AI transcript
0:00:00 [MUSIC]
0:00:06 Pushkin.
0:00:06 [MUSIC]
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0:00:37 [MUSIC]
0:00:41 Palm oil is vegetable oil made from palm trees.
0:00:45 And it’s hiding in a ton of the stuff we use every single day.
0:00:49 Palm oil is in chips, it’s in crackers, cookies, peanut butter.
0:00:55 It’s also in soap, it’s in shampoo, it’s in detergent.
0:00:58 Palm oil is in lotion, it’s in lipstick.
0:01:02 And you can’t even tell, by looking at the list of ingredients,
0:01:06 whether a thing you’re holding in your hand has palm oil in it.
0:01:10 Because it might be listed as vegetable oil, or as steric acid, or
0:01:14 as sodium, laurel, sulfate, or as lots of other things.
0:01:19 Palm oil is in so many things because it is very, very useful.
0:01:23 But also, growing all the palm trees to make all this palm oil,
0:01:29 turns out to be really, really bad for the planet.
0:01:33 So it would be great if somebody could come up with a cheap,
0:01:36 scalable way to get palm oil without palm trees.
0:01:40 [MUSIC]
0:01:46 I’m Jacob Goldstein, and this is What’s Your Problem.
0:01:48 My guest today is Shera Tiku.
0:01:50 She’s the co-founder of C16 Biosciences.
0:01:54 Shera’s problem is this.
0:01:56 Can you get yeast to make a molecule that does basically all the good
0:02:00 stuff that palm oil does?
0:02:02 So that you can get what is basically palm oil, without palm trees.
0:02:07 [MUSIC]
0:02:11 Why is palm oil so great?
0:02:13 >> It’s really good at what it does, and it does a lot of things.
0:02:17 So palm oil is an oil as a vegetable oil.
0:02:21 And oils and fats show up in a lot of products.
0:02:25 They show up in food, they show up in cleaning products.
0:02:28 They show up even in biodiesel and sustainable aviation fuel and lubricants.
0:02:34 And palm oil is the most popular among them because it can do the most things.
0:02:40 So it really drives performance in things like soap.
0:02:45 It is the molecule responsible for foaming and cleansing,
0:02:49 which is exactly what you want to soap to do.
0:02:51 And in things like peanut butter, the profile of palm oil is the reason that
0:02:57 your peanut butter stays together with a really smooth, spoonable emulsion.
0:03:03 And if you take it out, you have that layer of oil separation.
0:03:06 So it’s about function and
0:03:09 performance across a very wide range of consumer goods.
0:03:13 And no other vegetable oil has the same profile that can drive those performance
0:03:20 properties.
0:03:21 And so even if a company wanted to replace palm oil in their products,
0:03:28 they really haven’t been able to because they end up having to sacrifice performance.
0:03:32 And nobody wants to sacrifice performance.
0:03:35 >> Why is palm oil bad?
0:03:37 >> The only problem with palm oil is the way that it’s produced.
0:03:42 And the way that it’s produced primarily today is by converting land.
0:03:48 The tree, it really thrives in about a five to ten degree range around the equator.
0:03:54 That land right around the equator is typically primary forest, tropical rain forest.
0:04:00 Which is some of the most biodiverse, precious land on earth.
0:04:05 They’re carbon sinks, thousands of animal species call these home.
0:04:09 And palm growers over the past few decades have really been moving to clear that land.
0:04:16 They slash and burn it, which emits tons of carbon dioxide into the air.
0:04:22 They clear the land and they convert it to these single crop palm oil plantations.
0:04:28 And so the main impacts are carbon dioxide emissions.
0:04:32 The palm oil industry is responsible for about 2% of global greenhouse gas emissions.
0:04:37 Which is more than the entire global aviation sector.
0:04:41 Just this one crop.
0:04:43 It has an impact on land use, which is converting this sort of precious,
0:04:48 biodiverse rain forest into monoculture where other things can’t grow.
0:04:53 The impact on wildlife, and then I would say last but not least,
0:04:56 are sort of the impact on the humans that live there.
0:04:59 Which is, it pollutes the air, which is, and the water streams.
0:05:03 But it also puts lots of people out of their home and forced into low wage,
0:05:08 very hard labor conditions.
0:05:10 >> So okay, so that’s the broader context.
0:05:14 You personally, as I understand it, got into the palm oil or
0:05:17 alternative palm oil business more or less when you were in business school, right?
0:05:22 You met your co-founders in this class,
0:05:24 the title of which I love, a class called Revolutionary Ventures, great class name.
0:05:29 What exactly happened there?
0:05:31 >> We just start asking, okay, palm oil’s in 50% of products on supermarket shelves.
0:05:36 It’s really, it’s one of the worst emitters from a greenhouse gas perspective.
0:05:42 And every major consumer packaged goods company knows it and
0:05:46 has admitted it and has a palm oil policy to switch from what they call
0:05:51 conflict palm oil, but they’ve all failed.
0:05:54 >> Sort of like the net zero of consumer packaged goods problem.
0:05:59 >> Definitely, definitely.
0:06:01 >> Yeah.
0:06:01 >> And why has it failed?
0:06:03 Why has agriculture failed to solve this problem?
0:06:07 And could microbiology create a new way to solve this problem?
0:06:12 And what would have to be true?
0:06:14 And we just got started with that really simple question and
0:06:18 $1,000 from MIT.
0:06:20 And we started thinking from first principles about what would have to be true.
0:06:25 And then we started playing around in the lab, and that’s how we got started.
0:06:29 I mean, you have this very abstract idea.
0:06:33 Let’s find something that can do what palm oil does without palm trees.
0:06:37 >> Yep.
0:06:38 >> How do you get from there to a product?
0:06:42 >> Yeah, so the basic idea was today we make oils and
0:06:45 fats from petroleum or animals or plants.
0:06:50 What if we looked at the fungal kingdom, microorganisms instead?
0:06:56 And so the very first step was defining what would have to be true at scale for
0:07:01 this to succeed.
0:07:03 So we knew we needed to make, I mentioned earlier, palm oil is so
0:07:07 good at what it does because it has this really unique profile of fats.
0:07:12 And that drives performance.
0:07:14 >> So it can do lots of different things.
0:07:16 >> Yeah. >> It’s like remarkably useful in many ways.
0:07:19 >> Exactly.
0:07:19 So we knew if we were going to solve this problem, we had to nail that profile.
0:07:24 Because you had to be able to do all of those things remarkably well.
0:07:29 >> It’s not obvious to me that that’s the case.
0:07:31 I mean, I feel like you could just bite off some of it, right?
0:07:34 If you could do the foaming part so
0:07:36 that you could get palm oil out of shampoo, that would be a big deal, right?
0:07:40 >> I think that’s true, but at this point, we had a big idea.
0:07:46 And this really was a big problem we were trying to solve.
0:07:52 And so that was how we thought about it.
0:07:54 And so the first step is, can you find a microorganism which can make oil,
0:07:59 which can make this profile, this profile that looks and functions like palm?
0:08:05 >> And just to be clear, why is a microorganism better than a plant?
0:08:10 >> One of the, I think, big promises of this field and
0:08:14 when we started thinking about it is plants have big footprints.
0:08:19 And right now, they require specific conditions of growth on arable land.
0:08:25 And microorganisms don’t need arable land.
0:08:28 They don’t need to convert rainforest and clear them and
0:08:32 convert them into plantations and kill all the life that lives there.
0:08:36 Microorganisms can be produced in factories anywhere in the world.
0:08:43 >> They just need a big metal tank.
0:08:45 >> A metal tank?
0:08:46 >> Heat and some sugar to eat.
0:08:47 >> Electricity, some basic things.
0:08:50 That was the primary sort of concept.
0:08:53 The hard question was, can microorganisms actually make the products?
0:08:59 And can they make them scalably?
0:09:01 And can they make them cost effectively?
0:09:03 So can you make the right product at scale and cost competitively?
0:09:07 That was the sort of unknown part.
0:09:09 And that was what we had to figure out first.
0:09:12 And we basically started by screening thousands of microorganisms against
0:09:17 that criteria to say, could we find an organism that makes the right oil profile?
0:09:25 It is, in theory, robust enough to scale to super large volumes.
0:09:30 Because there’s tens of millions of metric tons of palm oil produced a year.
0:09:34 And again, we’re thinking revolutionary.
0:09:36 We’ve got to go really, really big and can compete on cost.
0:09:41 And so it’s got to be a really efficient production system.
0:09:43 And so that was the first set of questions that we asked.
0:09:48 >> And when you’re trying to find the right microorganism, are you, you’re looking at
0:09:56 the literature.
0:09:57 Is there some point where you start like growing yeast in a tank?
0:10:01 I mean, what is it?
0:10:02 How do you find?
0:10:03 How do you look?
0:10:04 >> Yes, and yes.
0:10:05 So you start with the literature and you start with history.
0:10:10 And so you look back and see what have people made successfully in the past and why.
0:10:17 And you know, a lot of work had actually been done for things like biofuels in the past,
0:10:22 which is similar to the profile that we were making.
0:10:25 There were reasons we thought biofuels didn’t work as well.
0:10:31 But there were technical proofs of concept there.
0:10:33 So we got to learn a lot from history.
0:10:37 And then we looked at the literature for sure.
0:10:39 And one of the things we learned is that, again, getting this specific profile of palm
0:10:45 is really different than how most industrial microbiology works today.
0:10:50 Most companies are making fairly simple molecules.
0:10:53 They’re making alcohol, they’re making a single molecule protein, artificial, you know, vanilla
0:10:59 is almost 100% made from fermentation today, single molecule.
0:11:05 This was a complex molecule.
0:11:07 And so we quickly learned we needed a different type of microorganism, not one that was necessarily
0:11:14 the best factory with the best set of tools, but instead a strain, which was just really
0:11:21 good at getting fat.
0:11:24 And so these are referred to as oleogenus.
0:11:29 Oleogenus means oily.
0:11:30 And so there’s a whole set of oleogenus organisms that naturally produce fat.
0:11:35 And so that was the first unlock.
0:11:37 They had not really been used in industrial scale production historically.
0:11:43 So we were going to have to build a lot of the tools and the know-how to be able to grow
0:11:48 it, but it was really promising.
0:11:50 And so then the next step was you start to grow it.
0:11:52 You get a strain, you do really small scale experiments in the lab, and you just try to
0:11:59 get something which vaguely looks and functions like palm oil.
0:12:02 And that was sort of the first big breakthrough for us.
0:12:08 Did you consider – surely you considered synthetic biology, right?
0:12:13 Like right there in Boston, there’s a giant – at least one giant company that their
0:12:19 whole business is taking yeast and genetically engineering the yeast to produce things other
0:12:26 than the yeast usually produces.
0:12:29 Did you consider that?
0:12:30 So that was I think maybe our first hypothesis.
0:12:34 What we learned was it actually doesn’t have to be that hard.
0:12:39 Like nature actually does a lot of really cool stuff.
0:12:46 And if we can just work with what she, nature, has already done, that’s really promising
0:12:53 for actually getting this thing to scale and be cheap.
0:12:57 And I think when we look at synthetic biology, that was the field that we were sort of enamored
0:13:01 with at the time, and that we thought was very promising.
0:13:05 But it’s a hard field to scale commercially.
0:13:08 Notoriously, right?
0:13:10 It’s been on the cusp of being huge for 20 years, right?
0:13:13 And so looking around the cusp of synthetic biology, but saying how do we just really
0:13:19 focus on solving the problem?
0:13:21 It doesn’t have to be the shiniest toolkit.
0:13:24 It needs to solve the problem.
0:13:27 Maybe if we take it a little bit simpler.
0:13:28 And so instead of taking one of these sort of industrial microorganisms with a standard
0:13:34 toolkit and applying all the tools of engineering and trying to really force a yeast to do something
0:13:42 that it doesn’t do naturally, what if we found a yeast that actually has evolved for centuries
0:13:48 to do exactly what we want it to do?
0:13:51 And we can force it through faster cycles of evolution, and we can use rapid experimentation
0:13:58 and data to understand better than ever how it grows and optimize its performance of growth.
0:14:05 That sounds a lot more promising to actually building a commercially viable solution to
0:14:10 this problem.
0:14:11 And that’s where we landed.
0:14:14 So it seems like the fact that there are oleaginous microorganisms that, you know, oily microorganisms
0:14:20 basically, it suggests that the production of oil is like profoundly conserved, right?
0:14:26 Like we get oil from plants and animals, but this fact that there’s oily yeast too is encouraging
0:14:33 in your quest.
0:14:34 It’s like, oh, there’s everything that lives makes oil, and some things that live make
0:14:38 a ton of oil.
0:14:39 Let’s look at the things that live that already make a ton of oil.
0:14:42 Yeah.
0:14:43 And it also, I think, just says something about the value of oils and fats, right?
0:14:47 There’s clearly a need for these molecules across lots of applications.
0:14:52 There’s a reason they’re in everything at the store.
0:14:56 So is there some moment where you’re like, “We found it.
0:15:00 We’ve got the magic yeast?”
0:15:03 You’re still waiting for that moment?
0:15:07 I don’t know.
0:15:08 It’s a good question.
0:15:09 I mean, I think, and look like, science is never a straight line.
0:15:13 And so in the early days, we had, our first approach to this was slightly less simple,
0:15:22 right?
0:15:23 It was a little more innovative and clever, but much harder to scale.
0:15:30 And so I think we thought we had that moment, and then we had another moment.
0:15:35 Wait, wait, tell me about the one that didn’t work.
0:15:39 What was the one that ended up being too clever?
0:15:41 Yeah.
0:15:42 Actually, so most of industrial biology today is a single microorganism engineering, the
0:15:50 hell out of it, and then scaling it.
0:15:54 And we sort of said, okay, but actually in nature, again, I think we’ve always been very
0:15:59 inspired by what happens in nature.
0:16:02 In nature, you see microorganisms coexist in our microbiome, for example, or in lichens
0:16:09 on rocks.
0:16:11 And so what if we took a microorganism like a yeast that was really good at making oil,
0:16:18 and then we took one, but the yeast needs sugar.
0:16:22 And so then what if we combined it with an algae that was photosynthetic?
0:16:28 And so then you don’t need sugar.
0:16:30 You just need the sun.
0:16:32 That is indeed clever.
0:16:33 So you’re lowering your input cost.
0:16:35 Exactly.
0:16:36 And you could grow them in the same pot, which really nobody had done before.
0:16:40 And so this is actually our first patent filing, this co-culture of yeast and algae, and it’s
0:16:46 actually our first logo for the company, which is hideous, but made in Microsoft PowerPoint.
0:16:54 And turned out to be based on an assumption that didn’t work, it sounds like.
0:16:58 I think it just would have been very hard to scale it.
0:17:02 So you have this very elegant idea, which I love because it’s so satisfying and efficient.
0:17:07 What happens?
0:17:09 So that’s working.
0:17:11 And what happens is actually I was at a trade show.
0:17:15 I was at a food tech trade show just walking the floor.
0:17:19 This is really early days.
0:17:20 It’s just me and my co-founders, we’ve soft committed to this concept, and I’m just walking
0:17:25 the floor at a trade show trying to see who cares about palm oil, and is anybody interested?
0:17:31 And I run into someone who’s got a bunch of clever ideas on basically waste stream feed
0:17:37 stocks.
0:17:38 So cheaper than sugar, available in millions of gallons per year.
0:17:45 Really scalable, cheap, upcycled.
0:17:49 And just to contextualize that, I mean, growing yeast is very simple, and people say all you
0:17:55 need to do is feed them sugar, but you’re pointing out here like sugar is not free.
0:18:02 Palm oil is very efficiently produced and very cheap.
0:18:05 And so even the input cost of the sugar is important, is an important cost that you need
0:18:10 to drive down if you’re going to be for real.
0:18:12 It’s all math.
0:18:13 And I think to anchor this around the key problem at this point, the scientific solution
0:18:22 we had was elegant and clever, but we’re also trying to build a business.
0:18:29 And I think oftentimes science-based businesses, it’s easy to forget that.
0:18:36 And I think we were really trying to anchor and say, yes, this is elegant and clever.
0:18:42 However, how do we build this into a sustainable, profitable, scalable business over time?
0:18:47 And we were really early, but I think we were always anchored toward that in the early days.
0:18:52 In sugar and where we got our sugar and what we paid for our sugar was sort of the critical
0:18:59 question we unlocked as an insight that we needed to solve from the early days.
0:19:05 This is the fundamental sort of techno-economic problem.
0:19:09 And so it seems, I don’t want to attach too much to the photosynthesis solution, but just
0:19:17 to be very clear, I love that solution.
0:19:19 It seems like you’re solving the problem.
0:19:23 Why didn’t you go that way?
0:19:26 Two reasons.
0:19:27 One was sort of biology and one was manufacturing.
0:19:31 From a biology perspective, clever, but actually still really hard to get two microorganisms
0:19:40 to grow in sync efficiently together, which again all goes back to the math or the techno-economics
0:19:47 of making this scalable.
0:19:49 The second was a manufacturing problem, which is because it was so novel, we would actually
0:19:55 need to build totally new bioreactors to support this.
0:20:00 And then you’re not only a technology company, you’re now manufacturing all the parts.
0:20:05 It just would have become too much and too expensive.
0:20:09 Okay.
0:20:10 Too clever.
0:20:11 Too far.
0:20:12 Too far, too far out beyond the technological frontier at some level.
0:20:17 And so back in sugar being the core problem that we needed to solve to make this work,
0:20:23 we started trying a bunch of waste, things that would be totally not obvious that an
0:20:30 organism could grow on them, things that didn’t have tons of residual carbon, things that
0:20:37 had inhibitors, things that were known to actually inhibit growth, not enable growth.
0:20:42 And we started growing, and this is again very early days.
0:20:45 You’re looking for all those things because they’re cheap, because you’re looking for
0:20:47 a thing that’s cheaper than just buying granulated sugar or whatever you buy for regular use.
0:20:54 Cheap and abundant.
0:20:55 Cheap and abundant.
0:20:57 And this is early days, so it’s scrappy science.
0:21:00 It’s just me and my co-founders.
0:21:01 We don’t have any sophisticated lab tools, but we get some of the samples and we start
0:21:06 growing our yeast and it turns out the yeast grows on anything.
0:21:12 Oh, that’s great.
0:21:13 This was maybe back to your question, one of our biggest insights and breakthroughs.
0:21:19 And it was a really important one.
0:21:20 So you’re like, what if we just give it garbage?
0:21:22 Totally.
0:21:23 It works.
0:21:24 It’s eating garbage.
0:21:25 And we later literally did that.
0:21:26 Food waste is something people talk about a lot, which is an unsolved problem on many
0:21:32 fronts, but we worked with food waste collection here in New York and we just basically fed
0:21:38 it garbage and it was growing.
0:21:40 There are other reasons I think that’s hard to scale, but yeah, basically we found not
0:21:45 only can our yeast make this hard to replicate profile of palm oil, but nothing else has
0:21:53 produced naturally before aside from palm oil.
0:21:58 It can also grow on anything.
0:22:01 It can eat anything.
0:22:02 And that was a key unlock for, so we’d solved the product side of it and now we were well
0:22:08 on our way to solving the cost side of it and the scalability side of it.
0:22:12 The particular strain of yeast, when do you find that?
0:22:18 Like what is that moment?
0:22:19 Pretty early actually.
0:22:21 Pretty early we had identified, based on our criteria of the right profile and from literature,
0:22:31 a believable ability to scale.
0:22:33 So things like can it grow on a wide range of temperatures without breaking or is it
0:22:40 really fragile?
0:22:41 And if the temperature changes, all of these things model into cost at scale manufacturing.
0:22:47 So we screened for those things pretty early and we pretty early on had identified the
0:22:53 yeast strain that we work with today as the best version.
0:22:57 So tell me about the strain of yeast.
0:23:00 So it is oleaginous, so it naturally produces oil and it’s really good.
0:23:07 So basically it can produce up to 90% of its body weight in lipids, in fats.
0:23:14 When we started working with it, which was seven years ago, the genome had been sequenced.
0:23:23 So there was enough data about it and there were a couple of universities that had started
0:23:29 to do work on it.
0:23:31 So we weren’t the first people to discover it, but it wasn’t something that was really
0:23:36 ubiquitous like a baker’s yeast or a brewer’s yeast.
0:23:40 And so we had enough data to believe that it was compelling and we started working with
0:23:45 it.
0:23:46 What’s it called?
0:23:47 It’s, we don’t really say the name of it.
0:23:51 Isn’t it in a patent?
0:23:52 You didn’t patent the name of it?
0:23:54 It is, but they haven’t been published yet.
0:23:56 Okay.
0:23:57 Well, I’ll keep my eye out.
0:24:00 So you’ve got your yeast, you can feed it garbage.
0:24:07 And this is like, what kind of scale are you doing this at?
0:24:11 Is it like a lab bench?
0:24:14 Is it like a pot?
0:24:17 It’s both.
0:24:19 In the early days, when we were sort of looking to get our first round of funding, we were
0:24:26 going on stage at Y Combinator for something called a demo day.
0:24:31 So Y Combinator is the famous startup incubator.
0:24:33 Correct.
0:24:34 So they’d taken a bet on our revolutionary venture and we were so early.
0:24:40 I mean, we’d basically had some shape flask, so milliliter, but at the end of demo day,
0:24:47 we’re still, we’re a science project at this point with a really big market.
0:24:52 And so we had this, I’d say pressure to want to make it real.
0:24:58 One of the things about science-based businesses, it’s great.
0:25:03 The concept is great, but to get funding, you need to make it real as soon as possible.
0:25:08 As soon as it’s real, people get it.
0:25:11 And so we felt we needed pressure to be able to make something not in tiny little milliliter
0:25:17 quantities, but something that I could hold up on stage in a room full of hundreds or
0:25:22 thousands of people could see as material.
0:25:26 And so we had one lab bench that we were renting, and we were just having problems in the lab.
0:25:34 The standards were not working.
0:25:37 We were not making enough oil, the experiments weren’t working.
0:25:41 And so we went over to a friend’s house who was a home brewer, actually, a beer brewer.
0:25:48 And we used his big pot for making, what he uses to make beer at home, out on his porch.
0:25:56 So normally you think about science as being very precious in a controlled environment,
0:26:01 etc.
0:26:02 We just did the opposite.
0:26:03 We were like, we just got to go for it.
0:26:05 So we went out onto his porch, used his home beer brewing material, and we call it sort
0:26:11 of porch yeast, and we brewed a batch of oil from there.
0:26:18 And then what do you get?
0:26:19 What is the output?
0:26:21 A sludge.
0:26:23 So it looks like muddy water?
0:26:25 What’s it look like?
0:26:26 It does, but it’s pretty.
0:26:27 So our yeast actually produces carotenoids.
0:26:31 Carotenoids are also found in carrots, beta-carotene, is what makes carrots orange, and is why carrots
0:26:36 are good for eye health.
0:26:38 And so our sludge is orange-ish, basically.
0:26:40 Oh, cool.
0:26:41 So it’s actually quite pretty.
0:26:42 It’s like a, it’s like a, it’s like a creamsicle, almost.
0:26:47 I love that.
0:26:48 Yeah.
0:26:49 Okay.
0:26:50 So you got your creamsicle sludge.
0:26:51 It’s demo day.
0:26:52 What, like you put it in like a plastic jug or something?
0:26:55 Just like…
0:26:56 Basically.
0:26:57 What happens?
0:26:58 We had to fly to California with it, and we put it in a plastic jug, basically.
0:27:03 And we carried it around in our rental car all week.
0:27:07 And then we got on stage and, you know, we had a sort of line where we’re talking about
0:27:11 palm oil, and we kind of held the jug with a little bit of oil, and we said, “And this
0:27:19 is palm oil, but it’s made from yeast and not trees.”
0:27:26 Still to come on the show, getting from that homebrew jug of creamsicle sludge to hundreds
0:27:32 of tons of creamsicle sludge.
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0:28:26 Hey everybody, I’m Kyle Rizdal, the host of Marketplace, your daily download on Vanta.
0:28:32 On the economy, money influences so much of what we do and how we live.
0:28:37 That’s why it’s essential to understand how this economy works.
0:28:41 At Marketplace, we break down everything from inflation and student loans to the future
0:28:45 of AI so that you can understand what it all means for you.
0:28:50 Marketplace is your secret weapon for understanding this economy.
0:28:53 Listen, wherever you get your podcasts.
0:29:00 You’re not yet to scale and cost, which clearly are hard, but at least in terms of the thing,
0:29:05 you’ve got the thing.
0:29:06 We’ve got the thing.
0:29:09 We got the thing pretty early.
0:29:12 That was important because as you alluded to, we have a whole bunch of other problems
0:29:16 to solve.
0:29:17 As you’re building a business like this, I think we try to think about what’s the most
0:29:22 important thing to solve, what’s the most important problem to solve right now.
0:29:27 At that point, it was still the stuff around the technology basically works.
0:29:34 Further it proves that it can scale, prove that you can get to competitive economics,
0:29:40 and then figure out actually scaling, go to market, figure out all of that later.
0:29:46 That was really the first big problem.
0:29:51 It always seems with things in a lab, and this is like Pat Brown from Impossible Foods
0:29:55 says this too.
0:29:57 It’s hard to grow plants and animals.
0:29:59 They’re big.
0:30:00 They take up a lot of space.
0:30:01 If you could do a thing out of that, it should be cheaper.
0:30:04 Clearly it’s hard.
0:30:05 There’s a lot embedded in that should, right?
0:30:07 But at a just first principles level, it seems totally plausible.
0:30:14 That’s the promise of what we’re all working on.
0:30:17 The place where the rubber hits the road is you have to be making the right molecule and
0:30:23 the right market.
0:30:24 Scale is really hard.
0:30:27 Agriculture is so highly, it’s so vast.
0:30:30 There’s so much economy of scale.
0:30:32 It’s very efficient.
0:30:33 Obviously, there’s externalities that they’re not paying for, but even so, agriculture is
0:30:40 super efficient.
0:30:41 Say that for it.
0:30:42 They’re very good at making a lot of what they make cheaply.
0:30:45 They’ve also had a really long time to make it efficient.
0:30:50 One of the challenges of, I would say, any novel technology competing against a big incumbent
0:30:55 like that, and specifically ours, is they’ve had a century plus advantage on us for getting
0:31:02 it to scale, for getting those cost.
0:31:05 Of course it takes us more time and money to get there.
0:31:08 Of course we’re disadvantaged.
0:31:10 Can we get there?
0:31:11 Yes.
0:31:12 But you’ve got to have ambitious people building the technology.
0:31:16 You’ve got to have funding support deploying it.
0:31:18 You’ve got to have customers adopting it.
0:31:21 I believe we can get there, but it takes time and money.
0:31:25 You’ve got your palm oil, substitute, you’ve got some money.
0:31:31 What are a couple of the key things you have figured out since then to get from where you
0:31:35 were then to where you are now?
0:31:38 At that point, again, the technology was basically working.
0:31:44 A couple of the key things were getting enough data to be able to build a cost model that
0:31:52 was believable.
0:31:54 In the early days, you don’t really have credible data.
0:31:59 You can guess and you can directionally say, “I think, in theory, it’s possible.
0:32:05 It’s possible.”
0:32:06 Sure.
0:32:07 It’s very hard to build a credible model based on using your friend’s homebrew kit.
0:32:12 Exactly.
0:32:13 In the early days, it was all based on theoretical possibility.
0:32:20 One of the important pieces was getting enough data repeatedly and showing improvements that
0:32:29 indicated we’re actually on track to hit those theoretical limits.
0:32:34 A really important step, and by the way, this is ever-evolving.
0:32:38 We update our model basically daily with new updates, but getting something that indicated
0:32:46 we could hit single digits, dollars per kilogram.
0:32:53 You need to prove that, I mean, obviously, it needs to be true or your company’s not
0:32:57 going to work, but you need to prove it what?
0:33:00 To get funding, you need to prove it to get advanced commitments from buyers, both of
0:33:04 those.
0:33:05 We also needed to prove it to ourselves.
0:33:08 Why are we doing this?
0:33:11 Seriously.
0:33:12 When we started this, it was possible, but we didn’t really know.
0:33:17 I think it was important for us to say, and again, we know that this field is hard.
0:33:22 We had to really be able to say, “We believe credibly that we can get this to a cost structure
0:33:28 that will work.”
0:33:29 That was just a really important milestone for us to hit.
0:33:34 The data to support a cost that could be competitive was really important, and that
0:33:40 came on the back of years of experiments and improvements to the bio process.
0:33:48 What cost are you at now?
0:33:49 What cost per kilogram?
0:33:52 At scale, we’re below $10 a kilogram, which is really close to where we need to be.
0:33:59 We’ve still got ability to improve that, and we will, but we’re pretty happy with where
0:34:04 we are today for being pretty early into the commercial lifecycle of the company.
0:34:10 Does that price mean there are companies that will buy from you at that price and sell at
0:34:15 something of a premium, sort of analogous to organic food or something?
0:34:19 Some people are willing to pay more.
0:34:20 Is it like that?
0:34:21 Is that where you are now?
0:34:22 Yeah.
0:34:23 That’s where the technology is.
0:34:26 In terms of commercial, we launched commercially for the first time a little over a year ago.
0:34:33 It’s your own product.
0:34:35 We did launch with our own product.
0:34:37 The business model is B2B ingredients, but we did launch with our own products.
0:34:43 So am I allowed to curse on here, or should I?
0:34:46 Yes.
0:34:47 Yes, you are.
0:34:48 We launched the Palmless platform for sustainable ingredients last March.
0:34:55 It was introducing our platform really to the world for the first time.
0:35:00 With it, we launched a direct-to-consumer product, which was a nourishing oil.
0:35:06 We called it Save the Fucking Rainforest under Palmless.
0:35:11 Nourishing.
0:35:12 It’s skincare, right?
0:35:13 To be clear.
0:35:14 It’s not nourishing in the sense of it.
0:35:15 Skin, hair, body.
0:35:17 You can use it in any of those, but just don’t eat it.
0:35:21 We launched that.
0:35:23 The product sold out in two hours.
0:35:25 We had over a billion media impressions with $0 marketing spend.
0:35:31 Most excitingly, we had inbounds from about 147 manufacturers of consumer goods, our customers.
0:35:42 That product is basically marketing.
0:35:44 You’re not selling that to make money or it’s like marketing swag that people pay for.
0:35:50 It goes back to the idea of making it real.
0:35:53 Right.
0:35:54 We tried to sell to these companies and we can spend a long time in conversation, but
0:36:01 by making it real, by putting a product out there, by the way, getting every major media
0:36:08 publication wanting to write about it.
0:36:12 Since then, we’ve started selling the product to customers.
0:36:16 We have closed multiple purchase orders.
0:36:19 We’ve sold metric tons of our oil to manufacturers.
0:36:25 We’ve started in beauty and personal care.
0:36:28 One of those companies launched a soap bar last year.
0:36:32 We’ve had companies launch.
0:36:33 We’ve got one that’s launching a sun care product soon.
0:36:36 We’ve had dozen or so customers place purchase orders.
0:36:41 The third thing that’s happened really in the past year is the EU has passed landmark
0:36:47 legislation, the EU deforestation regulation, where they are monitoring seven crops, including
0:36:53 palm oil and soybean oil.
0:36:56 For companies that import and use these crops, they have to have a totally new way of validating
0:37:03 that they did not come from deforestation.
0:37:05 If they are unable to do that, they can be fined up to 5% of their annual revenue, which
0:37:11 is a material stick.
0:37:13 Sure.
0:37:14 Sure.
0:37:15 They basically drive up the cost of palm oil to companies selling in Europe.
0:37:20 It will also dry up supply because most of the palm oil today, you just can’t prove if
0:37:25 it came from deforestation.
0:37:28 That regulation is what you were waiting for as a company, is what you’re telling me.
0:37:32 I couldn’t have told you that we thought this would have happened, but it’s a great tailwind.
0:37:40 I would say we’re in conversations with many of the largest food manufacturers and we are
0:37:47 very close to converting to a multi-year agreement with a large consumer goods manufacturer
0:37:52 in Europe as well.
0:37:54 Why might you fail?
0:38:00 We’re taking on, I mean, nothing about this is easy.
0:38:06 Getting from an idea to a technology that works in scales, that’s using biology nonetheless,
0:38:12 is not easy.
0:38:15 Tackling a large, mostly commodity market with lots of momentum is not easy.
0:38:27 Getting large multinationals to change their buying behavior is not easy.
0:38:33 In order to win, we have to get really big, really fast.
0:38:40 Because if you don’t get really big, the oil won’t be cheap enough, is it as simple as
0:38:44 that?
0:38:45 That’s right.
0:38:46 It won’t be cheap enough and we can’t solve the needs of these large companies.
0:38:52 The company I was just talking about, these companies may buy hundreds of thousands to
0:38:56 millions of metric tons of palm oil per year.
0:39:00 How much can you make now?
0:39:02 We’re on track to make hundreds of metric tons this year, which is great, by the way.
0:39:08 You need to go up 1000X now, basically.
0:39:12 We need to go bigger, faster.
0:39:15 That’s the number one thing that keeps me up at night, is we have brought this thing
0:39:21 to market so fast and faster than most people thought was possible for a biotech, but we’re
0:39:27 not just competing with biotechs.
0:39:30 We’re competing in this big world.
0:39:33 From a company perspective, also from a climate perspective, we have to go bigger, faster.
0:39:40 If we fail, it’s because we can’t get big enough, fast enough.
0:39:46 I don’t, perhaps there’s a technical reason for that.
0:39:52 That seems unlikely.
0:39:53 The technology works.
0:39:56 There’s probably something else.
0:39:57 It’s execution risk.
0:39:59 It’s execution risk.
0:40:00 I think so.
0:40:02 We’re making real widgets.
0:40:03 We’re making real physical things.
0:40:05 Physical things that soon people will be eating, which is non-trivial.
0:40:10 What does your company look like?
0:40:11 I don’t know.
0:40:12 I often say five years at this point, but I feel like for your company, I want to say
0:40:16 a year or 18 months or something.
0:40:19 If things go well, where are you going to be in a year or two?
0:40:21 We’re at a really exciting point.
0:40:24 We just crossed the bridge.
0:40:26 A year ago, we were just an R&D company.
0:40:30 Now we’re commercial.
0:40:31 It’s a really exciting point in the company’s life.
0:40:34 Again, we’ve made some small sales.
0:40:36 We know people want the thing, but now it’s like gas.
0:40:41 We need to put the gas on.
0:40:43 Go time.
0:40:44 Go time.
0:40:45 In a year or two, we want to be making money.
0:40:52 The thing is, we didn’t really talk about this, but our go-to-market has started, instead
0:40:57 of tackling the really big, really cheap market first, which is, by the way, what biofuels
0:41:03 companies did and what a lot of companies have done by chasing food first, we’ve taken
0:41:09 more of the Tesla approach.
0:41:12 Start in a market where you can make a better performing product and people are willing
0:41:16 to pay premiums, and then take all the money that you make and funnel it back into the
0:41:20 business, drive scale, drive down cost, and then take on the big market.
0:41:26 Your Tesla Roadster is like $60 skin oil?
0:41:30 Yes, basically.
0:41:32 It’s in the beauty and personal care industry, and our customers will sell products anywhere.
0:41:38 Sometimes they’re $30, but sometimes they’re $230.
0:41:43 In that market, there’s a willingness to pay.
0:41:45 There’s fast adoption, and they care about both innovation and sustainability, which
0:41:50 is what we care about.
0:41:53 We’re really driving forward there, but we do have ambitions to move into food, I would
0:41:58 say, within about two years as well.
0:42:01 We’re chasing a lot of things in the next two years, which is, go become the hottest
0:42:07 ingredient in beauty and personal care, get revenue material in support of that, and get
0:42:16 the business to a position where we can start to really scale it from a profitability perspective,
0:42:23 and move into more markets, geographically larger scale, and new markets like food.
0:42:31 We’ll be back in a minute with the lightning round.
0:42:43 Hey everybody, I’m Kai Rizdal, the host of Marketplace, your daily download on the economy.
0:42:48 Money influences so much of what we do and how we live.
0:42:52 That’s why it’s essential to understand how this economy works.
0:42:56 At Marketplace, we break down everything from inflation and student loans to the future
0:43:00 of AI, so that you can understand what it all means for you.
0:43:04 Marketplace is your secret weapon for understanding this economy.
0:43:07 Listen, wherever you get your podcasts.
0:43:13 Now it’s time for the lightning round.
0:43:16 What’s your favorite product that contains palm oil?
0:43:19 I love chocolate, and almost all the chocolate, and I love like the, I love like gas station
0:43:23 chocolate.
0:43:24 Uh-huh.
0:43:25 Cheap, crappy, garbage chocolate.
0:43:27 I know.
0:43:28 I love my mom, but they almost all got palm oil, unfortunately.
0:43:35 What do you wish more people knew about yeast?
0:43:39 I think yeast and like microbes and microorganisms, they have a negative connotation, but like
0:43:47 they’re really amazing.
0:43:49 They’re really this workhorse, they’re natural, and so I just wish that they had a positive
0:43:54 connotation instead of a negative connotation.
0:43:56 Yeah, if one didn’t think infection, it would help.
0:44:00 Exactly.
0:44:01 Yeah.
0:44:02 Yeah.
0:44:03 That’s what I think.
0:44:04 It’s better than bacteria.
0:44:05 Yeah.
0:44:06 Yeah.
0:44:07 Fair.
0:44:08 But yeah.
0:44:09 Before you went to grad school, you worked at Goldman Sachs.
0:44:10 What is one thing that you learned at Goldman that’s been useful to you running a company?
0:44:13 I really learned how to work at Goldman as a 22-year-old who knew like nothing.
0:44:21 I think it was a really incredible training ground, and I think it just built a great
0:44:25 foundation for how to work, how to communicate, and I’m very grateful for my time there.
0:44:33 What’s the most underrated LCD sound system song?
0:44:37 Someone great.
0:44:40 What’s one thing I should not do if I go to Austin, Texas?
0:44:46 Hot take.
0:44:47 Don’t eat Tex-Mex because it’s better in San Antonio.
0:44:51 Okay.
0:44:52 San Antonio is your hometown?
0:44:53 Yeah.
0:44:54 Okay.
0:44:55 Well, if I’m in San Antonio, where should I eat Tex-Mex?
0:44:59 Teca Molina.
0:45:02 What was one surprising thing about meeting Prince William and Kate Middleton?
0:45:09 Gosh, so many.
0:45:12 I mean, I was not intimidated at first.
0:45:17 Their staff was really training us on how to approach them.
0:45:22 I did not think I was intimidated.
0:45:24 I, you know, when I met them and as soon as they walked in the room, it’s like my heart
0:45:29 hit the ceiling.
0:45:30 It was just, they have this royal presence, and they have this really strong presence.
0:45:35 They’re also both lovely, and they knew so much about palm oil.
0:45:40 So they were really well-prepped and informed, and it was lovely.
0:45:46 Yeah.
0:45:47 So you were inspired by this class you took at MIT called Revolutionary Ventures.
0:45:51 I’m curious, what is one thing that you learned in that class that has stayed with you?
0:46:01 Technology is necessary, but not sufficient.
0:46:06 Revolutionary Ventures always require a breakthrough in technology, but that’s just a fraction
0:46:12 of what it takes to actually get things successful.
0:46:15 There’s the adoption piece, there’s the funding piece, there’s the scaling piece.
0:46:20 So technology is critical, but insufficient.
0:46:26 Shera Tiku is the co-founder and CEO of C16 Biosciences.
0:46:32 Today’s show was produced by Gabriel Hunter-Chang, edited by Lydia Jean-Cott, and engineered
0:46:37 by Sarah Brugger.
0:46:40 Please email us at problem@pushkin.fm, tell us how we can make the show better, and we
0:46:46 should interview.
0:46:47 We’re going to take a couple of weeks off, but we’ll be back before too long.
0:46:51 I’m Jacob Goldstein, thanks for listening.
0:46:58 Hey everybody, I’m Kai Rizdal, the host of Marketplace, your daily download on the economy.
0:47:07 Money influences so much of what we do and how we live.
0:47:11 That’s why it’s essential to understand how this economy works.
0:47:15 At Marketplace, we break down everything from inflation and student loans to the future
0:47:18 of AI so that you can understand what it all means for you.
0:47:23 Marketplace is your secret weapon for understanding this economy.
0:47:26 Listen wherever you get your podcasts.
0:47:28 (upbeat music)
0:00:06 Pushkin.
0:00:06 [MUSIC]
0:00:11 >> Hey everybody, I’m Kai Rizdal, the host of Marketplace,
0:00:13 your daily download on the economy.
0:00:16 Money influences so much of what we do and how we live.
0:00:19 That’s why it’s essential to understand how this economy works.
0:00:23 At Marketplace, we break down everything from inflation and
0:00:26 student loans to the future of AI so that you can understand what it all means for you.
0:00:32 Marketplace is your secret weapon for
0:00:34 understanding this economy, listen, wherever you get your podcasts.
0:00:37 [MUSIC]
0:00:41 Palm oil is vegetable oil made from palm trees.
0:00:45 And it’s hiding in a ton of the stuff we use every single day.
0:00:49 Palm oil is in chips, it’s in crackers, cookies, peanut butter.
0:00:55 It’s also in soap, it’s in shampoo, it’s in detergent.
0:00:58 Palm oil is in lotion, it’s in lipstick.
0:01:02 And you can’t even tell, by looking at the list of ingredients,
0:01:06 whether a thing you’re holding in your hand has palm oil in it.
0:01:10 Because it might be listed as vegetable oil, or as steric acid, or
0:01:14 as sodium, laurel, sulfate, or as lots of other things.
0:01:19 Palm oil is in so many things because it is very, very useful.
0:01:23 But also, growing all the palm trees to make all this palm oil,
0:01:29 turns out to be really, really bad for the planet.
0:01:33 So it would be great if somebody could come up with a cheap,
0:01:36 scalable way to get palm oil without palm trees.
0:01:40 [MUSIC]
0:01:46 I’m Jacob Goldstein, and this is What’s Your Problem.
0:01:48 My guest today is Shera Tiku.
0:01:50 She’s the co-founder of C16 Biosciences.
0:01:54 Shera’s problem is this.
0:01:56 Can you get yeast to make a molecule that does basically all the good
0:02:00 stuff that palm oil does?
0:02:02 So that you can get what is basically palm oil, without palm trees.
0:02:07 [MUSIC]
0:02:11 Why is palm oil so great?
0:02:13 >> It’s really good at what it does, and it does a lot of things.
0:02:17 So palm oil is an oil as a vegetable oil.
0:02:21 And oils and fats show up in a lot of products.
0:02:25 They show up in food, they show up in cleaning products.
0:02:28 They show up even in biodiesel and sustainable aviation fuel and lubricants.
0:02:34 And palm oil is the most popular among them because it can do the most things.
0:02:40 So it really drives performance in things like soap.
0:02:45 It is the molecule responsible for foaming and cleansing,
0:02:49 which is exactly what you want to soap to do.
0:02:51 And in things like peanut butter, the profile of palm oil is the reason that
0:02:57 your peanut butter stays together with a really smooth, spoonable emulsion.
0:03:03 And if you take it out, you have that layer of oil separation.
0:03:06 So it’s about function and
0:03:09 performance across a very wide range of consumer goods.
0:03:13 And no other vegetable oil has the same profile that can drive those performance
0:03:20 properties.
0:03:21 And so even if a company wanted to replace palm oil in their products,
0:03:28 they really haven’t been able to because they end up having to sacrifice performance.
0:03:32 And nobody wants to sacrifice performance.
0:03:35 >> Why is palm oil bad?
0:03:37 >> The only problem with palm oil is the way that it’s produced.
0:03:42 And the way that it’s produced primarily today is by converting land.
0:03:48 The tree, it really thrives in about a five to ten degree range around the equator.
0:03:54 That land right around the equator is typically primary forest, tropical rain forest.
0:04:00 Which is some of the most biodiverse, precious land on earth.
0:04:05 They’re carbon sinks, thousands of animal species call these home.
0:04:09 And palm growers over the past few decades have really been moving to clear that land.
0:04:16 They slash and burn it, which emits tons of carbon dioxide into the air.
0:04:22 They clear the land and they convert it to these single crop palm oil plantations.
0:04:28 And so the main impacts are carbon dioxide emissions.
0:04:32 The palm oil industry is responsible for about 2% of global greenhouse gas emissions.
0:04:37 Which is more than the entire global aviation sector.
0:04:41 Just this one crop.
0:04:43 It has an impact on land use, which is converting this sort of precious,
0:04:48 biodiverse rain forest into monoculture where other things can’t grow.
0:04:53 The impact on wildlife, and then I would say last but not least,
0:04:56 are sort of the impact on the humans that live there.
0:04:59 Which is, it pollutes the air, which is, and the water streams.
0:05:03 But it also puts lots of people out of their home and forced into low wage,
0:05:08 very hard labor conditions.
0:05:10 >> So okay, so that’s the broader context.
0:05:14 You personally, as I understand it, got into the palm oil or
0:05:17 alternative palm oil business more or less when you were in business school, right?
0:05:22 You met your co-founders in this class,
0:05:24 the title of which I love, a class called Revolutionary Ventures, great class name.
0:05:29 What exactly happened there?
0:05:31 >> We just start asking, okay, palm oil’s in 50% of products on supermarket shelves.
0:05:36 It’s really, it’s one of the worst emitters from a greenhouse gas perspective.
0:05:42 And every major consumer packaged goods company knows it and
0:05:46 has admitted it and has a palm oil policy to switch from what they call
0:05:51 conflict palm oil, but they’ve all failed.
0:05:54 >> Sort of like the net zero of consumer packaged goods problem.
0:05:59 >> Definitely, definitely.
0:06:01 >> Yeah.
0:06:01 >> And why has it failed?
0:06:03 Why has agriculture failed to solve this problem?
0:06:07 And could microbiology create a new way to solve this problem?
0:06:12 And what would have to be true?
0:06:14 And we just got started with that really simple question and
0:06:18 $1,000 from MIT.
0:06:20 And we started thinking from first principles about what would have to be true.
0:06:25 And then we started playing around in the lab, and that’s how we got started.
0:06:29 I mean, you have this very abstract idea.
0:06:33 Let’s find something that can do what palm oil does without palm trees.
0:06:37 >> Yep.
0:06:38 >> How do you get from there to a product?
0:06:42 >> Yeah, so the basic idea was today we make oils and
0:06:45 fats from petroleum or animals or plants.
0:06:50 What if we looked at the fungal kingdom, microorganisms instead?
0:06:56 And so the very first step was defining what would have to be true at scale for
0:07:01 this to succeed.
0:07:03 So we knew we needed to make, I mentioned earlier, palm oil is so
0:07:07 good at what it does because it has this really unique profile of fats.
0:07:12 And that drives performance.
0:07:14 >> So it can do lots of different things.
0:07:16 >> Yeah. >> It’s like remarkably useful in many ways.
0:07:19 >> Exactly.
0:07:19 So we knew if we were going to solve this problem, we had to nail that profile.
0:07:24 Because you had to be able to do all of those things remarkably well.
0:07:29 >> It’s not obvious to me that that’s the case.
0:07:31 I mean, I feel like you could just bite off some of it, right?
0:07:34 If you could do the foaming part so
0:07:36 that you could get palm oil out of shampoo, that would be a big deal, right?
0:07:40 >> I think that’s true, but at this point, we had a big idea.
0:07:46 And this really was a big problem we were trying to solve.
0:07:52 And so that was how we thought about it.
0:07:54 And so the first step is, can you find a microorganism which can make oil,
0:07:59 which can make this profile, this profile that looks and functions like palm?
0:08:05 >> And just to be clear, why is a microorganism better than a plant?
0:08:10 >> One of the, I think, big promises of this field and
0:08:14 when we started thinking about it is plants have big footprints.
0:08:19 And right now, they require specific conditions of growth on arable land.
0:08:25 And microorganisms don’t need arable land.
0:08:28 They don’t need to convert rainforest and clear them and
0:08:32 convert them into plantations and kill all the life that lives there.
0:08:36 Microorganisms can be produced in factories anywhere in the world.
0:08:43 >> They just need a big metal tank.
0:08:45 >> A metal tank?
0:08:46 >> Heat and some sugar to eat.
0:08:47 >> Electricity, some basic things.
0:08:50 That was the primary sort of concept.
0:08:53 The hard question was, can microorganisms actually make the products?
0:08:59 And can they make them scalably?
0:09:01 And can they make them cost effectively?
0:09:03 So can you make the right product at scale and cost competitively?
0:09:07 That was the sort of unknown part.
0:09:09 And that was what we had to figure out first.
0:09:12 And we basically started by screening thousands of microorganisms against
0:09:17 that criteria to say, could we find an organism that makes the right oil profile?
0:09:25 It is, in theory, robust enough to scale to super large volumes.
0:09:30 Because there’s tens of millions of metric tons of palm oil produced a year.
0:09:34 And again, we’re thinking revolutionary.
0:09:36 We’ve got to go really, really big and can compete on cost.
0:09:41 And so it’s got to be a really efficient production system.
0:09:43 And so that was the first set of questions that we asked.
0:09:48 >> And when you’re trying to find the right microorganism, are you, you’re looking at
0:09:56 the literature.
0:09:57 Is there some point where you start like growing yeast in a tank?
0:10:01 I mean, what is it?
0:10:02 How do you find?
0:10:03 How do you look?
0:10:04 >> Yes, and yes.
0:10:05 So you start with the literature and you start with history.
0:10:10 And so you look back and see what have people made successfully in the past and why.
0:10:17 And you know, a lot of work had actually been done for things like biofuels in the past,
0:10:22 which is similar to the profile that we were making.
0:10:25 There were reasons we thought biofuels didn’t work as well.
0:10:31 But there were technical proofs of concept there.
0:10:33 So we got to learn a lot from history.
0:10:37 And then we looked at the literature for sure.
0:10:39 And one of the things we learned is that, again, getting this specific profile of palm
0:10:45 is really different than how most industrial microbiology works today.
0:10:50 Most companies are making fairly simple molecules.
0:10:53 They’re making alcohol, they’re making a single molecule protein, artificial, you know, vanilla
0:10:59 is almost 100% made from fermentation today, single molecule.
0:11:05 This was a complex molecule.
0:11:07 And so we quickly learned we needed a different type of microorganism, not one that was necessarily
0:11:14 the best factory with the best set of tools, but instead a strain, which was just really
0:11:21 good at getting fat.
0:11:24 And so these are referred to as oleogenus.
0:11:29 Oleogenus means oily.
0:11:30 And so there’s a whole set of oleogenus organisms that naturally produce fat.
0:11:35 And so that was the first unlock.
0:11:37 They had not really been used in industrial scale production historically.
0:11:43 So we were going to have to build a lot of the tools and the know-how to be able to grow
0:11:48 it, but it was really promising.
0:11:50 And so then the next step was you start to grow it.
0:11:52 You get a strain, you do really small scale experiments in the lab, and you just try to
0:11:59 get something which vaguely looks and functions like palm oil.
0:12:02 And that was sort of the first big breakthrough for us.
0:12:08 Did you consider – surely you considered synthetic biology, right?
0:12:13 Like right there in Boston, there’s a giant – at least one giant company that their
0:12:19 whole business is taking yeast and genetically engineering the yeast to produce things other
0:12:26 than the yeast usually produces.
0:12:29 Did you consider that?
0:12:30 So that was I think maybe our first hypothesis.
0:12:34 What we learned was it actually doesn’t have to be that hard.
0:12:39 Like nature actually does a lot of really cool stuff.
0:12:46 And if we can just work with what she, nature, has already done, that’s really promising
0:12:53 for actually getting this thing to scale and be cheap.
0:12:57 And I think when we look at synthetic biology, that was the field that we were sort of enamored
0:13:01 with at the time, and that we thought was very promising.
0:13:05 But it’s a hard field to scale commercially.
0:13:08 Notoriously, right?
0:13:10 It’s been on the cusp of being huge for 20 years, right?
0:13:13 And so looking around the cusp of synthetic biology, but saying how do we just really
0:13:19 focus on solving the problem?
0:13:21 It doesn’t have to be the shiniest toolkit.
0:13:24 It needs to solve the problem.
0:13:27 Maybe if we take it a little bit simpler.
0:13:28 And so instead of taking one of these sort of industrial microorganisms with a standard
0:13:34 toolkit and applying all the tools of engineering and trying to really force a yeast to do something
0:13:42 that it doesn’t do naturally, what if we found a yeast that actually has evolved for centuries
0:13:48 to do exactly what we want it to do?
0:13:51 And we can force it through faster cycles of evolution, and we can use rapid experimentation
0:13:58 and data to understand better than ever how it grows and optimize its performance of growth.
0:14:05 That sounds a lot more promising to actually building a commercially viable solution to
0:14:10 this problem.
0:14:11 And that’s where we landed.
0:14:14 So it seems like the fact that there are oleaginous microorganisms that, you know, oily microorganisms
0:14:20 basically, it suggests that the production of oil is like profoundly conserved, right?
0:14:26 Like we get oil from plants and animals, but this fact that there’s oily yeast too is encouraging
0:14:33 in your quest.
0:14:34 It’s like, oh, there’s everything that lives makes oil, and some things that live make
0:14:38 a ton of oil.
0:14:39 Let’s look at the things that live that already make a ton of oil.
0:14:42 Yeah.
0:14:43 And it also, I think, just says something about the value of oils and fats, right?
0:14:47 There’s clearly a need for these molecules across lots of applications.
0:14:52 There’s a reason they’re in everything at the store.
0:14:56 So is there some moment where you’re like, “We found it.
0:15:00 We’ve got the magic yeast?”
0:15:03 You’re still waiting for that moment?
0:15:07 I don’t know.
0:15:08 It’s a good question.
0:15:09 I mean, I think, and look like, science is never a straight line.
0:15:13 And so in the early days, we had, our first approach to this was slightly less simple,
0:15:22 right?
0:15:23 It was a little more innovative and clever, but much harder to scale.
0:15:30 And so I think we thought we had that moment, and then we had another moment.
0:15:35 Wait, wait, tell me about the one that didn’t work.
0:15:39 What was the one that ended up being too clever?
0:15:41 Yeah.
0:15:42 Actually, so most of industrial biology today is a single microorganism engineering, the
0:15:50 hell out of it, and then scaling it.
0:15:54 And we sort of said, okay, but actually in nature, again, I think we’ve always been very
0:15:59 inspired by what happens in nature.
0:16:02 In nature, you see microorganisms coexist in our microbiome, for example, or in lichens
0:16:09 on rocks.
0:16:11 And so what if we took a microorganism like a yeast that was really good at making oil,
0:16:18 and then we took one, but the yeast needs sugar.
0:16:22 And so then what if we combined it with an algae that was photosynthetic?
0:16:28 And so then you don’t need sugar.
0:16:30 You just need the sun.
0:16:32 That is indeed clever.
0:16:33 So you’re lowering your input cost.
0:16:35 Exactly.
0:16:36 And you could grow them in the same pot, which really nobody had done before.
0:16:40 And so this is actually our first patent filing, this co-culture of yeast and algae, and it’s
0:16:46 actually our first logo for the company, which is hideous, but made in Microsoft PowerPoint.
0:16:54 And turned out to be based on an assumption that didn’t work, it sounds like.
0:16:58 I think it just would have been very hard to scale it.
0:17:02 So you have this very elegant idea, which I love because it’s so satisfying and efficient.
0:17:07 What happens?
0:17:09 So that’s working.
0:17:11 And what happens is actually I was at a trade show.
0:17:15 I was at a food tech trade show just walking the floor.
0:17:19 This is really early days.
0:17:20 It’s just me and my co-founders, we’ve soft committed to this concept, and I’m just walking
0:17:25 the floor at a trade show trying to see who cares about palm oil, and is anybody interested?
0:17:31 And I run into someone who’s got a bunch of clever ideas on basically waste stream feed
0:17:37 stocks.
0:17:38 So cheaper than sugar, available in millions of gallons per year.
0:17:45 Really scalable, cheap, upcycled.
0:17:49 And just to contextualize that, I mean, growing yeast is very simple, and people say all you
0:17:55 need to do is feed them sugar, but you’re pointing out here like sugar is not free.
0:18:02 Palm oil is very efficiently produced and very cheap.
0:18:05 And so even the input cost of the sugar is important, is an important cost that you need
0:18:10 to drive down if you’re going to be for real.
0:18:12 It’s all math.
0:18:13 And I think to anchor this around the key problem at this point, the scientific solution
0:18:22 we had was elegant and clever, but we’re also trying to build a business.
0:18:29 And I think oftentimes science-based businesses, it’s easy to forget that.
0:18:36 And I think we were really trying to anchor and say, yes, this is elegant and clever.
0:18:42 However, how do we build this into a sustainable, profitable, scalable business over time?
0:18:47 And we were really early, but I think we were always anchored toward that in the early days.
0:18:52 In sugar and where we got our sugar and what we paid for our sugar was sort of the critical
0:18:59 question we unlocked as an insight that we needed to solve from the early days.
0:19:05 This is the fundamental sort of techno-economic problem.
0:19:09 And so it seems, I don’t want to attach too much to the photosynthesis solution, but just
0:19:17 to be very clear, I love that solution.
0:19:19 It seems like you’re solving the problem.
0:19:23 Why didn’t you go that way?
0:19:26 Two reasons.
0:19:27 One was sort of biology and one was manufacturing.
0:19:31 From a biology perspective, clever, but actually still really hard to get two microorganisms
0:19:40 to grow in sync efficiently together, which again all goes back to the math or the techno-economics
0:19:47 of making this scalable.
0:19:49 The second was a manufacturing problem, which is because it was so novel, we would actually
0:19:55 need to build totally new bioreactors to support this.
0:20:00 And then you’re not only a technology company, you’re now manufacturing all the parts.
0:20:05 It just would have become too much and too expensive.
0:20:09 Okay.
0:20:10 Too clever.
0:20:11 Too far.
0:20:12 Too far, too far out beyond the technological frontier at some level.
0:20:17 And so back in sugar being the core problem that we needed to solve to make this work,
0:20:23 we started trying a bunch of waste, things that would be totally not obvious that an
0:20:30 organism could grow on them, things that didn’t have tons of residual carbon, things that
0:20:37 had inhibitors, things that were known to actually inhibit growth, not enable growth.
0:20:42 And we started growing, and this is again very early days.
0:20:45 You’re looking for all those things because they’re cheap, because you’re looking for
0:20:47 a thing that’s cheaper than just buying granulated sugar or whatever you buy for regular use.
0:20:54 Cheap and abundant.
0:20:55 Cheap and abundant.
0:20:57 And this is early days, so it’s scrappy science.
0:21:00 It’s just me and my co-founders.
0:21:01 We don’t have any sophisticated lab tools, but we get some of the samples and we start
0:21:06 growing our yeast and it turns out the yeast grows on anything.
0:21:12 Oh, that’s great.
0:21:13 This was maybe back to your question, one of our biggest insights and breakthroughs.
0:21:19 And it was a really important one.
0:21:20 So you’re like, what if we just give it garbage?
0:21:22 Totally.
0:21:23 It works.
0:21:24 It’s eating garbage.
0:21:25 And we later literally did that.
0:21:26 Food waste is something people talk about a lot, which is an unsolved problem on many
0:21:32 fronts, but we worked with food waste collection here in New York and we just basically fed
0:21:38 it garbage and it was growing.
0:21:40 There are other reasons I think that’s hard to scale, but yeah, basically we found not
0:21:45 only can our yeast make this hard to replicate profile of palm oil, but nothing else has
0:21:53 produced naturally before aside from palm oil.
0:21:58 It can also grow on anything.
0:22:01 It can eat anything.
0:22:02 And that was a key unlock for, so we’d solved the product side of it and now we were well
0:22:08 on our way to solving the cost side of it and the scalability side of it.
0:22:12 The particular strain of yeast, when do you find that?
0:22:18 Like what is that moment?
0:22:19 Pretty early actually.
0:22:21 Pretty early we had identified, based on our criteria of the right profile and from literature,
0:22:31 a believable ability to scale.
0:22:33 So things like can it grow on a wide range of temperatures without breaking or is it
0:22:40 really fragile?
0:22:41 And if the temperature changes, all of these things model into cost at scale manufacturing.
0:22:47 So we screened for those things pretty early and we pretty early on had identified the
0:22:53 yeast strain that we work with today as the best version.
0:22:57 So tell me about the strain of yeast.
0:23:00 So it is oleaginous, so it naturally produces oil and it’s really good.
0:23:07 So basically it can produce up to 90% of its body weight in lipids, in fats.
0:23:14 When we started working with it, which was seven years ago, the genome had been sequenced.
0:23:23 So there was enough data about it and there were a couple of universities that had started
0:23:29 to do work on it.
0:23:31 So we weren’t the first people to discover it, but it wasn’t something that was really
0:23:36 ubiquitous like a baker’s yeast or a brewer’s yeast.
0:23:40 And so we had enough data to believe that it was compelling and we started working with
0:23:45 it.
0:23:46 What’s it called?
0:23:47 It’s, we don’t really say the name of it.
0:23:51 Isn’t it in a patent?
0:23:52 You didn’t patent the name of it?
0:23:54 It is, but they haven’t been published yet.
0:23:56 Okay.
0:23:57 Well, I’ll keep my eye out.
0:24:00 So you’ve got your yeast, you can feed it garbage.
0:24:07 And this is like, what kind of scale are you doing this at?
0:24:11 Is it like a lab bench?
0:24:14 Is it like a pot?
0:24:17 It’s both.
0:24:19 In the early days, when we were sort of looking to get our first round of funding, we were
0:24:26 going on stage at Y Combinator for something called a demo day.
0:24:31 So Y Combinator is the famous startup incubator.
0:24:33 Correct.
0:24:34 So they’d taken a bet on our revolutionary venture and we were so early.
0:24:40 I mean, we’d basically had some shape flask, so milliliter, but at the end of demo day,
0:24:47 we’re still, we’re a science project at this point with a really big market.
0:24:52 And so we had this, I’d say pressure to want to make it real.
0:24:58 One of the things about science-based businesses, it’s great.
0:25:03 The concept is great, but to get funding, you need to make it real as soon as possible.
0:25:08 As soon as it’s real, people get it.
0:25:11 And so we felt we needed pressure to be able to make something not in tiny little milliliter
0:25:17 quantities, but something that I could hold up on stage in a room full of hundreds or
0:25:22 thousands of people could see as material.
0:25:26 And so we had one lab bench that we were renting, and we were just having problems in the lab.
0:25:34 The standards were not working.
0:25:37 We were not making enough oil, the experiments weren’t working.
0:25:41 And so we went over to a friend’s house who was a home brewer, actually, a beer brewer.
0:25:48 And we used his big pot for making, what he uses to make beer at home, out on his porch.
0:25:56 So normally you think about science as being very precious in a controlled environment,
0:26:01 etc.
0:26:02 We just did the opposite.
0:26:03 We were like, we just got to go for it.
0:26:05 So we went out onto his porch, used his home beer brewing material, and we call it sort
0:26:11 of porch yeast, and we brewed a batch of oil from there.
0:26:18 And then what do you get?
0:26:19 What is the output?
0:26:21 A sludge.
0:26:23 So it looks like muddy water?
0:26:25 What’s it look like?
0:26:26 It does, but it’s pretty.
0:26:27 So our yeast actually produces carotenoids.
0:26:31 Carotenoids are also found in carrots, beta-carotene, is what makes carrots orange, and is why carrots
0:26:36 are good for eye health.
0:26:38 And so our sludge is orange-ish, basically.
0:26:40 Oh, cool.
0:26:41 So it’s actually quite pretty.
0:26:42 It’s like a, it’s like a, it’s like a creamsicle, almost.
0:26:47 I love that.
0:26:48 Yeah.
0:26:49 Okay.
0:26:50 So you got your creamsicle sludge.
0:26:51 It’s demo day.
0:26:52 What, like you put it in like a plastic jug or something?
0:26:55 Just like…
0:26:56 Basically.
0:26:57 What happens?
0:26:58 We had to fly to California with it, and we put it in a plastic jug, basically.
0:27:03 And we carried it around in our rental car all week.
0:27:07 And then we got on stage and, you know, we had a sort of line where we’re talking about
0:27:11 palm oil, and we kind of held the jug with a little bit of oil, and we said, “And this
0:27:19 is palm oil, but it’s made from yeast and not trees.”
0:27:26 Still to come on the show, getting from that homebrew jug of creamsicle sludge to hundreds
0:27:32 of tons of creamsicle sludge.
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0:28:53 Listen, wherever you get your podcasts.
0:29:00 You’re not yet to scale and cost, which clearly are hard, but at least in terms of the thing,
0:29:05 you’ve got the thing.
0:29:06 We’ve got the thing.
0:29:09 We got the thing pretty early.
0:29:12 That was important because as you alluded to, we have a whole bunch of other problems
0:29:16 to solve.
0:29:17 As you’re building a business like this, I think we try to think about what’s the most
0:29:22 important thing to solve, what’s the most important problem to solve right now.
0:29:27 At that point, it was still the stuff around the technology basically works.
0:29:34 Further it proves that it can scale, prove that you can get to competitive economics,
0:29:40 and then figure out actually scaling, go to market, figure out all of that later.
0:29:46 That was really the first big problem.
0:29:51 It always seems with things in a lab, and this is like Pat Brown from Impossible Foods
0:29:55 says this too.
0:29:57 It’s hard to grow plants and animals.
0:29:59 They’re big.
0:30:00 They take up a lot of space.
0:30:01 If you could do a thing out of that, it should be cheaper.
0:30:04 Clearly it’s hard.
0:30:05 There’s a lot embedded in that should, right?
0:30:07 But at a just first principles level, it seems totally plausible.
0:30:14 That’s the promise of what we’re all working on.
0:30:17 The place where the rubber hits the road is you have to be making the right molecule and
0:30:23 the right market.
0:30:24 Scale is really hard.
0:30:27 Agriculture is so highly, it’s so vast.
0:30:30 There’s so much economy of scale.
0:30:32 It’s very efficient.
0:30:33 Obviously, there’s externalities that they’re not paying for, but even so, agriculture is
0:30:40 super efficient.
0:30:41 Say that for it.
0:30:42 They’re very good at making a lot of what they make cheaply.
0:30:45 They’ve also had a really long time to make it efficient.
0:30:50 One of the challenges of, I would say, any novel technology competing against a big incumbent
0:30:55 like that, and specifically ours, is they’ve had a century plus advantage on us for getting
0:31:02 it to scale, for getting those cost.
0:31:05 Of course it takes us more time and money to get there.
0:31:08 Of course we’re disadvantaged.
0:31:10 Can we get there?
0:31:11 Yes.
0:31:12 But you’ve got to have ambitious people building the technology.
0:31:16 You’ve got to have funding support deploying it.
0:31:18 You’ve got to have customers adopting it.
0:31:21 I believe we can get there, but it takes time and money.
0:31:25 You’ve got your palm oil, substitute, you’ve got some money.
0:31:31 What are a couple of the key things you have figured out since then to get from where you
0:31:35 were then to where you are now?
0:31:38 At that point, again, the technology was basically working.
0:31:44 A couple of the key things were getting enough data to be able to build a cost model that
0:31:52 was believable.
0:31:54 In the early days, you don’t really have credible data.
0:31:59 You can guess and you can directionally say, “I think, in theory, it’s possible.
0:32:05 It’s possible.”
0:32:06 Sure.
0:32:07 It’s very hard to build a credible model based on using your friend’s homebrew kit.
0:32:12 Exactly.
0:32:13 In the early days, it was all based on theoretical possibility.
0:32:20 One of the important pieces was getting enough data repeatedly and showing improvements that
0:32:29 indicated we’re actually on track to hit those theoretical limits.
0:32:34 A really important step, and by the way, this is ever-evolving.
0:32:38 We update our model basically daily with new updates, but getting something that indicated
0:32:46 we could hit single digits, dollars per kilogram.
0:32:53 You need to prove that, I mean, obviously, it needs to be true or your company’s not
0:32:57 going to work, but you need to prove it what?
0:33:00 To get funding, you need to prove it to get advanced commitments from buyers, both of
0:33:04 those.
0:33:05 We also needed to prove it to ourselves.
0:33:08 Why are we doing this?
0:33:11 Seriously.
0:33:12 When we started this, it was possible, but we didn’t really know.
0:33:17 I think it was important for us to say, and again, we know that this field is hard.
0:33:22 We had to really be able to say, “We believe credibly that we can get this to a cost structure
0:33:28 that will work.”
0:33:29 That was just a really important milestone for us to hit.
0:33:34 The data to support a cost that could be competitive was really important, and that
0:33:40 came on the back of years of experiments and improvements to the bio process.
0:33:48 What cost are you at now?
0:33:49 What cost per kilogram?
0:33:52 At scale, we’re below $10 a kilogram, which is really close to where we need to be.
0:33:59 We’ve still got ability to improve that, and we will, but we’re pretty happy with where
0:34:04 we are today for being pretty early into the commercial lifecycle of the company.
0:34:10 Does that price mean there are companies that will buy from you at that price and sell at
0:34:15 something of a premium, sort of analogous to organic food or something?
0:34:19 Some people are willing to pay more.
0:34:20 Is it like that?
0:34:21 Is that where you are now?
0:34:22 Yeah.
0:34:23 That’s where the technology is.
0:34:26 In terms of commercial, we launched commercially for the first time a little over a year ago.
0:34:33 It’s your own product.
0:34:35 We did launch with our own product.
0:34:37 The business model is B2B ingredients, but we did launch with our own products.
0:34:43 So am I allowed to curse on here, or should I?
0:34:46 Yes.
0:34:47 Yes, you are.
0:34:48 We launched the Palmless platform for sustainable ingredients last March.
0:34:55 It was introducing our platform really to the world for the first time.
0:35:00 With it, we launched a direct-to-consumer product, which was a nourishing oil.
0:35:06 We called it Save the Fucking Rainforest under Palmless.
0:35:11 Nourishing.
0:35:12 It’s skincare, right?
0:35:13 To be clear.
0:35:14 It’s not nourishing in the sense of it.
0:35:15 Skin, hair, body.
0:35:17 You can use it in any of those, but just don’t eat it.
0:35:21 We launched that.
0:35:23 The product sold out in two hours.
0:35:25 We had over a billion media impressions with $0 marketing spend.
0:35:31 Most excitingly, we had inbounds from about 147 manufacturers of consumer goods, our customers.
0:35:42 That product is basically marketing.
0:35:44 You’re not selling that to make money or it’s like marketing swag that people pay for.
0:35:50 It goes back to the idea of making it real.
0:35:53 Right.
0:35:54 We tried to sell to these companies and we can spend a long time in conversation, but
0:36:01 by making it real, by putting a product out there, by the way, getting every major media
0:36:08 publication wanting to write about it.
0:36:12 Since then, we’ve started selling the product to customers.
0:36:16 We have closed multiple purchase orders.
0:36:19 We’ve sold metric tons of our oil to manufacturers.
0:36:25 We’ve started in beauty and personal care.
0:36:28 One of those companies launched a soap bar last year.
0:36:32 We’ve had companies launch.
0:36:33 We’ve got one that’s launching a sun care product soon.
0:36:36 We’ve had dozen or so customers place purchase orders.
0:36:41 The third thing that’s happened really in the past year is the EU has passed landmark
0:36:47 legislation, the EU deforestation regulation, where they are monitoring seven crops, including
0:36:53 palm oil and soybean oil.
0:36:56 For companies that import and use these crops, they have to have a totally new way of validating
0:37:03 that they did not come from deforestation.
0:37:05 If they are unable to do that, they can be fined up to 5% of their annual revenue, which
0:37:11 is a material stick.
0:37:13 Sure.
0:37:14 Sure.
0:37:15 They basically drive up the cost of palm oil to companies selling in Europe.
0:37:20 It will also dry up supply because most of the palm oil today, you just can’t prove if
0:37:25 it came from deforestation.
0:37:28 That regulation is what you were waiting for as a company, is what you’re telling me.
0:37:32 I couldn’t have told you that we thought this would have happened, but it’s a great tailwind.
0:37:40 I would say we’re in conversations with many of the largest food manufacturers and we are
0:37:47 very close to converting to a multi-year agreement with a large consumer goods manufacturer
0:37:52 in Europe as well.
0:37:54 Why might you fail?
0:38:00 We’re taking on, I mean, nothing about this is easy.
0:38:06 Getting from an idea to a technology that works in scales, that’s using biology nonetheless,
0:38:12 is not easy.
0:38:15 Tackling a large, mostly commodity market with lots of momentum is not easy.
0:38:27 Getting large multinationals to change their buying behavior is not easy.
0:38:33 In order to win, we have to get really big, really fast.
0:38:40 Because if you don’t get really big, the oil won’t be cheap enough, is it as simple as
0:38:44 that?
0:38:45 That’s right.
0:38:46 It won’t be cheap enough and we can’t solve the needs of these large companies.
0:38:52 The company I was just talking about, these companies may buy hundreds of thousands to
0:38:56 millions of metric tons of palm oil per year.
0:39:00 How much can you make now?
0:39:02 We’re on track to make hundreds of metric tons this year, which is great, by the way.
0:39:08 You need to go up 1000X now, basically.
0:39:12 We need to go bigger, faster.
0:39:15 That’s the number one thing that keeps me up at night, is we have brought this thing
0:39:21 to market so fast and faster than most people thought was possible for a biotech, but we’re
0:39:27 not just competing with biotechs.
0:39:30 We’re competing in this big world.
0:39:33 From a company perspective, also from a climate perspective, we have to go bigger, faster.
0:39:40 If we fail, it’s because we can’t get big enough, fast enough.
0:39:46 I don’t, perhaps there’s a technical reason for that.
0:39:52 That seems unlikely.
0:39:53 The technology works.
0:39:56 There’s probably something else.
0:39:57 It’s execution risk.
0:39:59 It’s execution risk.
0:40:00 I think so.
0:40:02 We’re making real widgets.
0:40:03 We’re making real physical things.
0:40:05 Physical things that soon people will be eating, which is non-trivial.
0:40:10 What does your company look like?
0:40:11 I don’t know.
0:40:12 I often say five years at this point, but I feel like for your company, I want to say
0:40:16 a year or 18 months or something.
0:40:19 If things go well, where are you going to be in a year or two?
0:40:21 We’re at a really exciting point.
0:40:24 We just crossed the bridge.
0:40:26 A year ago, we were just an R&D company.
0:40:30 Now we’re commercial.
0:40:31 It’s a really exciting point in the company’s life.
0:40:34 Again, we’ve made some small sales.
0:40:36 We know people want the thing, but now it’s like gas.
0:40:41 We need to put the gas on.
0:40:43 Go time.
0:40:44 Go time.
0:40:45 In a year or two, we want to be making money.
0:40:52 The thing is, we didn’t really talk about this, but our go-to-market has started, instead
0:40:57 of tackling the really big, really cheap market first, which is, by the way, what biofuels
0:41:03 companies did and what a lot of companies have done by chasing food first, we’ve taken
0:41:09 more of the Tesla approach.
0:41:12 Start in a market where you can make a better performing product and people are willing
0:41:16 to pay premiums, and then take all the money that you make and funnel it back into the
0:41:20 business, drive scale, drive down cost, and then take on the big market.
0:41:26 Your Tesla Roadster is like $60 skin oil?
0:41:30 Yes, basically.
0:41:32 It’s in the beauty and personal care industry, and our customers will sell products anywhere.
0:41:38 Sometimes they’re $30, but sometimes they’re $230.
0:41:43 In that market, there’s a willingness to pay.
0:41:45 There’s fast adoption, and they care about both innovation and sustainability, which
0:41:50 is what we care about.
0:41:53 We’re really driving forward there, but we do have ambitions to move into food, I would
0:41:58 say, within about two years as well.
0:42:01 We’re chasing a lot of things in the next two years, which is, go become the hottest
0:42:07 ingredient in beauty and personal care, get revenue material in support of that, and get
0:42:16 the business to a position where we can start to really scale it from a profitability perspective,
0:42:23 and move into more markets, geographically larger scale, and new markets like food.
0:42:31 We’ll be back in a minute with the lightning round.
0:42:43 Hey everybody, I’m Kai Rizdal, the host of Marketplace, your daily download on the economy.
0:42:48 Money influences so much of what we do and how we live.
0:42:52 That’s why it’s essential to understand how this economy works.
0:42:56 At Marketplace, we break down everything from inflation and student loans to the future
0:43:00 of AI, so that you can understand what it all means for you.
0:43:04 Marketplace is your secret weapon for understanding this economy.
0:43:07 Listen, wherever you get your podcasts.
0:43:13 Now it’s time for the lightning round.
0:43:16 What’s your favorite product that contains palm oil?
0:43:19 I love chocolate, and almost all the chocolate, and I love like the, I love like gas station
0:43:23 chocolate.
0:43:24 Uh-huh.
0:43:25 Cheap, crappy, garbage chocolate.
0:43:27 I know.
0:43:28 I love my mom, but they almost all got palm oil, unfortunately.
0:43:35 What do you wish more people knew about yeast?
0:43:39 I think yeast and like microbes and microorganisms, they have a negative connotation, but like
0:43:47 they’re really amazing.
0:43:49 They’re really this workhorse, they’re natural, and so I just wish that they had a positive
0:43:54 connotation instead of a negative connotation.
0:43:56 Yeah, if one didn’t think infection, it would help.
0:44:00 Exactly.
0:44:01 Yeah.
0:44:02 Yeah.
0:44:03 That’s what I think.
0:44:04 It’s better than bacteria.
0:44:05 Yeah.
0:44:06 Yeah.
0:44:07 Fair.
0:44:08 But yeah.
0:44:09 Before you went to grad school, you worked at Goldman Sachs.
0:44:10 What is one thing that you learned at Goldman that’s been useful to you running a company?
0:44:13 I really learned how to work at Goldman as a 22-year-old who knew like nothing.
0:44:21 I think it was a really incredible training ground, and I think it just built a great
0:44:25 foundation for how to work, how to communicate, and I’m very grateful for my time there.
0:44:33 What’s the most underrated LCD sound system song?
0:44:37 Someone great.
0:44:40 What’s one thing I should not do if I go to Austin, Texas?
0:44:46 Hot take.
0:44:47 Don’t eat Tex-Mex because it’s better in San Antonio.
0:44:51 Okay.
0:44:52 San Antonio is your hometown?
0:44:53 Yeah.
0:44:54 Okay.
0:44:55 Well, if I’m in San Antonio, where should I eat Tex-Mex?
0:44:59 Teca Molina.
0:45:02 What was one surprising thing about meeting Prince William and Kate Middleton?
0:45:09 Gosh, so many.
0:45:12 I mean, I was not intimidated at first.
0:45:17 Their staff was really training us on how to approach them.
0:45:22 I did not think I was intimidated.
0:45:24 I, you know, when I met them and as soon as they walked in the room, it’s like my heart
0:45:29 hit the ceiling.
0:45:30 It was just, they have this royal presence, and they have this really strong presence.
0:45:35 They’re also both lovely, and they knew so much about palm oil.
0:45:40 So they were really well-prepped and informed, and it was lovely.
0:45:46 Yeah.
0:45:47 So you were inspired by this class you took at MIT called Revolutionary Ventures.
0:45:51 I’m curious, what is one thing that you learned in that class that has stayed with you?
0:46:01 Technology is necessary, but not sufficient.
0:46:06 Revolutionary Ventures always require a breakthrough in technology, but that’s just a fraction
0:46:12 of what it takes to actually get things successful.
0:46:15 There’s the adoption piece, there’s the funding piece, there’s the scaling piece.
0:46:20 So technology is critical, but insufficient.
0:46:26 Shera Tiku is the co-founder and CEO of C16 Biosciences.
0:46:32 Today’s show was produced by Gabriel Hunter-Chang, edited by Lydia Jean-Cott, and engineered
0:46:37 by Sarah Brugger.
0:46:40 Please email us at problem@pushkin.fm, tell us how we can make the show better, and we
0:46:46 should interview.
0:46:47 We’re going to take a couple of weeks off, but we’ll be back before too long.
0:46:51 I’m Jacob Goldstein, thanks for listening.
0:46:58 Hey everybody, I’m Kai Rizdal, the host of Marketplace, your daily download on the economy.
0:47:07 Money influences so much of what we do and how we live.
0:47:11 That’s why it’s essential to understand how this economy works.
0:47:15 At Marketplace, we break down everything from inflation and student loans to the future
0:47:18 of AI so that you can understand what it all means for you.
0:47:23 Marketplace is your secret weapon for understanding this economy.
0:47:26 Listen wherever you get your podcasts.
0:47:28 (upbeat music)
Palm oil is a cheap and remarkably versatile vegetable oil. It’s in a ton of products, from food to cosmetics, detergent, and chewing gum. But producing so much palm oil is really bad for the planet. Shara Ticku is the co-founder and CEO of C16 Biosciences. Shara’s problem is this: Can you get yeast to make an oil that is just as useful as palm oil – without clearing land to grow palm trees?
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