:19:55 There’s this classic industrial economics, like you want the plant to be producing all
0:19:59 the time because you got to pay all this money for the plant and when it’s not making a thing
0:20:01 you can sell, that’s bad.
0:20:02 Yeah.
0:20:04 And you’re trying to show like you’re trying to raise like project financing.
0:20:07 So we just closed the Department of Energy’s loan.
0:20:08 You have a lot of money, right?
0:20:10 You just get loaned for how much?
0:20:12 It was like a $214 million.
0:20:17 And that’s to build a second facility in Marshall, Minnesota.
0:20:21 And so like for that type of later stage debt, what you need to show is not just like, “Hey,
0:20:24 I’ve got this stuff working in a lab,” and not even that like, “Hey, I have this working
0:20:25 at scale.”
0:20:30 It’s that I’m making money at scale, right, that I’m running this thing for months and
0:20:36 months and months, years, and it’s very reliable and the customers are satisfied.
0:20:40 And so are you there on that one?
0:20:45 Like is the factory you built, I mean, I know is it profitable, is it a complicated question
0:20:48 based on different assumptions or whatever, but like is it profitable?
0:20:49 Yeah.
0:20:50 Yeah.
0:20:53 So actually it was really funny because when the independent engineer came to view, so
0:20:56 our first commercial plant, it’s first commercial for Soligen.
0:20:59 For other folks, they would probably call it a demo plant.
0:21:02 Because it’s small given the scale of the petrochemical industry?
0:21:03 Yeah.
0:21:05 It’s only 10,000 tons per year, which is a pretty small scale.
0:21:10 Most chemical plants are 100,000 tons per year, 500,000, some of them are like 2 million
0:21:12 tons per year, they’re crazy.
0:21:16 And the independent engineer was like, “Yeah, I’ve been to like 100 something demo plants.
0:21:18 I’ve never been the one that’s like cash flowing.”
0:21:22 Because typically people build these things, they run it for like the shortest amount of
0:21:24 time to make the debt people happy and then they turn the thing off because they lose
0:21:27 money with every sale.
0:21:32 And is there a technical reason why you can have a smaller plant be profitable?
0:21:34 Do you sell your product for more?
0:21:36 Is there like a green premium on it?
0:21:38 No, it says two things.
0:21:42 So the first one is we’re starting with specialty chemicals, not commodity chemicals.
0:21:46 So like I don’t want to be selling a molecule to somebody, I want to be selling a solution
0:21:48 to the problem.
0:21:52 So the output, the thing you’re selling is has a higher markup built into it, basically?
0:21:53 Yeah.
0:21:57 And it’s like we’re going to market direct, we’re not trying to sell through distribution.
0:22:02 And then the second is that we can build small plants faster, right?
0:22:07 So like we only have three unit ops, we don’t have 15 unit ops, we have higher yields.
0:22:14 So like imagine if you just go for simple math, if I have to buy 100 pounds of raw material
0:22:18 to make 100 pounds of product, but my competitor has to buy 200 pounds of raw material to make
0:22:24 100 pounds of product, their cost structure is two X mine exactly.
0:22:25 Okay.
0:22:30 So I think you were giving me reasons you can be profitable at smaller scale.
0:22:32 Are there more or are we done with that?
0:22:36 Well, I would say there’s also like a nuance and a caveat in terms of like how the chemicals
0:22:40 industry works that I just find this to be particularly fascinating.
0:22:46 So you can have structurally differentiated margins from the standpoint of like, you know,
0:22:49 sawage is better yields, that’s great.
0:22:53 But then what you don’t want to do is compete against someone else’s depreciated catbacks.
0:22:54 Right.
0:22:59 Meaning they built the factory 30 years ago, they don’t have to pay for it anymore.
0:23:04 So they can just essentially treat it as free and then they will always be able to underprice
0:23:05 you.
0:23:06 Exactly.
0:23:09 They’ve got a really diversified set of chemicals that they’re making.
0:23:11 And so like if you try to go head to head against them.
0:23:16 A conglomerate like Dow or DuPont, like a giant chemical company that I have heard of even
0:23:18 though I don’t know about this business.
0:23:19 Exactly.
0:23:20 Right.
0:23:25 So like if you start going in there and putting new chemicals on the market, right, and lowering
0:23:29 that price as a result, they can actually run at a loss for years.
0:23:30 Forever.
0:23:31 Forever.
0:23:36 The amount of revenue that you have is so trivial to them that they could just underprice
0:23:37 you forever.
0:23:38 Exactly.
0:23:41 And so like it’s one of the things I find the most fun about the chemical industry is
0:23:43 like the market entry strategy on like, well, what?
0:23:47 Because like it’s always like we can, we have all sorts of patents on all these different
0:23:48 chemicals.
0:23:49 It’s like, what do you launch first?
0:23:50 What do you launch second?
0:23:52 Like why are you launching these chemicals next?
0:23:56 Well, like it reminds me of the hydrogen peroxide for the float spa, right?
0:24:01 It’s like this weird little market that really cares and that you can sell at a premium too.
0:24:05 I mean, have you essentially been able to keep doing that in kind of broader concentric
0:24:07 circles, bigger markets?
0:24:08 That’s precisely it.
0:24:13 And so like our most immediate goal is like have a network of bioforges that are selling
0:24:16 specialty chemicals that are paying for themselves.
0:24:17 They’re depreciating.
0:24:18 They’re profitable.
0:24:22 And then we come back around and we start bolting on the capabilities to make more of
0:24:25 the commodity chemicals in the future.
0:24:31 So like right now, like why, I get why the float spa people were willing to pay you more
0:24:33 for hydrogen peroxide.
0:24:35 Why are people willing?
0:24:39 Like what is it that you’re selling now that is like, you know, you’re particularly able
0:24:41 to sell at a profit at the scale you’re at now?
0:24:42 Yes.
0:24:47 So let’s talk about on the water treatment side.
0:24:52 So on the water treatment side, let’s say you’re a municipality and you’re trying to
0:24:54 clean up your water.
0:24:59 If ultimately what you’re measuring is like, here’s my cost and I’m spending on chemicals
0:25:01 to get my water clean.
0:25:04 And if we come in with a package that is cheaper than how much you’re spending to get that
0:25:10 same cleanliness, that’s that’s a value that’s price per performance.
0:25:11 Sure.
0:25:13 And then the second is security of supply.
0:25:17 So so a lot of these different chemicals are all made in China and they spend eight weeks
0:25:18 on the water.
0:25:23 And then I would say sustainability tends to be the third, but we’re never essentially
0:25:26 selling chemicals at a premium.
0:25:30 We’re trying to match or be better than price and performance.
0:25:36 And can you you can do as good or better on price because you’re disintermediating essentially
0:25:41 because for other sellers, it’s sort of going through multiple middlemen who are all taking
0:25:44 a cut and you can make the final product.
0:25:46 You can go from input to final product.
0:25:47 Exactly.
0:25:51 So if we think about like a municipality can’t take that supply chain risk, they can’t wait
0:25:53 eight weeks on the water for chemicals to come.
0:25:55 So it has to go through distribution.
0:26:00 And so a lot of the chemicals that we compete against today that are imported from China,
0:26:04 they like we estimate they change hands on average about five times before they reach
0:26:06 that end use customer.
0:26:11 And as Bezos said, their margin is your opportunity.
0:26:14 So let’s talk about this sort of medium term, right?
0:26:19 So you’re now well, what’s what more or less your revenue now?
0:26:23 So so we’re we’re on the order of a hundred million a year.
0:26:24 Okay.
0:26:28 So like definitely a real business.
0:26:33 But the scale of the petrochemical industry is giant.
0:26:39 What hundreds of billions a year, maybe trillions a year globally or globally it’s in the trillions.
0:26:48 So I mean, is your dream that you will be the like Dow chemical of a new century?
0:26:50 Like is that the is that the big dream?
0:26:51 Yeah.
0:26:56 I mean, I would say the big dream is decarbonization of chemicals, right?
0:27:00 And sort of I don’t think these that chemical plan should be this sort of like pariah where
0:27:03 you don’t want them around you or in your community.
0:27:07 Like manufacturing is essential to supporting all of us.
0:27:11 And so like what I see is sort of like this network of sustainable manufacturing plants
0:27:15 that, you know, people view as safe and they view them as a good part of the community.
0:27:17 They create clean green jobs.
0:27:22 They’re making chemicals that support our families and, you know, they’re not harming
0:27:23 the planet.
0:27:27 And I think the technology exists to do that today and every year it’s getting better and
0:27:28 better.
0:27:34 And so, you know, what I view as the role of solidion is like, how do we get those technologies
0:27:39 to scale as fast as possible and get those products, you know, seeding the chemicals
0:27:41 transition as quickly as possible?
0:27:43 Is anybody else doing what you’re doing?
0:27:45 Like it seems to make a lot of sense.
0:27:47 I’m sold that it makes sense.
0:27:49 Are there people trying to do what you’re trying to do?
0:27:50 Yeah.
0:27:54 I mean, so, so like I think sustainable chemistry, green chemistry in general, there’s there’s
0:27:56 all sorts of people that are in this space.
0:28:00 Like I know you talked to C16, right, as an example.
0:28:03 And so that’s a fermentation approach to make oils.
0:28:04 And so…
0:28:05 Yes.
0:28:06 I mean, that’s a very niche.
0:28:10 It seems like a different niche, but yeah, it’s an interesting comparison.
0:28:11 Yeah.
0:28:12 Well, it’s just there’s a lot of people in the space.
0:28:17 I would say solidion from a technology standpoint, I think at this point, we’re broadly what
0:28:21 I would consider like an N of one company.
0:28:24 We’ve captured a lot of the IP patent white space.
0:28:26 We’ve gotten to scale very quickly.
0:28:31 And you know, our roadmap in front of us right now, I’m coining idea to tanker truck.
0:28:35 Like I want to, I want to take an idea from a lab and I want to get it to a tanker truck
0:28:37 scale in like 18 months.
0:28:39 And how long does it take you now?
0:28:45 So our first idea to tanker truck, I guess, was 2016 to 2021.
0:28:47 That’s hydrogen peroxide.
0:28:49 That was like Home Depot to tanker truck.
0:28:50 Exactly.
0:28:51 Right.
0:28:56 And then I now with all the capabilities we build in Houston, I think we can do it in
0:28:59 18 months.
0:29:04 If you look at sort of historical chemicals industry, I did a tanker truck is like a 10
0:29:05 year process.
0:29:10 So now we’ve got this whole white space that uses enzymes and metal catalysts to convert
0:29:11 corn to chemicals.
0:29:17 So is the idea not only can you make, you know, make from corn what people have been making
0:29:21 from fossil fuels, but also maybe there’s a whole new universe of things that you can
0:29:22 make.
0:29:24 There’s a whole new universal molecules that we can make.
0:29:30 So like, like one outthrow out there is like, so when we make Lucaric acid, we go through
0:29:34 this metastable intermediate and it’s a weird molecule.
0:29:37 It’s called Glucodialdos, very strange molecule.
0:29:41 You can’t even buy this on the internet and like gram quantities.
0:29:43 So weird you cannot buy it on the internet.
0:29:45 You cannot buy it on the internet, right?
0:29:47 And that’s, I mean, if you can’t buy it on the internet, it must be.
0:29:48 Does it even exist?
0:29:49 Does it even exist?
0:29:50 Right?
0:29:51 Yeah.
0:29:56 And we can’t really make thousands of tons per year of this and it’s like, we’re processing
0:29:59 it forward to Glucaric acid because we have all these customers for Glucaric acid, but
0:30:04 like each molecule that we make goes through this really unique intermediate.
0:30:07 There’s a whole world of opportunity there in terms of all these different sort of untapped.
0:30:09 What do you think it might be good for?
0:30:11 Like take a guess.
0:30:12 Okay.
0:30:14 So here’s a fascinating one.
0:30:17 It is, so figure glucose is sugar, right?
0:30:18 That’s what you’re making.
0:30:20 I mean, we all live off of glucose, right?
0:30:24 Glucodialdos is glucose with two aldehydes and it’s actually a biocidal.
0:30:27 So it actually kills bacteria.
0:30:32 And so like one of the molecules that is sort of a big market in some of the space service
0:30:36 called Glutaraldehyde, it’s got two aldehydes and it’s made from oil.
0:30:37 Okay.
0:30:40 Could you use Glucodialdos to replace Glutaraldehyde?
0:30:44 And now you have like a sugar that is somehow toxic and can kill bugs and like clean and
0:30:46 disinfect like that’s crazy.
0:30:51 And so, you know, this is like, if this to me is like a really key one on the chemical
0:30:52 transition, right?
0:30:56 So it’s just like the energy transition, the chemical transition is like how do, how do
0:30:58 we get sustainable chemicals into all the products around us?
0:31:03 All the things that we use every day, right?
0:31:05 Right now they’re all made from oil, coal, natural gas.
0:31:11 How do we steadily introduce bio manufactured and recycled circular materials, versions
0:31:14 of those into them over time?
0:31:17 So that we don’t have to make them from fossil fuels anymore.
0:31:18 Exactly.
0:31:23 And, you know, if I give you a concrete example is actually the Biden bioeconomy executive
0:31:24 order.
0:31:26 This was from about two years ago.
0:31:32 This one, it calls for 30% of all US chemicals to be bio manufactured in the next 20 years.
0:31:34 So like that essentially sets a target for the chemicals transition.
0:31:40 It says, hey, in 20 years, 30% of the products should have like 30% of them bio manufactured
0:31:41 over that time frame.
0:31:42 And that’s you.
0:31:43 We’re trying.
0:31:58 We’ll be back in a minute with the Lighting Round.
0:32:04 I’ve personally seen Sam resolve a hundred million dollar issue in a 30 minute phone
0:32:06 call, 15 minute phone call.
0:32:11 In this season of Foundering, we’ll take you inside OpenAI.
0:32:17 It’s a story of feuds, betrayals, billionaires, and maybe the extinction of humanity.
0:32:23 And it’s also the story of Sam Altman, maybe our future AI overlord.
0:32:28 Listen to Foundering, the open AI story wherever you get your podcasts.
0:32:32 Let’s do the lightning round.
0:32:40 I understand earlier in your career, you were a cocoa puff engineer at General Mills,
0:32:41 true?
0:32:42 Yes, yes.
0:32:46 What was the hardest cocoa puff problem you worked on?
0:32:54 So cocoa puff, what I love about it is it’s a late stage capitalism.
0:32:56 And so they’ve been around since 1950s.
0:33:02 And so what we were focused on was, how do you make the cocoa puff glossy and frosty
0:33:05 for different markets?
0:33:09 So different geographies have a different visual appeal for like, should it be frostier?
0:33:10 Should it be glossier?
0:33:13 Meaning, in different places, people have different preferences?
0:33:14 They have different preferences.
0:33:21 And so the US is shiny and not particularly frosty.
0:33:26 But then Southeast Asia is actually more frosty and matte.
0:33:31 And you have to sort of change the chemistry to deliver it to everybody’s likes?
0:33:35 Because you’re crystallizing sugar on top of a kick cereal.
0:33:36 That’s what cocoa puffs is.
0:33:41 And so you have to tune the crystallization process to make it shinier, frostier, matte.
0:33:46 And so I actually coated cocoa puffs in gold and put them in scanning electron microscopes.
0:33:48 Coated them with literal gold?
0:33:49 With literal gold.
0:33:51 And I have a whole box of gold cocoa puffs.
0:33:52 Why not?
0:33:53 Why not is the question.
0:33:54 You win.
0:33:58 You still have gold cocoa puffs?
0:33:59 Absolutely.
0:34:00 That’s amazing.
0:34:01 Yeah, they’re pretty cool.
0:34:04 It’s hard to imagine you will ever do anything that meaningful again, but good luck, it’s
0:34:05 all you, Jim.
0:34:08 It’s the most delicious time in my career.
0:34:09 Did you eat a gold cocoa puff?
0:34:11 Yeah, they’re totally harmless.
0:34:12 Yeah, right.
0:34:13 You can eat gold.
0:34:14 You can eat gold, yeah.
0:34:15 Why not, I suppose?
0:34:23 As an engineer, what cereal do you admire the most other than cocoa puffs?
0:34:26 So as a food product, I admire gushers the most.
0:34:30 So they’re like kind of a gooey candy and you bite into it and some liquid shoots out?
0:34:31 Some liquid shoots out.
0:34:35 It’s an exceptionally innovative, complex manufacturing process that was like specially
0:34:36 built to make gushers.
0:34:42 We’re getting all the rain, yeah, yeah.
0:34:44 Oh, does that sound rain on the roof of the trailer?
0:34:47 Yeah, yeah, it’s really coming down now.
0:34:48 Okay.
0:34:52 Home Depot or Lowe’s?
0:34:58 So Home Depot for Wood, Lowe’s for plumbing parts.
0:35:00 That is a robust answer.
0:35:02 That’s a varsity answer.
0:35:04 Just better prices, better selection?
0:35:08 I think it’s about selection for both of them because if you’re going to Home Depot or Lowe’s,
0:35:09 you’re in a jam.
0:35:12 That means I messed up on my parts ordering list and something didn’t come in.
0:35:13 I see.
0:35:14 And so I’m quickly running out there.
0:35:19 So you actually go to Home Depot or Lowe’s to build your $100 million in your factory?
0:35:20 Oh, yeah.
0:35:21 So you’re going for real.
0:35:24 I am just screwing around at Home Depot.
0:35:26 You have high stakes when you go to Home Depot or Lowe’s.
0:35:29 Well, so typically, if I need a part from Home Depot or Lowe’s, it’s because I really
0:35:34 messed up the design of some aspect and it’s like we’re really going to do a patchwork
0:35:36 job to just try to get it going.
0:35:37 Yes.
0:35:38 What’s the most underrated chemical?
0:35:44 I mean, I don’t think the public appreciates any of the chemicals that they use every day
0:35:48 or really like how important they are and all the work and effort that goes into making
0:35:49 them.
0:35:52 Like what’s astounding to me is if I look at a bottle of water on a store shelves, it
0:35:58 blows my mind because the effort in making that plastic and the science is so complex
0:36:03 and the costs are so astronomical and yet you’re buying it for the water.
0:36:07 You’re just saying the bottle alone is an engineering miracle.
0:36:11 The bottle alone is an engineering miracle because it’s an incredible material and it’s
0:36:14 so crystal clear and everything.
0:36:20 That plastic has a higher specification than pharmaceuticals in terms of purity and yet
0:36:23 we’re just being like it’s for water and the bottle’s free.
0:36:24 It’s garbage.
0:36:25 It’s basically garbage.
0:36:28 It’s mind blowing to be still.
0:36:29 Do you have a white whale?
0:36:34 Is there one chemical you really want to be able to sell that you haven’t figured out
0:36:36 yet?
0:36:39 So I think it’s two.
0:36:45 So nylon and like my dream there is actually cardboard as the feedstock.
0:36:50 So cardboard, recycled cardboard is actually like just sugar polymers.
0:36:53 It’s the same thing as starch from corn.
0:36:55 So it’s actually a really great feedstock for us.
0:36:57 Just like a cardboard box that I break down.
0:37:02 Yeah because cardboard, it gets recycled like 12 times from cradle to cradle but the fibers
0:37:05 get smaller and smaller and it eventually gets landfill to burn.
0:37:10 Those really small fibers would be incredible feedstocks for our plant and then we have
0:37:14 a process technology for making nylon and so to me it’s like it would just be like to
0:37:19 me that’s like a total end state of like just victory if we’re doing cardboard to nylon.
0:37:21 I feel like you should call Patagonia.
0:37:23 I feel like they’ll pay a premium for that.
0:37:24 I know.
0:37:27 The challenge that with all these clothing retailers is like that’s where the sustainability
0:37:32 impact is but they buy just like a fractional percent of the volume in the market.
0:37:36 So you need to figure out how to do it for real and not rely on the green premium and
0:37:41 actually use garbage cardboard to make good nylon that you can sell at a commodity price.
0:37:46 And then figure like most nylon manufacturers in China it’s depreciated assets now.
0:37:49 You’re going to build this whole brand new shiny thing to go do it so you have all of
0:37:51 those types of issues and everything.
0:37:52 Hence the white whale.
0:37:53 Hence the white whale.
0:37:57 But I think we can eventually get there like to me that’s like I’ve got 40 years of work
0:37:58 ahead of me.
0:37:59 Right.
0:38:01 I think we can do that one coming up here.
0:38:04 I like the long view.
0:38:10 So your co-founder says and this is a quote if I if I’ve got it right you’re terrible
0:38:11 at poker.
0:38:12 Yeah.
0:38:13 Is that true?
0:38:14 Yeah.
0:38:15 Yeah.
0:38:20 I’m really there to crack jokes to have a good time to drink some beer and to lose
0:38:22 a predetermined amount of money.
0:38:23 Oh you’re great for everybody else.
0:38:26 So everybody loves to see you walk up to the table.
0:38:27 Yeah.
0:38:28 Yeah.
0:38:29 No.
0:38:30 I’m always invited.
0:38:31 I have a fun one for you.
0:38:34 Do you know I’m a semi-professional juggler?
0:38:39 Like what’s the frontier of your, wait what does semi-professional mean in the context
0:38:40 of juggling?
0:38:41 You get paid sometimes?
0:38:49 I have been paid on occasion to juggle at one point I competed in a national combat
0:38:50 juggling tournament.
0:38:51 Combat.
0:38:52 Combat juggling.
0:38:53 It’s one about.
0:38:56 Like you’re, it’s boxing crossed with juggling, you’re juggling weapons.
0:39:00 20 people standing in a circle, they fight until the last person’s juggling.
0:39:01 Seriously?
0:39:02 It’s amazing.
0:39:05 You can watch it on YouTube and please petition for it to be in the Olympics.
0:39:09 It’s like a juggling battle royale and you’re just trying to make the other dude mess up
0:39:10 without messing up yourself.
0:39:14 I have a whole strategy so like I run to the edge of the arena and I let all this collateral
0:39:15 damage happen.
0:39:16 Okay.
0:39:18 Then there’s a whole bunch of spare balls that are on the field.
0:39:20 You only have to be juggling three balls.
0:39:22 So I pick them up and I go in like four and five ball juggling.
0:39:26 And then I stand at the edge of the arena and I snipe people with my extra balls.
0:39:27 Wow.
0:39:28 Yeah, works for you.
0:39:32 Use that a metaphor for running your company.
0:39:33 Maybe.
0:39:34 Maybe.
0:39:35 I kind of, I kind of fluctuates.
0:39:38 I always feel like every day I’m getting punched in the face with by capitalism.
0:39:39 But there’s just.
0:39:40 Interesting.
0:39:42 But there’s just all these incredible tailwinds and.
0:39:46 When you say you feel like you’re getting punched in the face every day by capitalism,
0:39:47 what do you mean?
0:39:52 Well, I think, I think the world exists to try to kill startups kind of from, from every,
0:39:53 every direction, right?
0:39:56 Cause you’re trying to do something different and, and I would say, especially selling like
0:40:01 in B2B, there’s a natural inclination to just do what you’ve always been doing, right?
0:40:04 And try, try to overcome that is difficult.
0:40:07 A natural inclination on the part of the buyers.
0:40:11 Like it’s some, somebody at like some municipal water plant, like they don’t want to hear
0:40:12 from you.
0:40:15 They’re not going to get in trouble buying the same chemical that they’ve been buying
0:40:17 at that plant for 30 years.
0:40:18 Exactly.
0:40:21 And so like, and I feel like everyone we talked to, they’re all, they can all say the same
0:40:24 thing on like their concern about the climate, their concern about these different things.
0:40:29 But then I think people underestimate their own ability to effectuate that change.
0:40:31 Even just someone, they’re being like, Hey, I’m going to switch to a different vendor.
0:40:33 I’m going to try this out.
0:40:36 Like that, that, that there is like, if, if you did that for all these different startups
0:40:40 that are working in sustainable chemicals, the part I get pessimistic about is rate of
0:40:41 adoption.
0:40:45 It’s really just, just that, like the technology piece, like I, we’re going to get there humans
0:40:46 are super ingenious.
0:40:48 I think a lot of the technologies are actually already here.
0:40:49 They’re a bit nascent.
0:40:52 They need to be deployed, but it’s that, it’s that rate.
0:40:55 That’s, that’s the part to me that I think is the most important.
0:40:56 The urgency.
0:40:57 The urgency.
0:40:58 Exactly.
0:41:08 Sean Hunt is the co-founder and CTO of Solugin.
0:41:10 Today’s show was produced by Gabriel Hunter Chang.
0:41:15 It was edited by Lydia Jean Cot and engineered by Sarah Brugier.
0:41:19 You can email us at problem@pushkin.fm.
0:41:32 I’m Jacob Goldstein and we’ll be back next week with another episode of What’s Your Problem?
0:41:37 Hey, it’s Jacob.
0:41:43 There’s no shortage of tech podcasts, but few actually give you a true dose of the future.
0:41:46 The A16Z podcast is the exception.
0:41:50 The chart-topping show from Andreessen Horowitz brings you to the world’s most influential
0:41:56 people, people who have a track record of being both early and right, like Apple co-founder
0:42:02 Steve Wozniak or A16Z co-founders Mark Andreessen and Ben Horowitz.
0:42:05 Not to mention folks you don’t typically get to hear from.
0:42:10 From the very first CTO of the CIA to the chief security officers behind open AI and
0:42:12 thropic and deep mind.
0:42:17 These guests tackle the most important trends in technology, from space to supply chains
0:42:19 and beyond.
0:42:22 Want to understand the science and supply of GLP-1s?
0:42:24 They recently broke this down.
0:42:25 Did you tune into the Olympics?
0:42:28 They just covered the technology behind the Olympics.
0:42:32 Wondering if autonomous vehicles are still miles away?
0:42:33 Listen to find out.
0:42:35 So, go ahead.
0:42:38 Ease drop on the future with the A16Z podcast.
0:00:17 phone call.
0:00:22 In this season of Foundering, we’ll take you inside OpenAI.
0:00:28 It’s a story of feuds, betrayals, billionaires, and maybe the extinction of humanity.
0:00:34 And it’s also the story of Sam Altman, maybe our future AI overlord.
0:00:39 Listen to Foundering, the OpenAI story, wherever you get your podcasts.
0:00:45 I’m just listening to that’s the walkie-talkie again.
0:00:46 Yeah.
0:00:49 I’m in an operating chemical plant.
0:00:50 Fair enough.
0:00:54 So is the Bioforge, is the factory like out the window behind you?
0:00:55 You’re in a trailer.
0:00:56 Where’s the factory from where you are?
0:00:58 It’s right, right, right in front of me.
0:01:00 Could you walk outside and throw rock and hit it?
0:01:01 Yes, yes.
0:01:05 So we’re on the former side of an exploded polyethylene wax distillery.
0:01:06 It exploded?
0:01:07 Yes.
0:01:14 So I was just found in 2016, but the site that we’re on exploded in 2005.
0:01:15 So it’s what’s called a brown.
0:01:16 Did you get a deal?
0:01:17 Did you get a deal because it had blown up?
0:01:21 We got a deal, yeah.
0:01:22 So like your site is a metaphor.
0:01:29 It’s like some petrochemical plant blew up and you built a factory on top of the remains.
0:01:30 Exactly, yeah.
0:01:33 So there’s actually a chemical safety board report written about it, but it blew out every
0:01:35 window in like a five mile radius.
0:01:41 Holy cow.
0:01:45 I’m Jacob Goldstein and this is What’s Your Problem, the show where I talk to people who
0:01:48 are trying to make technological progress.
0:01:50 My guest today is Sean Hunt.
0:01:55 He’s the co-founder and CTO of a chemical company called Solugin.
0:02:00 Solugin sells around $100 million a year worth of industrial chemicals, but instead of making
0:02:05 the chemicals from fossil fuels the way they’re typically made, Solugin makes them from corn
0:02:06 syrup.
0:02:09 Sean’s problem is this.
0:02:13 How do you make the chemicals that go into everything around us, our food, our clothes,
0:02:17 our cars, without using fossil fuel?
0:02:22 We’ve talked a lot on the show about the energy transition, the move away from fossil
0:02:24 fuels as sources of energy.
0:02:30 What Solugin is really working on is the chemical transition, basically same idea, but for chemicals
0:02:32 instead of energy.
0:02:34 Solugin got its start at a poker table.
0:02:40 Sean was getting his PhD studying catalysts, in particular the kinds of catalysts that
0:02:44 are used to make industrial chemicals out of coal, oil, and gas.
0:02:49 Sitting across the table from him was another grad student, another PhD student, a guy named
0:02:52 Gorab Chakrabarti, who was studying biology.
0:02:56 In particular, he was studying enzymes in cancer cells.
0:02:59 And enzymes, as it happens, are a kind of catalyst.
0:03:02 That thing Sean was studying in a very different context.
0:03:06 So of course, Sean and Gorab started talking about catalysts.
0:03:10 Catalysts in general are used to make the physical world around you, right?
0:03:14 So the food that you eat, the clothes that you wear, the car that you drive, the house
0:03:19 that you live in, all of those things were made using catalysts.
0:03:20 Okay.
0:03:22 And this is what you’re studying in grad school?
0:03:23 Yep.
0:03:28 Meanwhile, the guy sitting across from you at the poker table, Gorab, what’s he studying?
0:03:33 So what he’s studying is like catalysts gone wild.
0:03:38 So he’s studying pancreatic cancer, and so in a cancer cell is the catalysts that are
0:03:43 in there, which are enzyme catalysts, these little folded up proteins.
0:03:49 They evolve in a really strange, very unfortunate way that is one of the reasons that cancer
0:03:52 is so bad.
0:03:55 But one of our conversations was like, you know, he’s describing these enzymes to me,
0:03:58 like, how are they operating in this kind of crazy environment?
0:04:00 Like enzymes shouldn’t be able to do that.
0:04:04 Like it, like that’s actually approaching an industrially relevant environment.
0:04:06 It’s unfortunate it’s happening inside a cancer cell, but it’s like, hey, that’s actually
0:04:09 like, that could actually have some uses.
0:04:10 Huh.
0:04:13 It’s really bad when it happens inside your body, but if you could make it happen in
0:04:15 a factory, it might be useful.
0:04:16 It might be useful.
0:04:17 Exactly.
0:04:19 Your research and his research coming together.
0:04:23 It’s like the hyper nerd version of like the Reese’s peanut butter cup, like chocolate
0:04:27 and peanut butter, but for catalysts.
0:04:32 Jacob, I have many friends, I have so many friends.
0:04:38 So okay, but as you and Gorab are talking about this, like, really, why are these enzymes
0:04:42 that he’s studying, you know, potentially useful in an industrial setting?
0:04:43 Yeah.
0:04:47 So, so if you think about it, like, what does, what does the enzyme have to offer?
0:04:48 Yeah.
0:04:54 So what an enzyme can do is it could convert a raw material into a product at room temperature
0:04:55 and water with perfect yield.
0:04:57 Well, that’s the dream.
0:04:59 That’s like the cold fusion of your business.
0:05:02 I mean, yeah, enzymes are, they’re pretty much like the cold fusion of catalysis.
0:05:06 Like they, they can do everything that you want to do in a manufacturing process.
0:05:09 It’s like perfectly, but the, sounds amazing.
0:05:10 What’s the catch?
0:05:11 Well, the problem is they’re delicate.
0:05:15 So, so like historically, like they’re hard to make, they’re very expensive to make and
0:05:18 like, you know, I’ll give you an example.
0:05:22 Like, like some of the early like enzymes that you find in nature that you want to put
0:05:27 in a chemical plant, that enzyme might cost $2,000 a pound to make, right?
0:05:29 Chemicals are sold for $2 a pound, right?
0:05:30 Yeah, right.
0:05:31 And, and so.
0:05:33 And you’re making plastic, you’re making commodities.
0:05:34 You’re making commodities, right?
0:05:37 So you can’t spend $2,000 a pound for your catalyst.
0:05:41 Cause if, if you can only make like one pound of your product per pound of enzyme, you’re
0:05:42 done.
0:05:43 I mean, there’s no business to be had there.
0:05:44 You’re a thousand times off.
0:05:45 Yeah.
0:05:46 Like you’re way off, right?
0:05:47 Yeah.
0:05:52 Now, what if you could evolve that enzyme in the lab, this is called Directive Evolution,
0:05:55 and you can use machine learning, AI, there’s all sorts of cool stuff that like changes literally
0:05:57 every year on how to do this.
0:06:01 What if you could evolve that enzyme to make a hundred thousand pounds of product per pound
0:06:02 of enzyme?
0:06:03 Uh-huh.
0:06:04 Uh-huh.
0:06:05 Now, now you have a business here.
0:06:09 You could actually incorporate that enzyme into a chemical plant because you’re going
0:06:15 to consume so little of it that even though that enzyme is expensive, it has perfect yield
0:06:16 in water at room temperature.
0:06:19 I mean, that’s an incredible capability.
0:06:23 And so this, I mean, you, you mentioned like, so what if you could evolve meeting sort of
0:06:26 direct the evolution of that enzyme, right?
0:06:27 Yeah.
0:06:30 Uh, this is a relatively new idea, right?
0:06:35 Like obviously people have known about enzymes for a long time and they’re essential to like
0:06:40 everything that happens in our body, not quite, but kind of, right?
0:06:46 So this is the key idea then it’s like, what if we, everybody knows enzymes can do this,
0:06:51 but they’re not, they’re too expensive slash not efficient enough, right?
0:06:55 The amount of enzyme you have to use is too expensive given the amount of product you
0:06:56 get.
0:07:02 And you guys realize that there is this relatively recent scientific research that suggests you
0:07:08 can get enzymes to produce way more product per unit enzyme, per enzyme.
0:07:10 Exactly.
0:07:14 So like, so what do you do?
0:07:18 Kind of as this was happening, you know, I was coming up, I was on my last year and about
0:07:24 to graduate and I’m kind of having, you know, I don’t know, maybe, maybe a bit of a crisis
0:07:27 on like, I like, I really like being academia.
0:07:29 I don’t really want to go work for a big company.
0:07:32 Like I’ve worked for big companies in the past, not a huge fan.
0:07:36 And you know, it’s like, if there’s a time in my life to try something, like let’s do
0:07:37 it.
0:07:39 And Gore was kind of having a similar thing.
0:07:43 Like he, he really liked the PhD program, but then he did his final two years back in
0:07:46 med school and like was just not loving medicine.
0:07:48 And so we were like, well, what if we could make something work here?
0:07:55 And so we, we entered the MIT 100K entrepreneurship competition in 2016.
0:07:57 We got 10,000 bucks.
0:07:59 And I mean, we were super jazzed.
0:08:01 I mean, we were like, oh my gosh, like we, we have some seed money.
0:08:03 This is incredible.
0:08:07 And sort of the rest of this is sort of again, like this just like continual series of just
0:08:08 kind of lucky breaks.
0:08:09 I kind of joke.
0:08:11 I think Gore was like the luckiest person I’ve ever met.
0:08:15 So the more I’m associated with Gore, I’m the luckier, the luckier I tend to be.
0:08:16 That’s a great move.
0:08:17 Teaming up with the lucky person.
0:08:18 He’s a genius.
0:08:19 Yeah.
0:08:20 Yeah.
0:08:21 He’s got incredible, incredible luck.
0:08:24 So, so at this point, I’ve been long distance with my, my wife now, right?
0:08:25 We’ve been long just for seven years.
0:08:27 She’s like, you’re, you’re moving to Dallas.
0:08:29 I’m like, all right, well, Gorbs in Dallas, we’re going to start this thing like, let’s
0:08:30 go.
0:08:31 Okay.
0:08:37 So we rent some lab space right behind Dallas Lovefield Airport, like 400 bucks a month.
0:08:44 We go to Home Depot to build, like let’s build, approve a concept reactor and, you
0:08:50 know, let’s, let’s do, you know, a basic enzyme and try to make hydrogen peroxide.
0:08:51 Okay.
0:08:55 And what was really fortunate was our pitch video to the 100 count entrepreneurship competition
0:09:03 got shared to a Facebook group of float spa owners, a float spa, a float spa.
0:09:04 Yeah.
0:09:10 So these are saltwater hot tubs that are like isolation chambers.
0:09:14 And like, it’s like a sensory deprivation tank, sensory deprivation tanks.
0:09:23 And it was like a really like nascent industry, pretty much created by Steph Curry and because
0:09:24 he’s into it.
0:09:30 Well, maybe I’ll be able to drain threes all day if I go to a sensory deprivation
0:09:31 tank.
0:09:33 The one, the one common thing when you talk to all the owners of these float spas are
0:09:35 like Steph Curry did so much for this industry.
0:09:36 Wow.
0:09:37 Okay.
0:09:38 So it’s a common thing.
0:09:41 So why does your video get like, what’s the connection?
0:09:44 So one of the float spa owners thought this was the coolest thing.
0:09:49 They have like trouble buying peroxide, they have trouble handling it.
0:09:50 Do they need peroxide?
0:09:51 I don’t get the link.
0:09:55 They use peroxide to clean the hot tubs in between people going in and out.
0:09:58 So if you kind of think about it, it’s a little bit like you’re going in and out of
0:09:59 a hot tub over and over again.
0:10:00 Yeah, nasty.
0:10:01 Super nasty.
0:10:02 Yes.
0:10:03 You got to clean it.
0:10:06 Well, I mean, you can buy peroxide at Walgreens.
0:10:08 You can buy peroxide at the drug store.
0:10:10 What’s the, why don’t they just do that?
0:10:11 What’s going on?
0:10:15 So you can, but they use a more concentrated peroxide.
0:10:20 And so it’s got some, you know, shipping, it ships hazmat, things like that.
0:10:22 And so they’re also environmentally conscious.
0:10:24 So, so I think they also found it fascinating.
0:10:27 I was like, Hey, these guys are going to make peroxide and they’re doing it in a more sustainable
0:10:28 way.
0:10:32 And so we got like inbound on like, Hey, if you make this, we’ll buy it.
0:10:33 Okay.
0:10:34 That’s amazing.
0:10:35 Yes.
0:10:36 We’re like, this is really cool.
0:10:40 So, you know, built this little, it was like $7,000 all in like air compressor from
0:10:42 a depot, little PVC reactor.
0:10:45 So we’re feeding it sugar, we’re feeding it air.
0:10:50 There’s this engineered enzyme that’s like floating around inside of it and the sugar
0:10:53 and the air react inside the tube.
0:10:56 And then we have a membrane that keeps the enzyme inside.
0:10:57 Okay.
0:11:02 And then on the other side of the membrane, we get hydrogen peroxide in an organic acid.
0:11:03 Okay.
0:11:09 And is, is regular hydrogen peroxide made from petrochemicals like everything else?
0:11:10 Did I?
0:11:11 Yeah, yeah.
0:11:13 How do you get regular hydrogen peroxide?
0:11:16 It’s, it’s, it’s fairly, fairly epic.
0:11:17 Yeah.
0:11:18 Yeah.
0:11:20 I’ve been to a couple of hydrogen peroxide plants.
0:11:23 It’s a super cool process, but it’s, it’s one of those ones that’s nuts.
0:11:26 So they create this, give me the short version.
0:11:27 Yeah.
0:11:28 So what’s the input?
0:11:30 Like does it start as, as a fossil fuel?
0:11:31 Yes.
0:11:32 Yeah.
0:11:33 Yeah.
0:11:34 So it’s very hard to make cause it’s, it’s metastable.
0:11:37 That’s, that’s why it’s so useful is that it wants to decompose.
0:11:41 And when it decompose, it makes free radicals and that clean stuff.
0:11:46 And so it makes it sort of difficult to make and, and you know, somewhat, you know, hazardous
0:11:47 to make as well, right?
0:11:54 And so is this, is the enzyme you start with in your process based on Gorob’s grad school
0:11:58 thing, based on the enzyme in cancer cells that’s making hydrogen peroxide?
0:11:59 Yeah.
0:12:03 So we were, we were essentially taking, I’ll call them motifs, so essentially common motifs
0:12:08 from what you would find in this like really wonky pancreatic cancer enzyme, and then translating
0:12:12 it to more industrial relevant enzyme.
0:12:18 So basically you’re starting with the pancreatic cancer enzyme and saying, how can we kind of
0:12:25 use the tools of this enzyme to make an enzyme that we can put in our tube and have it do
0:12:26 what we want?
0:12:27 Exactly.
0:12:31 And what was pretty neat is like, to me, the neatest part is the relative scales here.
0:12:38 So like on weekends, we had like one gallon bottles of this peroxide organic acid mixture
0:12:42 and we would drive around Dallas and we’d pour it into people’s hot tubs, right?
0:12:48 Like literally, you’re like not just a scientist, you’re like, you’re like the pool boys.
0:12:49 We were the pool boys, right?
0:12:54 We had our three customers and they were super delighted, and then we learned how to like
0:12:59 do shipping online and we, you know, started shipping to the other spots, but to make that
0:13:05 one gallon bottle, we were only using like milligram quantities, like little just like
0:13:06 fine dust of enzyme.
0:13:12 So you’re getting thousand X, whatever, for every unit of enzyme, you get a thousand or
0:13:14 something units of peroxide.
0:13:15 Exactly.
0:13:20 So like it’s like a, we’re like selling this like, you know, really just like, I mean,
0:13:22 barely minimum viable product, right?
0:13:23 Yeah.
0:13:27 But like we’re selling that product with like effectively like a lab scale manufacturing
0:13:28 of the actual catalyst.
0:13:34 So you’re doing it in this janky, small ass way, but you’re actually doing this thing.
0:13:36 You’re making hydrogen peroxide.
0:13:37 Yeah.
0:13:38 So, okay.
0:13:40 So, so now we can fast forward a little bit.
0:13:41 So right.
0:13:47 So you, you turn this, you know, janky nights and weekend ideas into what is now a big real
0:13:48 company, right?
0:13:51 So, so where are you now?
0:13:52 Yeah.
0:13:58 So, so where we are now, so, so I think like, I’ll kind of throw out a couple of numbers.
0:14:03 So last year we shipped 200 million pounds of material, which is about 50,000 tons.
0:14:09 And so we had not driving around in your car anymore, delivering it, we actually move like
0:14:10 rail cars around now.
0:14:14 So we’ve got, we’ve got rail cars, we’ve got tanker trucks.
0:14:16 And we do a couple of different things.
0:14:21 So we, we manufacture our chemicals and bioforge one, which is our first commercial plant in
0:14:22 Houston, Texas.
0:14:25 It’s about a 10,000 ton per year plant.
0:14:29 So what are, what are, you know, what are some of the things you sell and who do you sell
0:14:30 it to?
0:14:31 Like what are some of your big products?
0:14:33 So the theme is still water.
0:14:38 So this all started with, you know, driving around pouring chemicals in people’s hot tubs,
0:14:39 right?
0:14:40 Yeah.
0:14:41 We’re still do water treatment today.
0:14:46 So you can think municipal water treatment, like a wastewater treatment plant, cooling
0:14:53 water towers that you see outside of like hospitals in, in the energy sector.
0:14:57 There’s the stuff called produced water, which a lot of people don’t really know about every
0:14:58 barrel.
0:15:01 It comes, it’s what you get out of fracking, like when you send the water into frack, it
0:15:03 comes back and you got to deal with it.
0:15:04 Yeah.
0:15:07 The, the, kind of the, the inside joke for the upstream oil and gas guys is that they’re
0:15:09 actually water companies that make a little bit of oil.
0:15:10 Uh-huh.
0:15:11 Yeah.
0:15:14 So you get, you get like eight to 10 barrels of water per barrel of oil.
0:15:15 And you got to figure out what to do with the stuff.
0:15:16 And you got to treat it.
0:15:17 Cause like it’s nasty.
0:15:18 You got to deal with it.
0:15:19 Yeah.
0:15:20 Yeah.
0:15:21 So you’re selling to people who need to treat water.
0:15:22 What are you selling them?
0:15:23 Yeah.
0:15:26 So we sell them hydrogen peroxide today.
0:15:27 Okay.
0:15:34 So we sell, uh, corrosion control, scale control, uh, biocides, um, it’s sort of like a product
0:15:39 portfolio and our core chemistry that we make in bioforge one is a component of all these
0:15:40 different products.
0:15:43 And is it a lot of hydrogen peroxide in terms of what you’re actually making is still hydrogen
0:15:45 peroxide, like a core product?
0:15:48 So our core product now is actually organic acids.
0:15:49 Okay.
0:15:50 Yep.
0:15:51 So, so we still sell hydrogen peroxide.
0:15:56 Um, we’re, we’re one of the largest sellers of peroxide in Texas actually, uh, but we
0:16:00 essentially progressed the technology further where we actually use the hydrogen peroxide
0:16:03 that we make in process to actually make other chemicals.
0:16:04 Uh-huh.
0:16:10 Um, and so, so you mentioned bioforge one, I mean, what you have is essentially a chemical
0:16:11 factory, right?
0:16:15 You’ve built a chemical factory, but it’s a new kind of chemical factory.
0:16:20 And so we talked about the like little lab scale version that you started with.
0:16:24 Tell me about, about bioforge one, about the chemical factory you have now, just like I
0:16:27 come up on the street, what do I see?
0:16:31 You see a big tube in the air that’s like two school buses stacked on top of each other.
0:16:35 And then you see like kind of like a metal, like, like a metal chimney or something.
0:16:41 Big metal tube, uh, that’s got all the enzymes inside and then, and then you see a pipe rack,
0:16:45 uh, like a big green pipe rack, uh, and then a bunch of tanks.
0:16:46 And so, and, and what happens there?
0:16:50 I mean, like, what’s the, you’re not using oil or gas, right?
0:16:52 As your input, what’s your, what’s your input?
0:16:55 We consume railcars of corn syrup.
0:16:56 Okay.
0:17:01 So railcars of corn syrup come in, they go into these tanks, and then we oxidize the
0:17:02 corn syrup in our enzyme reactor.
0:17:03 Okay.
0:17:07 Then we, we make what’s called a metastable intermediate.
0:17:11 We oxidize that metastable intermediate in our metal oxidation reactor.
0:17:14 So sort of first reactor’s GORA, second reactor’s Sean.
0:17:18 And what comes out is like some set of potential chemicals, depending on what, of people are
0:17:24 buying a hydrogen peroxide or, uh, organic acid or whatever, you can sort of direct it.
0:17:27 We’re, we’re, we’re able to tune the product mix.
0:17:30 Right now we’re focused on a molecule called glucaric acid.
0:17:31 Okay.
0:17:36 And then, you know, we put it in tanks and we sell it to people.
0:17:46 We’ll be back in just a minute.
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0:18:34 I’ve personally seen Sam resolve a hundred million dollar issue in a 30 minute phone
0:18:37 call, 15 minute phone call.
0:18:41 In this season of Foundering, we’ll take you inside Open AI.
0:18:47 It’s a story of feuds, betrayals, billionaires, and maybe the extinction of humanity.
0:18:53 And it’s also the story of Sam Altman, maybe our future AI overlord.
0:19:02 Listen to Foundering, the open AI story wherever you get your podcasts.
0:19:09 And so is the sort of core ongoing work that you’re doing like optimizing enzymes to make
0:19:10 different chemicals?
0:19:16 I mean, is that the fundamental sort of technical thing you are endlessly working on and trying
0:19:17 to develop?
0:19:18 Yeah.
0:19:24 So it’s actually just a handful of different enzymes and a handful of metal catalysts that
0:19:29 you can then kind of like plug and play in the reactor to make all the different chemicals
0:19:30 that you want.
0:19:32 So do you feel like you’re done on that side?
0:19:37 What are you trying to figure out in the sort of production side?
0:19:42 So what you’re trying to do for at different stages, right?
0:19:46 So at the plant level, what you’re trying to do is run the plant for months and months
0:19:47 and months.
0:19:49 Continuously, you’re trying to reduce your cost over time.
0:19:50 Right.
0:19:51 It’s sort of…
0:19:55 There’s this classic industrial economics, like you want the plant to be producing all
0:19:59 the time because you got to pay all this money for the plant and when it’s not making a thing
0:20:01 you can sell, that’s bad.
0:20:02 Yeah.
0:20:04 And you’re trying to show like you’re trying to raise like project financing.
0:20:07 So we just closed the Department of Energy’s loan.
0:20:08 You have a lot of money, right?
0:20:10 You just get loaned for how much?
0:20:12 It was like a $214 million.
0:20:17 And that’s to build a second facility in Marshall, Minnesota.
0:20:21 And so like for that type of later stage debt, what you need to show is not just like, “Hey,
0:20:24 I’ve got this stuff working in a lab,” and not even that like, “Hey, I have this working
0:20:25 at scale.”
0:20:30 It’s that I’m making money at scale, right, that I’m running this thing for months and
0:20:36 months and months, years, and it’s very reliable and the customers are satisfied.
0:20:40 And so are you there on that one?
0:20:45 Like is the factory you built, I mean, I know is it profitable, is it a complicated question
0:20:48 based on different assumptions or whatever, but like is it profitable?
0:20:49 Yeah.
0:20:50 Yeah.
0:20:53 So actually it was really funny because when the independent engineer came to view, so
0:20:56 our first commercial plant, it’s first commercial for Soligen.
0:20:59 For other folks, they would probably call it a demo plant.
0:21:02 Because it’s small given the scale of the petrochemical industry?
0:21:03 Yeah.
0:21:05 It’s only 10,000 tons per year, which is a pretty small scale.
0:21:10 Most chemical plants are 100,000 tons per year, 500,000, some of them are like 2 million
0:21:12 tons per year, they’re crazy.
0:21:16 And the independent engineer was like, “Yeah, I’ve been to like 100 something demo plants.
0:21:18 I’ve never been the one that’s like cash flowing.”
0:21:22 Because typically people build these things, they run it for like the shortest amount of
0:21:24 time to make the debt people happy and then they turn the thing off because they lose
0:21:27 money with every sale.
0:21:32 And is there a technical reason why you can have a smaller plant be profitable?
0:21:34 Do you sell your product for more?
0:21:36 Is there like a green premium on it?
0:21:38 No, it says two things.
0:21:42 So the first one is we’re starting with specialty chemicals, not commodity chemicals.
0:21:46 So like I don’t want to be selling a molecule to somebody, I want to be selling a solution
0:21:48 to the problem.
0:21:52 So the output, the thing you’re selling is has a higher markup built into it, basically?
0:21:53 Yeah.
0:21:57 And it’s like we’re going to market direct, we’re not trying to sell through distribution.
0:22:02 And then the second is that we can build small plants faster, right?
0:22:07 So like we only have three unit ops, we don’t have 15 unit ops, we have higher yields.
0:22:14 So like imagine if you just go for simple math, if I have to buy 100 pounds of raw material
0:22:18 to make 100 pounds of product, but my competitor has to buy 200 pounds of raw material to make
0:22:24 100 pounds of product, their cost structure is two X mine exactly.
0:22:25 Okay.
0:22:30 So I think you were giving me reasons you can be profitable at smaller scale.
0:22:32 Are there more or are we done with that?
0:22:36 Well, I would say there’s also like a nuance and a caveat in terms of like how the chemicals
0:22:40 industry works that I just find this to be particularly fascinating.
0:22:46 So you can have structurally differentiated margins from the standpoint of like, you know,
0:22:49 sawage is better yields, that’s great.
0:22:53 But then what you don’t want to do is compete against someone else’s depreciated catbacks.
0:22:54 Right.
0:22:59 Meaning they built the factory 30 years ago, they don’t have to pay for it anymore.
0:23:04 So they can just essentially treat it as free and then they will always be able to underprice
0:23:05 you.
0:23:06 Exactly.
0:23:09 They’ve got a really diversified set of chemicals that they’re making.
0:23:11 And so like if you try to go head to head against them.
0:23:16 A conglomerate like Dow or DuPont, like a giant chemical company that I have heard of even
0:23:18 though I don’t know about this business.
0:23:19 Exactly.
0:23:20 Right.
0:23:25 So like if you start going in there and putting new chemicals on the market, right, and lowering
0:23:29 that price as a result, they can actually run at a loss for years.
0:23:30 Forever.
0:23:31 Forever.
0:23:36 The amount of revenue that you have is so trivial to them that they could just underprice
0:23:37 you forever.
0:23:38 Exactly.
0:23:41 And so like it’s one of the things I find the most fun about the chemical industry is
0:23:43 like the market entry strategy on like, well, what?
0:23:47 Because like it’s always like we can, we have all sorts of patents on all these different
0:23:48 chemicals.
0:23:49 It’s like, what do you launch first?
0:23:50 What do you launch second?
0:23:52 Like why are you launching these chemicals next?
0:23:56 Well, like it reminds me of the hydrogen peroxide for the float spa, right?
0:24:01 It’s like this weird little market that really cares and that you can sell at a premium too.
0:24:05 I mean, have you essentially been able to keep doing that in kind of broader concentric
0:24:07 circles, bigger markets?
0:24:08 That’s precisely it.
0:24:13 And so like our most immediate goal is like have a network of bioforges that are selling
0:24:16 specialty chemicals that are paying for themselves.
0:24:17 They’re depreciating.
0:24:18 They’re profitable.
0:24:22 And then we come back around and we start bolting on the capabilities to make more of
0:24:25 the commodity chemicals in the future.
0:24:31 So like right now, like why, I get why the float spa people were willing to pay you more
0:24:33 for hydrogen peroxide.
0:24:35 Why are people willing?
0:24:39 Like what is it that you’re selling now that is like, you know, you’re particularly able
0:24:41 to sell at a profit at the scale you’re at now?
0:24:42 Yes.
0:24:47 So let’s talk about on the water treatment side.
0:24:52 So on the water treatment side, let’s say you’re a municipality and you’re trying to
0:24:54 clean up your water.
0:24:59 If ultimately what you’re measuring is like, here’s my cost and I’m spending on chemicals
0:25:01 to get my water clean.
0:25:04 And if we come in with a package that is cheaper than how much you’re spending to get that
0:25:10 same cleanliness, that’s that’s a value that’s price per performance.
0:25:11 Sure.
0:25:13 And then the second is security of supply.
0:25:17 So so a lot of these different chemicals are all made in China and they spend eight weeks
0:25:18 on the water.
0:25:23 And then I would say sustainability tends to be the third, but we’re never essentially
0:25:26 selling chemicals at a premium.
0:25:30 We’re trying to match or be better than price and performance.
0:25:36 And can you you can do as good or better on price because you’re disintermediating essentially
0:25:41 because for other sellers, it’s sort of going through multiple middlemen who are all taking
0:25:44 a cut and you can make the final product.
0:25:46 You can go from input to final product.
0:25:47 Exactly.
0:25:51 So if we think about like a municipality can’t take that supply chain risk, they can’t wait
0:25:53 eight weeks on the water for chemicals to come.
0:25:55 So it has to go through distribution.
0:26:00 And so a lot of the chemicals that we compete against today that are imported from China,
0:26:04 they like we estimate they change hands on average about five times before they reach
0:26:06 that end use customer.
0:26:11 And as Bezos said, their margin is your opportunity.
0:26:14 So let’s talk about this sort of medium term, right?
0:26:19 So you’re now well, what’s what more or less your revenue now?
0:26:23 So so we’re we’re on the order of a hundred million a year.
0:26:24 Okay.
0:26:28 So like definitely a real business.
0:26:33 But the scale of the petrochemical industry is giant.
0:26:39 What hundreds of billions a year, maybe trillions a year globally or globally it’s in the trillions.
0:26:48 So I mean, is your dream that you will be the like Dow chemical of a new century?
0:26:50 Like is that the is that the big dream?
0:26:51 Yeah.
0:26:56 I mean, I would say the big dream is decarbonization of chemicals, right?
0:27:00 And sort of I don’t think these that chemical plan should be this sort of like pariah where
0:27:03 you don’t want them around you or in your community.
0:27:07 Like manufacturing is essential to supporting all of us.
0:27:11 And so like what I see is sort of like this network of sustainable manufacturing plants
0:27:15 that, you know, people view as safe and they view them as a good part of the community.
0:27:17 They create clean green jobs.
0:27:22 They’re making chemicals that support our families and, you know, they’re not harming
0:27:23 the planet.
0:27:27 And I think the technology exists to do that today and every year it’s getting better and
0:27:28 better.
0:27:34 And so, you know, what I view as the role of solidion is like, how do we get those technologies
0:27:39 to scale as fast as possible and get those products, you know, seeding the chemicals
0:27:41 transition as quickly as possible?
0:27:43 Is anybody else doing what you’re doing?
0:27:45 Like it seems to make a lot of sense.
0:27:47 I’m sold that it makes sense.
0:27:49 Are there people trying to do what you’re trying to do?
0:27:50 Yeah.
0:27:54 I mean, so, so like I think sustainable chemistry, green chemistry in general, there’s there’s
0:27:56 all sorts of people that are in this space.
0:28:00 Like I know you talked to C16, right, as an example.
0:28:03 And so that’s a fermentation approach to make oils.
0:28:04 And so…
0:28:05 Yes.
0:28:06 I mean, that’s a very niche.
0:28:10 It seems like a different niche, but yeah, it’s an interesting comparison.
0:28:11 Yeah.
0:28:12 Well, it’s just there’s a lot of people in the space.
0:28:17 I would say solidion from a technology standpoint, I think at this point, we’re broadly what
0:28:21 I would consider like an N of one company.
0:28:24 We’ve captured a lot of the IP patent white space.
0:28:26 We’ve gotten to scale very quickly.
0:28:31 And you know, our roadmap in front of us right now, I’m coining idea to tanker truck.
0:28:35 Like I want to, I want to take an idea from a lab and I want to get it to a tanker truck
0:28:37 scale in like 18 months.
0:28:39 And how long does it take you now?
0:28:45 So our first idea to tanker truck, I guess, was 2016 to 2021.
0:28:47 That’s hydrogen peroxide.
0:28:49 That was like Home Depot to tanker truck.
0:28:50 Exactly.
0:28:51 Right.
0:28:56 And then I now with all the capabilities we build in Houston, I think we can do it in
0:28:59 18 months.
0:29:04 If you look at sort of historical chemicals industry, I did a tanker truck is like a 10
0:29:05 year process.
0:29:10 So now we’ve got this whole white space that uses enzymes and metal catalysts to convert
0:29:11 corn to chemicals.
0:29:17 So is the idea not only can you make, you know, make from corn what people have been making
0:29:21 from fossil fuels, but also maybe there’s a whole new universe of things that you can
0:29:22 make.
0:29:24 There’s a whole new universal molecules that we can make.
0:29:30 So like, like one outthrow out there is like, so when we make Lucaric acid, we go through
0:29:34 this metastable intermediate and it’s a weird molecule.
0:29:37 It’s called Glucodialdos, very strange molecule.
0:29:41 You can’t even buy this on the internet and like gram quantities.
0:29:43 So weird you cannot buy it on the internet.
0:29:45 You cannot buy it on the internet, right?
0:29:47 And that’s, I mean, if you can’t buy it on the internet, it must be.
0:29:48 Does it even exist?
0:29:49 Does it even exist?
0:29:50 Right?
0:29:51 Yeah.
0:29:56 And we can’t really make thousands of tons per year of this and it’s like, we’re processing
0:29:59 it forward to Glucaric acid because we have all these customers for Glucaric acid, but
0:30:04 like each molecule that we make goes through this really unique intermediate.
0:30:07 There’s a whole world of opportunity there in terms of all these different sort of untapped.
0:30:09 What do you think it might be good for?
0:30:11 Like take a guess.
0:30:12 Okay.
0:30:14 So here’s a fascinating one.
0:30:17 It is, so figure glucose is sugar, right?
0:30:18 That’s what you’re making.
0:30:20 I mean, we all live off of glucose, right?
0:30:24 Glucodialdos is glucose with two aldehydes and it’s actually a biocidal.
0:30:27 So it actually kills bacteria.
0:30:32 And so like one of the molecules that is sort of a big market in some of the space service
0:30:36 called Glutaraldehyde, it’s got two aldehydes and it’s made from oil.
0:30:37 Okay.
0:30:40 Could you use Glucodialdos to replace Glutaraldehyde?
0:30:44 And now you have like a sugar that is somehow toxic and can kill bugs and like clean and
0:30:46 disinfect like that’s crazy.
0:30:51 And so, you know, this is like, if this to me is like a really key one on the chemical
0:30:52 transition, right?
0:30:56 So it’s just like the energy transition, the chemical transition is like how do, how do
0:30:58 we get sustainable chemicals into all the products around us?
0:31:03 All the things that we use every day, right?
0:31:05 Right now they’re all made from oil, coal, natural gas.
0:31:11 How do we steadily introduce bio manufactured and recycled circular materials, versions
0:31:14 of those into them over time?
0:31:17 So that we don’t have to make them from fossil fuels anymore.
0:31:18 Exactly.
0:31:23 And, you know, if I give you a concrete example is actually the Biden bioeconomy executive
0:31:24 order.
0:31:26 This was from about two years ago.
0:31:32 This one, it calls for 30% of all US chemicals to be bio manufactured in the next 20 years.
0:31:34 So like that essentially sets a target for the chemicals transition.
0:31:40 It says, hey, in 20 years, 30% of the products should have like 30% of them bio manufactured
0:31:41 over that time frame.
0:31:42 And that’s you.
0:31:43 We’re trying.
0:31:58 We’ll be back in a minute with the Lighting Round.
0:32:04 I’ve personally seen Sam resolve a hundred million dollar issue in a 30 minute phone
0:32:06 call, 15 minute phone call.
0:32:11 In this season of Foundering, we’ll take you inside OpenAI.
0:32:17 It’s a story of feuds, betrayals, billionaires, and maybe the extinction of humanity.
0:32:23 And it’s also the story of Sam Altman, maybe our future AI overlord.
0:32:28 Listen to Foundering, the open AI story wherever you get your podcasts.
0:32:32 Let’s do the lightning round.
0:32:40 I understand earlier in your career, you were a cocoa puff engineer at General Mills,
0:32:41 true?
0:32:42 Yes, yes.
0:32:46 What was the hardest cocoa puff problem you worked on?
0:32:54 So cocoa puff, what I love about it is it’s a late stage capitalism.
0:32:56 And so they’ve been around since 1950s.
0:33:02 And so what we were focused on was, how do you make the cocoa puff glossy and frosty
0:33:05 for different markets?
0:33:09 So different geographies have a different visual appeal for like, should it be frostier?
0:33:10 Should it be glossier?
0:33:13 Meaning, in different places, people have different preferences?
0:33:14 They have different preferences.
0:33:21 And so the US is shiny and not particularly frosty.
0:33:26 But then Southeast Asia is actually more frosty and matte.
0:33:31 And you have to sort of change the chemistry to deliver it to everybody’s likes?
0:33:35 Because you’re crystallizing sugar on top of a kick cereal.
0:33:36 That’s what cocoa puffs is.
0:33:41 And so you have to tune the crystallization process to make it shinier, frostier, matte.
0:33:46 And so I actually coated cocoa puffs in gold and put them in scanning electron microscopes.
0:33:48 Coated them with literal gold?
0:33:49 With literal gold.
0:33:51 And I have a whole box of gold cocoa puffs.
0:33:52 Why not?
0:33:53 Why not is the question.
0:33:54 You win.
0:33:58 You still have gold cocoa puffs?
0:33:59 Absolutely.
0:34:00 That’s amazing.
0:34:01 Yeah, they’re pretty cool.
0:34:04 It’s hard to imagine you will ever do anything that meaningful again, but good luck, it’s
0:34:05 all you, Jim.
0:34:08 It’s the most delicious time in my career.
0:34:09 Did you eat a gold cocoa puff?
0:34:11 Yeah, they’re totally harmless.
0:34:12 Yeah, right.
0:34:13 You can eat gold.
0:34:14 You can eat gold, yeah.
0:34:15 Why not, I suppose?
0:34:23 As an engineer, what cereal do you admire the most other than cocoa puffs?
0:34:26 So as a food product, I admire gushers the most.
0:34:30 So they’re like kind of a gooey candy and you bite into it and some liquid shoots out?
0:34:31 Some liquid shoots out.
0:34:35 It’s an exceptionally innovative, complex manufacturing process that was like specially
0:34:36 built to make gushers.
0:34:42 We’re getting all the rain, yeah, yeah.
0:34:44 Oh, does that sound rain on the roof of the trailer?
0:34:47 Yeah, yeah, it’s really coming down now.
0:34:48 Okay.
0:34:52 Home Depot or Lowe’s?
0:34:58 So Home Depot for Wood, Lowe’s for plumbing parts.
0:35:00 That is a robust answer.
0:35:02 That’s a varsity answer.
0:35:04 Just better prices, better selection?
0:35:08 I think it’s about selection for both of them because if you’re going to Home Depot or Lowe’s,
0:35:09 you’re in a jam.
0:35:12 That means I messed up on my parts ordering list and something didn’t come in.
0:35:13 I see.
0:35:14 And so I’m quickly running out there.
0:35:19 So you actually go to Home Depot or Lowe’s to build your $100 million in your factory?
0:35:20 Oh, yeah.
0:35:21 So you’re going for real.
0:35:24 I am just screwing around at Home Depot.
0:35:26 You have high stakes when you go to Home Depot or Lowe’s.
0:35:29 Well, so typically, if I need a part from Home Depot or Lowe’s, it’s because I really
0:35:34 messed up the design of some aspect and it’s like we’re really going to do a patchwork
0:35:36 job to just try to get it going.
0:35:37 Yes.
0:35:38 What’s the most underrated chemical?
0:35:44 I mean, I don’t think the public appreciates any of the chemicals that they use every day
0:35:48 or really like how important they are and all the work and effort that goes into making
0:35:49 them.
0:35:52 Like what’s astounding to me is if I look at a bottle of water on a store shelves, it
0:35:58 blows my mind because the effort in making that plastic and the science is so complex
0:36:03 and the costs are so astronomical and yet you’re buying it for the water.
0:36:07 You’re just saying the bottle alone is an engineering miracle.
0:36:11 The bottle alone is an engineering miracle because it’s an incredible material and it’s
0:36:14 so crystal clear and everything.
0:36:20 That plastic has a higher specification than pharmaceuticals in terms of purity and yet
0:36:23 we’re just being like it’s for water and the bottle’s free.
0:36:24 It’s garbage.
0:36:25 It’s basically garbage.
0:36:28 It’s mind blowing to be still.
0:36:29 Do you have a white whale?
0:36:34 Is there one chemical you really want to be able to sell that you haven’t figured out
0:36:36 yet?
0:36:39 So I think it’s two.
0:36:45 So nylon and like my dream there is actually cardboard as the feedstock.
0:36:50 So cardboard, recycled cardboard is actually like just sugar polymers.
0:36:53 It’s the same thing as starch from corn.
0:36:55 So it’s actually a really great feedstock for us.
0:36:57 Just like a cardboard box that I break down.
0:37:02 Yeah because cardboard, it gets recycled like 12 times from cradle to cradle but the fibers
0:37:05 get smaller and smaller and it eventually gets landfill to burn.
0:37:10 Those really small fibers would be incredible feedstocks for our plant and then we have
0:37:14 a process technology for making nylon and so to me it’s like it would just be like to
0:37:19 me that’s like a total end state of like just victory if we’re doing cardboard to nylon.
0:37:21 I feel like you should call Patagonia.
0:37:23 I feel like they’ll pay a premium for that.
0:37:24 I know.
0:37:27 The challenge that with all these clothing retailers is like that’s where the sustainability
0:37:32 impact is but they buy just like a fractional percent of the volume in the market.
0:37:36 So you need to figure out how to do it for real and not rely on the green premium and
0:37:41 actually use garbage cardboard to make good nylon that you can sell at a commodity price.
0:37:46 And then figure like most nylon manufacturers in China it’s depreciated assets now.
0:37:49 You’re going to build this whole brand new shiny thing to go do it so you have all of
0:37:51 those types of issues and everything.
0:37:52 Hence the white whale.
0:37:53 Hence the white whale.
0:37:57 But I think we can eventually get there like to me that’s like I’ve got 40 years of work
0:37:58 ahead of me.
0:37:59 Right.
0:38:01 I think we can do that one coming up here.
0:38:04 I like the long view.
0:38:10 So your co-founder says and this is a quote if I if I’ve got it right you’re terrible
0:38:11 at poker.
0:38:12 Yeah.
0:38:13 Is that true?
0:38:14 Yeah.
0:38:15 Yeah.
0:38:20 I’m really there to crack jokes to have a good time to drink some beer and to lose
0:38:22 a predetermined amount of money.
0:38:23 Oh you’re great for everybody else.
0:38:26 So everybody loves to see you walk up to the table.
0:38:27 Yeah.
0:38:28 Yeah.
0:38:29 No.
0:38:30 I’m always invited.
0:38:31 I have a fun one for you.
0:38:34 Do you know I’m a semi-professional juggler?
0:38:39 Like what’s the frontier of your, wait what does semi-professional mean in the context
0:38:40 of juggling?
0:38:41 You get paid sometimes?
0:38:49 I have been paid on occasion to juggle at one point I competed in a national combat
0:38:50 juggling tournament.
0:38:51 Combat.
0:38:52 Combat juggling.
0:38:53 It’s one about.
0:38:56 Like you’re, it’s boxing crossed with juggling, you’re juggling weapons.
0:39:00 20 people standing in a circle, they fight until the last person’s juggling.
0:39:01 Seriously?
0:39:02 It’s amazing.
0:39:05 You can watch it on YouTube and please petition for it to be in the Olympics.
0:39:09 It’s like a juggling battle royale and you’re just trying to make the other dude mess up
0:39:10 without messing up yourself.
0:39:14 I have a whole strategy so like I run to the edge of the arena and I let all this collateral
0:39:15 damage happen.
0:39:16 Okay.
0:39:18 Then there’s a whole bunch of spare balls that are on the field.
0:39:20 You only have to be juggling three balls.
0:39:22 So I pick them up and I go in like four and five ball juggling.
0:39:26 And then I stand at the edge of the arena and I snipe people with my extra balls.
0:39:27 Wow.
0:39:28 Yeah, works for you.
0:39:32 Use that a metaphor for running your company.
0:39:33 Maybe.
0:39:34 Maybe.
0:39:35 I kind of, I kind of fluctuates.
0:39:38 I always feel like every day I’m getting punched in the face with by capitalism.
0:39:39 But there’s just.
0:39:40 Interesting.
0:39:42 But there’s just all these incredible tailwinds and.
0:39:46 When you say you feel like you’re getting punched in the face every day by capitalism,
0:39:47 what do you mean?
0:39:52 Well, I think, I think the world exists to try to kill startups kind of from, from every,
0:39:53 every direction, right?
0:39:56 Cause you’re trying to do something different and, and I would say, especially selling like
0:40:01 in B2B, there’s a natural inclination to just do what you’ve always been doing, right?
0:40:04 And try, try to overcome that is difficult.
0:40:07 A natural inclination on the part of the buyers.
0:40:11 Like it’s some, somebody at like some municipal water plant, like they don’t want to hear
0:40:12 from you.
0:40:15 They’re not going to get in trouble buying the same chemical that they’ve been buying
0:40:17 at that plant for 30 years.
0:40:18 Exactly.
0:40:21 And so like, and I feel like everyone we talked to, they’re all, they can all say the same
0:40:24 thing on like their concern about the climate, their concern about these different things.
0:40:29 But then I think people underestimate their own ability to effectuate that change.
0:40:31 Even just someone, they’re being like, Hey, I’m going to switch to a different vendor.
0:40:33 I’m going to try this out.
0:40:36 Like that, that, that there is like, if, if you did that for all these different startups
0:40:40 that are working in sustainable chemicals, the part I get pessimistic about is rate of
0:40:41 adoption.
0:40:45 It’s really just, just that, like the technology piece, like I, we’re going to get there humans
0:40:46 are super ingenious.
0:40:48 I think a lot of the technologies are actually already here.
0:40:49 They’re a bit nascent.
0:40:52 They need to be deployed, but it’s that, it’s that rate.
0:40:55 That’s, that’s the part to me that I think is the most important.
0:40:56 The urgency.
0:40:57 The urgency.
0:40:58 Exactly.
0:41:08 Sean Hunt is the co-founder and CTO of Solugin.
0:41:10 Today’s show was produced by Gabriel Hunter Chang.
0:41:15 It was edited by Lydia Jean Cot and engineered by Sarah Brugier.
0:41:19 You can email us at problem@pushkin.fm.
0:41:32 I’m Jacob Goldstein and we’ll be back next week with another episode of What’s Your Problem?
0:41:37 Hey, it’s Jacob.
0:41:43 There’s no shortage of tech podcasts, but few actually give you a true dose of the future.
0:41:46 The A16Z podcast is the exception.
0:41:50 The chart-topping show from Andreessen Horowitz brings you to the world’s most influential
0:41:56 people, people who have a track record of being both early and right, like Apple co-founder
0:42:02 Steve Wozniak or A16Z co-founders Mark Andreessen and Ben Horowitz.
0:42:05 Not to mention folks you don’t typically get to hear from.
0:42:10 From the very first CTO of the CIA to the chief security officers behind open AI and
0:42:12 thropic and deep mind.
0:42:17 These guests tackle the most important trends in technology, from space to supply chains
0:42:19 and beyond.
0:42:22 Want to understand the science and supply of GLP-1s?
0:42:24 They recently broke this down.
0:42:25 Did you tune into the Olympics?
0:42:28 They just covered the technology behind the Olympics.
0:42:32 Wondering if autonomous vehicles are still miles away?
0:42:33 Listen to find out.
0:42:35 So, go ahead.
0:42:38 Ease drop on the future with the A16Z podcast.
Sean Hunt is the co-founder and CTO of Solugen, a company that sells around $100 million a year of industrial chemicals. Sean’s problem is this: How do you make the chemicals that go into everything around us — our food, our clothes, our cars — without using fossil fuels?
See omnystudio.com/listener for privacy information.