Latest / Climate Cowboys / #241 The Biz Model Making eFuels Pencil Out | Joe Rodden (Lydian)

Transcript

#241 The Biz Model Making eFuels Pencil Out | Joe Rodden (Lydian) · Climate Cowboys

0:00
I think it's really important that you understand the
0:02
technology as the CEO.
0:04
It's really important that you don't view it as two silos and
0:07
really treat it as a collaboration.
0:09
SPEAKER_02: You know,
0:09
the main thing was I've always been fascinated in science and
0:12
engineering and the
0:13
SPEAKER_02: ability of science and engineering to improve human lives.
0:17
So I think the two problems really facing eFuels today are
0:21
energy intensity and
0:23
SPEAKER_01: Hey everyone, quick note for you.
0:25
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0:43
SPEAKER_01: Hey everyone,
0:43
SPEAKER_01: welcome back to the Cleantechies podcast,
0:45
SPEAKER_01: the number one podcast for climate tech entrepreneurs.
0:48
SPEAKER_01: I'm Silas Maynard and I will be your host today.
0:50
Even as everybody's going undercover and changing their
0:53
branding and climate tech,
0:55
we will be here each week delivering valuable insights and
0:57
lessons from other
0:58
SPEAKER_01: founders and investors in the space.
1:00
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1:03
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1:20
OK,
1:20
today we are talking about e-fuels with Joe Rodden,
1:23
the CEO and co-founder of Lydian.
1:26
SPEAKER_01: Their URL is lydianlabs.com.
1:29
SPEAKER_01: Not to be confused by Lydian Labs, which is a totally different company.
1:31
SPEAKER_01: So this is Lydian.
1:32
They have an e-fuels technology that takes in CO2 or air and
1:37
water and then uses
1:39
SPEAKER_01: electricity to output aviation fuels.
1:41
SPEAKER_01: That's kind of the very simple version of it.
1:43
You should know they went from initial tech discovery to pilot
1:46
in just over three years.
1:48
SPEAKER_01: So if you want to know how, you're going to have to listen.
1:50
There is a dump truck load of value in this episode,
1:53
especially for any deep tech founders.
1:55
SPEAKER_01: So let's dig in.
2:00
SPEAKER_01: All right.
2:01
SPEAKER_01: Welcome to the show, Joe.
2:01
SPEAKER_01: How are you doing today?
2:02
SPEAKER_02: Good, Silas.
2:03
SPEAKER_02: Thank you again for having me.
2:04
SPEAKER_02: It's great to be here.
2:05
SPEAKER_01: No, absolutely.
2:06
SPEAKER_01: It's our pleasure to have you on.
2:07
I'm at least a big fan of Lydie,
2:09
and I've known about you guys for a little while.
2:10
SPEAKER_01: I don't know if Sommel is or not, but I'm excited to have this.
2:13
SPEAKER_01: So let's start off, I guess.
2:15
Give us just a really brief intro of who you are and what
2:18
you're working on,
2:18
SPEAKER_01: and then we'll go from there.
2:20
SPEAKER_02: Yeah, absolutely.
2:21
SPEAKER_02: So I'm the co-founder and CEO of Lydian.
2:23
We have been,
2:24
my co-founder and I,
2:25
working on the company for about three and a half years now.
2:28
And we are a sustainable aviation fuel company working on a
2:32
power to liquids
2:33
pathway to produce e-fuels or e-saf at radically lower cost
2:38
than alternatives.
2:40
SPEAKER_02: Yeah.
2:40
SPEAKER_02: So that's a little about us.
2:42
SPEAKER_02: My background is more on the finance and business development side.
2:46
SPEAKER_02: My co-founder is a chemical engineer by training.
2:48
SPEAKER_02: So
2:49
SPEAKER_02: and kind of marry those two parts of the business.
2:52
SPEAKER_01: Yeah,
2:52
it's obvious you guys have a little bit of the dynamic duo
2:55
there because you
2:55
mentioned in your very first pitch that we do it radically
2:57
cheaper than other people,
2:58
SPEAKER_01: right?
2:59
SPEAKER_01: Otherwise, we might be looking at a different situation in five years.
3:03
Who is one clean tech or clean techie OG that you would love to
3:06
have dinner with and why?
3:08
SPEAKER_01: Living or dead, by the way?
3:10
SPEAKER_02: Okay.
3:11
SPEAKER_02: You know,
3:11
SPEAKER_02: I think Steve Chu would be an amazing one,
3:15
former Secretary of Energy in the mid-2000s during the
3:19
so-called Clean Tech 1.0.
3:21
SPEAKER_02: He's a literal Nobel Prize winner in physics,
3:24
so a brilliant guy and oversaw DOE at a time during an early
3:29
kind of boom in clean
3:30
SPEAKER_02: tech where we got so many things right,
3:32
SPEAKER_02: but also a lot of things kind of
3:35
SPEAKER_02: very wrong.
3:36
SPEAKER_02: And I think in hindsight,
3:38
it's easy to look back at things like Solyndra and the other
3:41
failures of Cleantech 1.0.
3:42
SPEAKER_02: And I would just love to get Dr.
3:45
SPEAKER_02: Chu's perspective,
3:46
Secretary Chu's perspective on what his viewpoint is in
3:51
hindsight on some of those
3:52
early failures and what we might be getting wrong again today
3:55
and what he's learned
3:56
SPEAKER_02: from everything that he saw over the years.
3:59
SPEAKER_01: Okay.
4:00
SPEAKER_01: Amazing.
4:01
Were you,
4:01
I guess,
4:01
out of curiosity,
4:02
what were you doing during Cleantech 1.0?
4:04
SPEAKER_02: I was in high school during Cleantech 1.0.
4:07
SPEAKER_02: I wasn't doing much thinking about energy at the time,
4:10
although my parents were both working in oil and gas for most
4:14
of my early childhood.
4:15
SPEAKER_02: So I had some connection to the energy industry,
4:18
but mostly I've been a student of that period of history in the
4:22
years since after
4:23
SPEAKER_02: getting into the climate and energy space.
4:26
I love to see it when people are students of the past because
4:29
it helps you avoid
4:30
SPEAKER_01: mistakes in the present,
4:31
SPEAKER_01: right?
4:31
This is often something we see with any founders that end up
4:34
folding in,
4:35
right?
4:35
SPEAKER_01: Like they weren't,
4:36
SPEAKER_01: you know,
4:36
if we look in hindsight with our conversations and they weren't
4:38
as studious of
4:39
SPEAKER_01: those items.
4:40
So I guess one thing I was curious after understanding a bit
4:44
about your background
4:45
SPEAKER_01: is how do you go from being in finance at BlackRock to,
4:48
SPEAKER_01: you know,
4:49
SPEAKER_01: starting an eFields company?
4:50
SPEAKER_01: Give us the journey there.
4:52
SPEAKER_02: Yeah, it's been kind of a windy one.
4:54
SPEAKER_02: I would say I learned something at every step of my career.
4:59
SPEAKER_02: I got an itch to go work at a smaller company pretty early on.
5:02
So BlackRock was a lot of smart people and in many ways a great
5:07
start to my professional career.
5:10
It was pretty clear early on that I wanted to be in a smaller,
5:12
more dynamic environment.
5:14
SPEAKER_02: And so,
5:15
SPEAKER_02: you know,
5:15
SPEAKER_02: I was kind of aching for more agency,
5:17
SPEAKER_02: feeling like I could contribute a little more.
5:20
And so I then moved over to,
5:22
at the time,
5:22
a fintech startup,
5:24
now a public company called Affirm.
5:25
SPEAKER_02: It wasn't necessarily the industry fit I was looking for.
5:29
But it was a pretty natural extension from what I was doing at
5:32
BlackRock and an
5:33
SPEAKER_02: easy jump into a younger company.
5:35
And I think the biggest learning I took away from there is
5:38
seeing firsthand how a small,
5:40
SPEAKER_02: young,
5:41
SPEAKER_02: scrappy company can really reshape an industry under great leadership.
5:44
SPEAKER_02: And I had some really shining examples of that in Max Levchin,
5:48
SPEAKER_02: the former PayPal founder,
5:50
SPEAKER_02: Michael Linford,
5:51
SPEAKER_02: who was the CFO at the time that I worked under.
5:53
But that obsession with climate and energy had kind of always
5:56
been percolating in
5:57
SPEAKER_02: the background.
5:58
SPEAKER_02: And I was really interested in commercializing new technology,
6:01
SPEAKER_02: commercializing new hardware,
6:03
and specifically doing it in the climate space and having an
6:06
impact on that problem.
6:08
SPEAKER_02: So that really came to a head in 2019 or so.
6:11
SPEAKER_02: I decided I had to kind of make a career out of that.
6:15
SPEAKER_02: Cold emailed one of the co-founders of Forum Energy,
6:17
SPEAKER_02: Ted Wiley,
6:18
SPEAKER_02: eventually twisted their arm into hiring me onto their business team,
6:22
SPEAKER_02: ended up working with them for a little shy of two years.
6:25
SPEAKER_02: And again,
6:26
I think they're got some great examples of what really good
6:30
leadership works,
6:30
SPEAKER_02: what looks like with Ted and Mateo Jaramillo,
6:33
SPEAKER_02: the CEO,
6:35
as well as some domain-specific knowledge and I think a really
6:38
high-level view of
6:40
SPEAKER_02: what commercializing a new technology looks like.
6:42
SPEAKER_02: at a cool inflection point for the company.
6:44
SPEAKER_02: So I joined,
6:45
SPEAKER_02: I think,
6:45
SPEAKER_02: when there were about 50,
6:46
SPEAKER_02: 60 people,
6:47
SPEAKER_02: almost entirely on R&D and engineering.
6:50
SPEAKER_02: And by the time I left, they were 400 or so.
6:52
SPEAKER_02: So that was a great experience.
6:56
SPEAKER_02: But again,
6:56
I think the stage and the desire for agency and zero to one
7:02
problems kind of kept
7:04
SPEAKER_02: clawing at me.
7:04
And I really wanted to branch out and do something that was a
7:07
little bit earlier.
7:08
SPEAKER_02: And
7:09
SPEAKER_02: just kind of by luck,
7:10
actually ran into my co-founder when I was living in Boston and
7:15
was immediately
7:16
SPEAKER_02: impressed by what he was doing,
7:18
had become a little bit familiar with the problem of eFuels
7:21
from my time at Forum
7:22
SPEAKER_02: and a couple of other experiences at the time.
7:24
SPEAKER_02: And I think it was just immediately taken by him and the idea,
7:27
the technology he was developing and started working together
7:31
part-time for a few
7:32
months and immediately had a rapport and decided to make it a
7:36
full-time thing.
7:38
How exactly do you go from kind of bumping into somebody with
7:41
amazing technology
7:42
SPEAKER_01: and then actually going to work with them as a commercial person?
7:44
I think there's plenty of people out there who want to be that
7:47
commercial mind that
7:48
SPEAKER_01: goes with the tech mind.
7:49
SPEAKER_01: And from what I've heard,
7:50
the stereotype is always that if you're a technical person and
7:53
you went to Stanford
7:54
SPEAKER_01: or something,
7:54
SPEAKER_01: you got all those business guys coming over your shoulder asking,
7:56
SPEAKER_01: hey,
7:57
SPEAKER_01: can I build a startup with you?
7:58
Yeah,
7:58
you know,
7:59
I think it's really important that you understand the
8:02
technology as the CEO.
8:04
And I think my co-founder Bronco would say that I very much fit
8:09
that bill.
8:09
But it's really important that you don't view it as two silos
8:13
and really treat it
8:13
SPEAKER_02: as a collaboration.
8:15
SPEAKER_02: There was a lot of luck involved.
8:16
SPEAKER_02: I mean,
8:17
I had been looking into electrification of heavy industry from
8:21
the perspective of
8:23
SPEAKER_02: could we find potential buyers for a long duration battery,
8:25
SPEAKER_02: whether that's in steel,
8:26
SPEAKER_02: cement,
8:27
SPEAKER_02: or e-fuels.
8:28
SPEAKER_02: But also from the perspective of CO2 utilization,
8:32
I had done a bit of work with a VC investor on a thesis around
8:35
CO2 utilization and
8:37
SPEAKER_02: So I had a bit of a background in the eFuel space,
8:40
and that kind of helped us establish that rapport quickly
8:43
because Bronco and I were
8:45
able to establish that mutually beneficial relationship where I
8:49
wasn't just a
8:49
SPEAKER_02: business guy trying to do a startup and looking for a tech.
8:52
It was actually an area that I was quite familiar with and
8:56
could contribute some
8:57
SPEAKER_02: market knowledge and get up to speed on the tech quickly.
9:01
I'll note it as a lesson for any of those people who are in the
9:03
commercial seat.
9:04
SPEAKER_01: Don't just pursue a startup for startup's sake.
9:06
SPEAKER_01: Build your own thesis,
9:08
SPEAKER_01: and then if you find somebody who matches,
9:09
then there's going to be that natural fit to go together
9:12
because otherwise you're
9:13
SPEAKER_01: kind of chasing down a broken incentive structure.
9:16
SPEAKER_02: Yeah, it's absolutely true.
9:18
And one thing I'll add there is that I had,
9:20
again,
9:20
a great example at Forum.
9:22
SPEAKER_02: I think they're the best in the business at this.
9:23
SPEAKER_02: And if you listen to the early history of Forum,
9:26
SPEAKER_02: they were actually out raising money,
9:28
SPEAKER_02: exploring long-duration techs before they ever had a chemistry chosen,
9:32
SPEAKER_02: right?
9:32
They were defining the design space,
9:35
what the market looked like,
9:36
and really thinking about...
9:38
SPEAKER_02: not just how to commercialize a cool tech,
9:40
but how to develop technology that was serving a market need
9:43
and really deeply
9:44
SPEAKER_02: understand the systems view.
9:46
SPEAKER_02: And I think taking that into whatever you're doing is really important.
9:51
SPEAKER_01: Yeah, no, no.
9:52
SPEAKER_01: That makes a lot of sense.
9:53
What influences really kind of got you interested in clean
9:57
technology in general?
9:58
SPEAKER_01: You mentioned a little bit about your parents working on oil and gas,
10:00
SPEAKER_01: but just kind of curious,
10:00
SPEAKER_01: like what led you down this path,
10:02
SPEAKER_01: do you think?
10:03
You know that feeling when you meet someone who shares your
10:05
vision for the future?
10:06
SPEAKER_00: It just clicks like two peas in a pod.
10:09
Well,
10:09
that's exactly how we felt when we met Goodwin,
10:12
who we are proud to have as our sponsor.
10:14
Being the first major law firm to set up a climate-specific
10:17
startup and venture
10:18
practice makes them exactly the kind of partner we are excited
10:22
to work with.
10:23
They realize that there are a plethora of challenges to
10:25
building climate tech startups,
10:27
SPEAKER_01: and that's why they have built an entire suite of resources for founders,
10:31
SPEAKER_01: investors,
10:31
SPEAKER_01: and entrepreneurs in the space.
10:33
SPEAKER_01: They even offer several tailored pricing methods.
10:35
SPEAKER_01: And guess what?
10:36
SPEAKER_01: It doesn't matter where you are listening to this.
10:38
Goodwin is a global law firm that you can trust to be your
10:41
partner through it all.
10:42
SPEAKER_01: Yeah,
10:42
SPEAKER_01: I think,
10:43
SPEAKER_01: you know,
10:43
the main thing was I've always been fascinated in science and
10:46
engineering and the
10:47
SPEAKER_00: ability of science and engineering to improve human lives.
11:02
SPEAKER_02: I've always gotten a kick out of hardware and concrete problems.
11:08
SPEAKER_02: My college major,
11:09
I switched back and forth a bunch of times from more of the
11:12
hard applied sciences
11:13
to pure math and back and forth and ultimately realized that I
11:17
had a lot more of a
11:18
SPEAKER_02: passion for applied science and engineering over the pure theoretical.
11:22
SPEAKER_02: Yeah.
11:23
SPEAKER_02: generally have always had a big attraction to hard scientific problems.
11:28
And so the ability to combine that with what I was viewing as
11:33
one of the most
11:33
SPEAKER_02: important challenges and most important problems facing humanity,
11:37
SPEAKER_02: that just so happened to be also kind of what my parents were doing.
11:41
It was kind of a nice nexus of things that I was interested in
11:46
and had a connection to.
11:47
SPEAKER_01: Yeah,
11:47
SPEAKER_01: I find it fascinating the evolution,
11:49
especially of technical people who are really just interested
11:52
in engineering problems,
11:54
SPEAKER_01: kind of gravitating towards the clean tech sector.
11:56
And I don't think it's always because they were motivated by
12:00
the climate change dilemma.
12:01
SPEAKER_01: It's oftentimes just because of technology.
12:04
SPEAKER_01: And it just is fascinating to me to watch,
12:07
SPEAKER_01: like we're seeing in America right now,
12:08
SPEAKER_01: a lot of people still –
12:09
SPEAKER_01: I'm disinterested in this new technology,
12:11
thinking it's just – as the conservatives like to call it a
12:14
green new scam,
12:16
SPEAKER_01: as they refer to it.
12:17
SPEAKER_01: It's kind of a funny name, you've got to admit.
12:18
But the whole point is that people don't recognize that it's
12:21
actually just the new technology.
12:23
We've always been in favor of new technology,
12:25
especially as America and as innovators.
12:28
So it will be interesting to watch over the next 10 years as
12:30
the general public
12:31
SPEAKER_01: realizes what's really going on.
12:34
and and and very much agree and and i think for me personally
12:38
and for a lot of
12:38
people that i know in the space it's it's very much a
12:40
combination of both yes we
12:42
care about the problem but you know equally importantly
12:45
sometimes more importantly
12:46
it's really fun work it's it's we're reshaping an industry one
12:50
of the biggest
12:50
industries in the world that touches every human being out
12:53
there um and so many of
12:55
SPEAKER_02: the things we do in ways that we don't understand
12:57
is being completely reshapen in a way that is exciting and multidisciplinary.
13:03
And there are problems across electrical engineering and
13:06
mechanical engineering and
13:07
physics and chemistry and every other kind of cool discipline
13:11
that you can think of.
13:12
SPEAKER_02: There is a problem to solve and an opportunity,
13:15
SPEAKER_02: you know,
13:15
SPEAKER_02: with potentially big financial outcomes awaiting at the other end.
13:18
SPEAKER_02: So, you know, we're driven by all those things at once.
13:20
And I think that's what makes this industry,
13:22
this sector so exciting to work in.
13:25
You mentioned that during your time at Affirm that you saw how
13:29
new technology with
13:30
SPEAKER_01: good leadership could reshape an industry.
13:32
Can you talk a little bit about the lessons that you learned
13:35
from the time working
13:36
SPEAKER_01: with that leadership team?
13:37
And what were the core things that you've taken forward into
13:40
how you're building Lydian?
13:41
SPEAKER_02: Yeah,
13:42
SPEAKER_02: I think,
13:42
SPEAKER_02: you know,
13:43
it starts with a belief that you can have an impact in an
13:47
industry that's dominated
13:48
SPEAKER_02: by incumbents that are much better capitalized and much more experienced.
13:52
SPEAKER_02: Because I think there's a famous saying,
13:54
SPEAKER_02: which I'm going to mess up,
13:55
but it goes something like nobody has ever accomplished
13:59
anything that they didn't
14:00
SPEAKER_02: initially think was possible,
14:02
SPEAKER_02: right?
14:02
So that's the first step is just having the conviction to know
14:06
that a small team
14:07
SPEAKER_02: can have an impact and can
14:09
approach a problem and change it and solve it in a way that
14:12
even a large company isn't able to.
14:15
And I think it's really that generalism I would actually
14:18
probably stop there.
14:18
That's the biggest thing that I took away from Affirm is
14:21
watching a team have that
14:23
conviction and then relentlessly execute for years in a way
14:27
that has now led to a
14:28
SPEAKER_02: great outcome.
14:30
SPEAKER_01: Yeah.
14:30
SPEAKER_01: And don't let the haters shut you down, right?
14:32
SPEAKER_01: Yeah.
14:33
SPEAKER_01: Yeah, exactly.
14:34
SPEAKER_01: Very good.
14:35
SPEAKER_01: So let's talk more about Lydian's technology.
14:38
SPEAKER_01: Can you just explain again?
14:39
SPEAKER_01: Explain to me like I'm five.
14:40
SPEAKER_01: How does the technology work?
14:42
SPEAKER_01: And we'll go deeper in from there.
14:43
SPEAKER_01: Hey, founders, if you're hiring, I've got a special offer for you.
14:47
SPEAKER_01: For those of you who do not know,
14:48
SPEAKER_01: to pay the bills,
14:49
SPEAKER_01: I run a search firm called Earth Tech Talent.
14:51
SPEAKER_01: That's Earth with no A.
14:53
We specialize in placing top sales and engineering talent at
14:56
early stage clean tech
14:57
SPEAKER_01: startups in the United States.
14:59
SPEAKER_01: And we do it for way, way less than traditional search firms.
15:02
I've actually been working as a recruiter for over five years
15:05
in cleantech and have
15:05
SPEAKER_01: made over 70 placements,
15:07
SPEAKER_01: from the CTO of IPA Power,
15:10
SPEAKER_01: a Blackstone-backed energy developer,
15:12
SPEAKER_01: to most of the founding team at ChargeScape,
15:15
SPEAKER_01: a managed charging software joint venture between Honda,
15:18
SPEAKER_01: Ford,
15:18
SPEAKER_01: BMW,
15:19
SPEAKER_01: and Nissan.
15:20
SPEAKER_01: Early-stage cleantech startups can't afford to not have the right talent,
15:23
but they also cannot afford to use a traditional search firm
15:26
for their recruiting needs.
15:28
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SPEAKER_01: All right, back to the show.
15:58
The technology started with a catalyst innovation that was
16:01
invented by my co-founder Bronco.
16:04
And we've since kind of designed a reactor and a process around
16:08
that to try to
16:09
SPEAKER_02: unlock the benefits of what that catalyst innovation allows.
16:12
SPEAKER_02: And so I think
16:14
The two problems really facing e-fuels today are energy
16:17
intensity and capital intensity.
16:20
SPEAKER_02: That's obvious, right?
16:21
SPEAKER_02: It's capex and opex.
16:23
SPEAKER_02: The energy intensity is really limited by thermodynamics.
16:26
SPEAKER_02: You're not going to get around it.
16:27
SPEAKER_02: You might improve it somewhat,
16:28
but if you're trying to make a fuel out of a feedstock that has
16:31
no embodied energy,
16:33
SPEAKER_02: you're going to have to put in a lot of energy.
16:35
The only thing you can do there is make sure you're using the
16:38
cheapest energy available.
16:39
And what that means is that we need to figure out how to make
16:42
the plant load follow,
16:43
SPEAKER_02: how to make sure that we can monetize the cheapest electrons out there,
16:47
SPEAKER_02: which today are wind and solar and increasingly are wind and solar.
16:52
SPEAKER_02: So that was something that Catalyst Innovation,
16:55
it was very clear from the start that it would be very well
16:58
suited for load following.
16:59
SPEAKER_02: And from there,
17:00
SPEAKER_02: we had to solve the capital intensity problem,
17:03
SPEAKER_02: particularly in the context of where you're trying to operate something
17:06
SPEAKER_02: intermittently and get a fairly low utilization rate.
17:09
SPEAKER_02: It becomes ever more important that your capital is cheap,
17:13
SPEAKER_02: so you're okay running it at a lower utilization rate.
17:16
SPEAKER_02: And so there,
17:17
SPEAKER_02: it's just been one engineering challenge after another,
17:20
SPEAKER_02: but starting from first principles of,
17:23
SPEAKER_02: again,
17:23
doing that system-level modeling and figuring out where does
17:26
the plant need to be
17:27
SPEAKER_02: to deliver a commodity,
17:29
at parity or close to a parity with the underlying commodity of
17:33
fossil kerosene or
17:35
jet and and we have pulled a lot of levers to get there i would
17:39
say the two it
17:40
ultimately comes down to process intensification so your major
17:45
equipment like your
17:46
electrolyzers and your chemical reactors are are a huge
17:50
component of your capital
17:51
SPEAKER_02: cost
17:52
SPEAKER_02: How can you make them as small as possible,
17:54
SPEAKER_02: but also made of cheap materials,
17:56
SPEAKER_02: you know,
17:56
and mass manufactured so that you can make a lot of them and
17:59
bring the cost down?
18:00
SPEAKER_02: And then there's process simplicity.
18:02
There are going to be a lot of components like compressors and
18:05
tanks and land and buildings.
18:08
SPEAKER_02: which you have virtually no ability to bring the cost down of.
18:11
SPEAKER_02: The only thing you can do is eliminate them as much as possible.
18:15
And that is something you can only do if you can squeeze a lot
18:19
of performance out
18:20
SPEAKER_02: of the major equipment,
18:21
SPEAKER_02: the parts that you do own.
18:23
But to the extent that you can't eliminate them,
18:25
you have to make them big.
18:26
SPEAKER_02: You have to make them standardized.
18:28
SPEAKER_02: You have to limit the non-recurring engineering.
18:30
SPEAKER_02: And so there's a lot of work underpinning all of this.
18:33
SPEAKER_02: But ultimately,
18:34
it's combining a first principles approach to technology design
18:38
and leveraging the
18:40
SPEAKER_02: benefits of that catalyst that we originally invented.
18:44
SPEAKER_01: Okay.
18:44
SPEAKER_01: Got it.
18:45
So we're going to back up a little bit and then let's talk
18:46
about how the tech works.
18:48
SPEAKER_01: So is it like,
18:49
SPEAKER_01: give us a basic explanation of what goes in,
18:51
SPEAKER_01: how do you change it and what comes out?
18:53
SPEAKER_01: And then like, who's the end user, at least the conceptualized end user.
18:57
SPEAKER_02: Yeah, absolutely.
18:59
SPEAKER_02: So our inputs into our plant are carbon dioxide and water.
19:03
SPEAKER_02: And we split the water into hydrogen.
19:05
SPEAKER_02: We do that with off-the-shelf technology from electrolyzer manufacturers.
19:09
SPEAKER_02: We don't have an innovation there.
19:11
And then we take that CO2 and hydrogen and we convert that in a
19:14
two-step process to
19:15
SPEAKER_02: a hydrocarbon fuel.
19:17
SPEAKER_02: And we are targeting specifically the jet fuel range,
19:20
SPEAKER_02: which tends to be about eight to 16 carbon atoms,
19:23
SPEAKER_02: give or take.
19:24
SPEAKER_02: And that fuel that we end up with
19:27
SPEAKER_02: is a drop-in alternative for the airplanes that we have today.
19:29
So it really is almost molecularly identical and close enough
19:34
that you can use it
19:35
SPEAKER_02: in an airplane as a drop-in fuel.
19:36
SPEAKER_01: Okay.
19:37
SPEAKER_01: And then,
19:38
SPEAKER_01: so going back to what you said previously,
19:40
SPEAKER_01: you're talking about doing this in a way that is,
19:42
SPEAKER_01: what do you say,
19:43
SPEAKER_01: like you drop off a container and this stuff is there.
19:46
SPEAKER_01: You don't have to build a huge plant.
19:48
SPEAKER_01: It's more flexible that way.
19:49
SPEAKER_01: Is that accurate?
19:50
SPEAKER_01: Yeah.
19:50
I mean,
19:51
our plants will need to be fairly sizable in order to have good
19:55
unit economics.
19:56
SPEAKER_02: But,
19:56
SPEAKER_02: you know,
19:57
there is kind of an art to designing the major equipment in a
20:00
way that can be
20:01
quickly installed and that can be numbered up instead of scaled vertically.
20:04
SPEAKER_02: And that allows us to eliminate risk early on, right?
20:07
So we'll actually do a demonstration project in the next two
20:10
years that we expect
20:11
SPEAKER_02: to be the largest kind of individual reactor that we ever build.
20:16
And that timeline is something that is not feasible for a lot
20:20
of new technologies
20:21
SPEAKER_02: if they're kind of just scaling vertically.
20:23
And then so is there a component here that is you have a lot
20:26
more location flexibility,
20:28
SPEAKER_01: which allows you to get closer to cheap energy?
20:30
SPEAKER_01: Is that accurate?
20:31
SPEAKER_02: Yeah, I think that's a great way to put it.
20:33
I think locational flexibility is ultimately going to be
20:36
constrained by those inputs,
20:37
SPEAKER_02: so water and CO2.
20:39
SPEAKER_02: At the limit, we might be able to pull CO2 out of the air.
20:42
SPEAKER_02: Again,
20:42
SPEAKER_02: that's not a piece of the technology that we own,
20:45
but a lot of people are working on that and continue to make improvements.
20:49
SPEAKER_02: In the near term, we'll get CO2 from an industrial point source.
20:52
SPEAKER_02: And there are a lot of those around the world.
20:54
So we can co-locate or we can locate very close to one and
20:57
deliver that CO2 ideally
20:59
SPEAKER_02: via pipeline,
21:00
SPEAKER_02: but potentially via other means as well.
21:02
So being able to operate intermittently does allow a lot of
21:06
locational flexibility.
21:07
And being able to deploy the plant in a standardized module
21:11
with limited recurring
21:12
SPEAKER_02: engineering allows us to do that really quickly.
21:15
SPEAKER_02: So, yeah, there are a lot of benefits to the siting as well.
21:18
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21:21
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21:23
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21:25
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21:27
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21:30
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21:58
SPEAKER_01: Thanks for helping all the climate tech entrepreneurs like you.
22:01
SPEAKER_01: Yeah.
22:02
So just to make sure we tap into this a little bit more,
22:04
you said two different things.
22:06
SPEAKER_01: So you said load follow and then intermittent usage.
22:09
So can you explain to people what that means when you say that
22:11
you don't have to like,
22:12
is it basically you don't have to always be on like other
22:14
plants would be?
22:15
SPEAKER_02: That's exactly right.
22:16
The conventional way that a chemical plant is designed is to
22:20
run pretty much at full capacity.
22:22
SPEAKER_02: I mean, they might have some operational flexibility, but
22:25
SPEAKER_02: Typically,
22:25
you have an energetic feedstock coming in that could be a crude
22:29
oil or a methane or
22:30
SPEAKER_02: something else,
22:31
SPEAKER_02: a coal.
22:32
SPEAKER_02: And the challenge has historically been,
22:35
let's make this plant complex and squeeze the most yield as
22:38
possible out of this feedstock,
22:39
SPEAKER_02: which tends to dominate the overall cost.
22:43
SPEAKER_02: So they're long-lived assets.
22:44
They're built to last for 50 years or more,
22:46
and they're designed to operate continuously.
22:49
SPEAKER_02: What we do is...
22:51
you know think about at a high level really our problem is
22:54
trying to replace a very
22:55
cheap commodity uh crude oil with a commodity that historically
22:59
has been more
23:00
expensive electrons and that's ultimately what we're doing and
23:03
we're also adding
23:04
capex for that conversion step so we need to make sure the
23:07
electrons we're using
23:08
are as cheap as possible and really solving that challenge is
23:11
the only way that we
23:13
SPEAKER_02: can get anywhere close to the you know the underlying commodity price
23:17
And again,
23:18
today,
23:18
wind and solar are by far the cheapest electrons we have and
23:22
have ever had.
23:23
SPEAKER_02: They're not available around the clock.
23:25
SPEAKER_02: They'll never be available around the clock.
23:26
SPEAKER_02: And we can store them in batteries,
23:29
SPEAKER_02: but that adds cost,
23:30
SPEAKER_02: which a lot of different applications can bear that cost.
23:33
SPEAKER_02: Computing can bear that cost, heating and cooling, vehicle charging.
23:37
SPEAKER_02: Making a commodity hydrocarbon can't bear that cost.
23:40
SPEAKER_02: You really need to go to those very, very cheap electrons.
23:43
SPEAKER_01: Got it.
23:43
So you're able to take advantage of when there's excess energy
23:47
on the grid,
23:47
SPEAKER_01: it's very cheap,
23:48
SPEAKER_01: and they need somewhere to put it anyway,
23:50
SPEAKER_01: so you can build a plant there.
23:52
SPEAKER_01: Does that mean,
23:52
SPEAKER_01: I mean,
23:53
SPEAKER_01: maybe not now,
23:54
SPEAKER_01: but in the future,
23:55
you plan to partner with the energy developers directly who may
23:58
need to figure out
23:59
SPEAKER_01: a way to get rid of the excess energy?
24:01
SPEAKER_01: Because I know that there's been Bitcoin mining operations or data center
24:04
operations that have done kind of something similar to absorb
24:07
the excess load.
24:08
SPEAKER_02: Yeah, those are conversations that we're having, absolutely.
24:12
SPEAKER_02: And we're able to do that in a few different ways.
24:15
SPEAKER_02: I mean,
24:16
we can co-locate with a renewable energy project and take a
24:19
portion of their load
24:21
in a flexible way that allows them to sell a different profile
24:24
that's more valuable
24:24
SPEAKER_02: back to the grid.
24:26
We can procure that power virtually and operate in a way that
24:30
adds value to the
24:31
SPEAKER_02: grid operator itself,
24:32
SPEAKER_02: not just to a single renewable energy developer.
24:35
SPEAKER_02: But yeah, that's absolutely part of the strategy.
24:37
SPEAKER_02: And I think Bitcoin mining has been an early model for this.
24:41
SPEAKER_02: There are other models.
24:42
There are a couple of aluminum smelters,
24:44
one in New Zealand that is operating this way.
24:47
SPEAKER_02: So yeah, that's very much a part of how we'll deploy.
24:50
SPEAKER_01: Interesting.
24:50
And so this is this the kind of the key difference that you
24:54
guys have versus other
24:55
SPEAKER_01: companies who have tried to do something like this?
24:57
SPEAKER_02: I think it's definitely one of the key differences.
25:00
SPEAKER_02: And we always say that when you're trying to operate in this way,
25:03
SPEAKER_02: there is a technical component.
25:04
SPEAKER_02: So you need to make the plant technically capable of load following.
25:08
SPEAKER_02: And again, that's a non-trivial thing to do for a chemical process.
25:12
SPEAKER_02: Upsets can deactivate catalysts.
25:14
They can cause fouling of major equipment and just generally
25:18
other problems that
25:20
SPEAKER_02: most chemical plants don't want to deal with.
25:22
There's a lot of engineering and IP that goes into unlocking
25:26
that technical capability,
25:27
but there's also an economic aspect there where you have to
25:31
realize that even if
25:33
SPEAKER_02: your plant is capable of operating flexibly,
25:35
SPEAKER_02: if you make it too expensive...
25:37
You're not going to want to do that because the kind of the
25:40
economic signal,
25:41
SPEAKER_02: the equation,
25:41
SPEAKER_02: you're trying to pay it back.
25:42
You're trying to get capital amortization ultimately starts to
25:46
dominate your cost
25:47
equation more than the OPEX in a way that would make you more
25:51
willing to pay for
25:52
SPEAKER_02: more expensive electricity.
25:53
SPEAKER_02: And that's what we see in computing and data centers, right?
25:56
Flexibility is not that hard for certain computing applications,
26:00
Bitcoin being a great example.
26:02
SPEAKER_02: But the value of the so-called watt-bit spread,
26:06
SPEAKER_02: typically,
26:07
SPEAKER_02: and the cost of those plants,
26:08
SPEAKER_02: by the way,
26:09
SPEAKER_02: data centers are billions of dollars,
26:11
SPEAKER_02: dictates that they tend to prefer to run continuously.
26:14
SPEAKER_01: Continuously.
26:15
SPEAKER_01: So being from a finance background,
26:17
does the model you have where you're not going to be running continuously,
26:21
SPEAKER_01: but because it's cheaper to produce these things,
26:25
SPEAKER_01: these plants,
26:26
it still will pencil out from a private equity perspective
26:28
eventually coming in
26:29
SPEAKER_01: once the tech has proven?
26:30
Because that's the dream that everybody's trying to get to is
26:32
we need to get
26:33
reliable enough income so that private equity can dump billions
26:37
of dollars in
26:37
SPEAKER_01: rather than several hundred million dollars in here and there.
26:40
SPEAKER_02: Yep.
26:41
And there are many things that we have to creatively do to make
26:44
sure that the model
26:44
SPEAKER_02: is financeable in that way.
26:46
SPEAKER_02: And the reliability of the output in the cashflow streams is one of them.
26:50
SPEAKER_02: But the short answer is yes.
26:51
SPEAKER_02: And in fact,
26:52
our plans are designed to operate not just in a way that's
26:55
profitable with intermittency,
26:57
SPEAKER_02: but actually to be optimally profitable with intermittent operation.
27:02
SPEAKER_01: I see.
27:02
SPEAKER_02: I see.
27:03
Meaning they're cheap enough that we actually prefer to turn
27:06
down in many hours of
27:08
SPEAKER_02: the year and avoid the high priced hours.
27:10
SPEAKER_01: Yeah.
27:10
SPEAKER_01: Okay.
27:11
SPEAKER_01: And then, so how do you make money?
27:13
SPEAKER_01: Like,
27:13
SPEAKER_01: are you,
27:13
SPEAKER_01: is the objective,
27:14
SPEAKER_01: I mean,
27:14
SPEAKER_01: maybe you're working on the financial model still,
27:16
SPEAKER_01: cause some people have multiple options,
27:17
SPEAKER_01: but is the objective just,
27:19
SPEAKER_01: Hey,
27:19
SPEAKER_01: we're going to produce,
27:19
we're going to be a field producer and we're going to sell to
27:21
the airlines.
27:22
SPEAKER_01: Are you partnering with other people?
27:23
SPEAKER_01: Like how, how do you, what's your guys' model currently?
27:27
Yeah,
27:27
there are multiple options for us as well,
27:29
and we're going down the route of both.
27:30
SPEAKER_02: Really two high-level ways we can make money.
27:32
SPEAKER_02: One is to develop and operate our own projects and to sell fuel.
27:36
SPEAKER_02: And we can sell fuel directly to the airlines.
27:38
SPEAKER_02: We can do it through an intermediate, like a fuel supplier.
27:41
SPEAKER_02: And then the second model is to sell technology.
27:44
SPEAKER_02: So we can either license a technology package,
27:47
we can be an OEM and actually sell the equipment to renewable
27:51
energy developers who
27:52
SPEAKER_02: are interested in developing e-fuel projects.
27:55
We will kind of lean toward the first model in the early days
27:58
as we seek to prove
28:00
out the technology and kind of focus on owning and operating
28:04
the first-of-a-kind plant.
28:06
SPEAKER_02: And then we may shift over time into more of a hybrid model.
28:10
SPEAKER_01: Because it's common that if you're going to do a licensing model,
28:12
SPEAKER_01: you have to be able to provide certain guarantees,
28:15
SPEAKER_01: which only comes if you've operated for a period of time.
28:17
SPEAKER_01: Is that correct?
28:18
SPEAKER_02: Yeah, that's exactly right.
28:19
SPEAKER_02: Typically,
28:21
there's often no way around having to prove out the first
28:24
instantiation of the
28:25
SPEAKER_02: product on your own with your own capital,
28:27
SPEAKER_02: underwriting your own risk.
28:29
SPEAKER_02: There are also benefits to doing that, right?
28:31
SPEAKER_02: We can learn how the system operates,
28:32
SPEAKER_02: what works,
28:33
SPEAKER_02: what doesn't,
28:34
and perfect the product over time before we go out to the
28:37
market and try to license it.
28:39
yeah so another big thing i hear i'm trying to understand is
28:42
what what existing
28:44
value chains do you or supply chains do you plug into because
28:47
oftentimes if you
28:48
have to rebuild the entire thing when you're trying to build a
28:51
new technology it's
28:51
difficult but if there's kind of certain behaviors or existing
28:54
infrastructure you
28:55
can just make an innovation that's going to you know not piss
28:58
too many people off
28:59
and benefit your customers and you can pop in there is that
29:01
what you guys have done
29:02
SPEAKER_01: it because it sounds like
29:03
SPEAKER_01: a lot of your hardware you say is off the shelf,
29:05
SPEAKER_01: and it sounds like there's probably a distributor,
29:07
SPEAKER_01: like distribution kind of network.
29:08
SPEAKER_01: Tell us more about that.
29:09
SPEAKER_02: Yeah.
29:10
SPEAKER_02: So on the product side,
29:11
SPEAKER_02: I mean,
29:12
the goal of making a drop-in commodity is something that I've
29:18
always been kind of
29:19
SPEAKER_02: really interested in.
29:20
SPEAKER_02: I've heard some people describe this as
29:23
SPEAKER_02: If you build it, they will come risk.
29:25
SPEAKER_02: So if you make a jet fuel, you've got a buyer for it.
29:27
SPEAKER_02: It can go in existing pipelines.
29:29
SPEAKER_02: It can go in existing airplanes.
29:31
You don't have to worry about setting up those supply chains
29:33
from scratch.
29:34
SPEAKER_02: On the actual build and fabrication of our technology,
29:37
there are some supply chains that we are going to have to spin
29:40
up and manufacture
29:41
SPEAKER_02: our own parts.
29:41
SPEAKER_02: There are
29:42
SPEAKER_02: specialized materials and technologies.
29:44
Ultimately,
29:45
we've solved for things that have a really low cost entitlement.
29:49
SPEAKER_02: So they're based on non-precious materials,
29:51
SPEAKER_02: things that we have a lot of,
29:53
but that doesn't necessarily mean that we're using things that
29:56
are off the shelf or
29:57
SPEAKER_02: mass manufactured today.
29:58
SPEAKER_02: We try to do that wherever possible,
30:00
but ultimately it's a new technology and a lot of the things
30:04
that we're doing are
30:04
completely new and we will have to spin up manufacturing lines
30:08
to make that a
30:09
SPEAKER_02: reality at scale.
30:11
SPEAKER_01: Yeah, no, that's helpful.
30:12
SPEAKER_01: So I might be putting words in your mouth here,
30:14
but I'm just trying to think through the logical conclusion of
30:16
if this works,
30:17
if you guys continue to build this and we see the continued
30:20
trend of this idea of
30:22
SPEAKER_01: energy abundance.
30:23
SPEAKER_01: If we can build lots of renewables,
30:25
SPEAKER_01: hypothetically,
30:25
SPEAKER_01: we have unlimited electricity to produce things like this fuel.
30:31
SPEAKER_01: I mean,
30:32
SPEAKER_01: is it basically,
30:32
SPEAKER_01: is it safe to say that,
30:33
SPEAKER_01: you know,
30:34
SPEAKER_01: just if we,
30:34
SPEAKER_01: for the average person who may not quite get this,
30:36
like you look forward in however many years and you can see
30:39
that we're able to
30:40
produce the fuels that we use to fly around the world out of
30:43
just air and water.
30:45
SPEAKER_01: And we have all this extra electricity just everywhere.
30:48
SPEAKER_01: And so even flying,
30:50
we don't have to feel guilty about it because the CO2 that's
30:52
going to come out is
30:53
SPEAKER_01: basically coming right back into the value chain.
30:54
SPEAKER_01: Is that like a fair assessment of what you're,
30:56
SPEAKER_01: what you're hoping to achieve with the vision and impact here?
30:59
SPEAKER_02: Yeah, that's exactly right.
31:01
SPEAKER_02: And we think it'll be part of the solution.
31:03
SPEAKER_02: There is space for others.
31:04
Eventually,
31:05
you know,
31:06
short haul aircraft,
31:07
regional aircraft might go to batteries.
31:09
SPEAKER_02: Over time, that might even extend to medium.
31:11
It's very hard to envision that going to long haul aircraft
31:15
anytime in the next year.
31:17
SPEAKER_02: 50 years, probably longer, but you never know.
31:19
And you have biofuels as another solution and biofuels have
31:22
their drawbacks,
31:23
SPEAKER_02: but in certain contexts,
31:25
they can be pretty cost effective and they're made out of a non-anthropogenic,
31:30
SPEAKER_02: non-fossil CO2 source or carbon source,
31:33
SPEAKER_02: I should say,
31:33
SPEAKER_02: that does have some climate benefits.
31:35
SPEAKER_02: So combine those pieces all together.
31:37
SPEAKER_02: And yeah, the vision here is
31:39
SPEAKER_02: We need to stop global warming.
31:41
That means we need to have no kind of net flux of fossil CO2
31:45
being increased in the atmosphere.
31:48
SPEAKER_02: And yeah,
31:49
so the vision here is to really penetrate all the way into
31:51
aviation and make sure
31:53
SPEAKER_02: that we can do that in a sustainable way.
31:55
SPEAKER_01: Yeah, I mean, this has got the hair on my arm standing up.
31:58
SPEAKER_01: It's an amazing vision.
31:59
I think if anybody was a little bit down on things happening in
32:02
climate right now,
32:03
don't be because you can go work for Joe and you're going to
32:04
change the world.
32:05
So I'm sure you guys,
32:06
I'm sure you guys will be hiring in the near future.
32:07
I don't know when this is coming out exactly,
32:09
but definitely take a look at their careers page.
32:11
SPEAKER_02: Yeah.
32:12
SPEAKER_02: Take a look at our careers page.
32:13
SPEAKER_02: And I'll also just add one more point that,
32:16
SPEAKER_02: you know,
32:16
SPEAKER_02: we've got a lot of folks on our team that are,
32:19
SPEAKER_02: I'd say,
32:19
SPEAKER_02: avgeeks,
32:20
SPEAKER_02: like really interested in the power of aviation to
32:23
SPEAKER_02: connect people, to drive new industry, to drive new economy.
32:26
SPEAKER_02: And I think it's really important to bring up that still today,
32:29
SPEAKER_02: despite the fairly sizable impact that aviation has on the climate,
32:33
a very small portion of the population is actually flying and
32:36
can afford to fly today.
32:38
And that's part of our mission is to really make sure that we
32:40
have a sustainable
32:41
solution out there to not just to decarbonize the aviation that
32:44
we have today,
32:45
SPEAKER_02: but to expand access to that aviation over time.
32:48
SPEAKER_01: Yeah,
32:48
SPEAKER_01: I think – I didn't plan to talk about this,
32:50
but I think it's interesting in the people who are kind of like
32:55
accelerate
32:55
SPEAKER_01: everything versus we have to slow down.
32:57
SPEAKER_01: We have to reduce our usage of everything.
32:59
SPEAKER_01: I don't think that – first of all, we're going to cut back on everything.
33:03
SPEAKER_01: Yes, I understand it's needed, but it's not extremely exciting.
33:07
SPEAKER_01: Versus when you're saying,
33:08
SPEAKER_01: hey,
33:08
SPEAKER_01: we've got all this abundance,
33:09
SPEAKER_01: especially in these more developed countries,
33:11
SPEAKER_01: wealthier countries.
33:12
We should be focused on finding ways to get to this point of
33:16
total abundance where
33:17
I don't care if I leave my lights on because electricity is so
33:19
cheap and the sun – well,
33:21
SPEAKER_01: not in Wisconsin,
33:21
SPEAKER_01: but the sun is always shining somewhere,
33:23
SPEAKER_01: right?
33:24
SPEAKER_01: And I don't have to worry about it.
33:25
And then we can,
33:26
like you said,
33:26
eventually massively reduce the cost of flying –
33:29
SPEAKER_01: hypothetically.
33:30
SPEAKER_01: Right.
33:30
SPEAKER_01: And I just,
33:31
I don't know if you have any takes on this kind of
33:33
accelerationist movement,
33:34
but I know that a lot of climate people have kind of debated
33:36
whether or not this is
33:37
SPEAKER_01: the right thing,
33:38
SPEAKER_01: but it feels like you're in the camp of,
33:39
SPEAKER_01: you know,
33:40
SPEAKER_01: if we didn't,
33:40
SPEAKER_01: if we weren't working on,
33:41
SPEAKER_01: you know,
33:42
SPEAKER_01: having this abundance future,
33:43
SPEAKER_01: we wouldn't be able to,
33:44
SPEAKER_01: you know,
33:44
SPEAKER_01: we wouldn't be funding these things.
33:45
SPEAKER_02: Yeah,
33:45
SPEAKER_02: I mean,
33:46
thinking about a future without abundance is not a very nice
33:49
future to think about.
33:50
SPEAKER_02: And I think many times people underestimate,
33:53
SPEAKER_02: I think,
33:54
the negative impacts that would come with not having that
33:57
abundance and positive
33:58
parts of their lives that they may not realize come from having
34:03
that abundance and
34:04
SPEAKER_02: having had that abundance historically provided by fossil fuels is the
34:08
SPEAKER_02: uncomfortable truth that we have to contend with.
34:11
now everything has to be done within limits right there there's
34:14
a real economic
34:15
cost to climate change and to the world warming and we know
34:19
that and and you know
34:20
there is there's a pretty big range of uncertainty on what the
34:23
quote-unquote social
34:24
cost of carbon is but it's very clear that it's real that it's
34:28
not priced in and
34:29
that the more co2 we emit that's economic costs down the road
34:33
and and so we have to
34:35
SPEAKER_02: do things we have to you know
34:36
SPEAKER_02: seek abundance and accelerate.
34:38
SPEAKER_02: But we have to realize that there is a cost to doing that.
34:41
And if we don't address it,
34:43
it's going to be more expensive the longer we wait.
34:46
SPEAKER_01: Yeah, absolutely.
34:46
SPEAKER_01: I appreciate that thought.
34:48
SPEAKER_01: So recently you guys also had a successful pilot project.
34:51
I would like to know a little bit more about this because my
34:53
understanding from a
34:54
little bit of prep on this is that you have successfully done
34:58
this in three years,
35:00
SPEAKER_01: I think from tech to pilot.
35:01
SPEAKER_01: So can you just talk about how you do that?
35:03
SPEAKER_01: Because if that's the right numbers, that is wild, right?
35:06
SPEAKER_01: Nobody does things that fast.
35:07
Yeah,
35:08
it's about three years from when Bronco started working on the idea.
35:12
SPEAKER_02: And at the time,
35:13
SPEAKER_02: he was still kind of doing some other work on the side,
35:16
SPEAKER_02: and this was a bit of a side project.
35:19
And it's really more like two years and three months from when
35:22
we first got
35:22
SPEAKER_02: LabSpace and made our first hire and started working on this in earnest.
35:27
So I think number one kind of factor there has been Bronco and
35:32
the team and just
35:33
SPEAKER_02: the amazing pace and performance
35:36
SPEAKER_02: intelligence and drive that they move with.
35:39
SPEAKER_02: But also on,
35:40
SPEAKER_02: I think,
35:41
SPEAKER_02: the design from first principles that we talked about,
35:43
SPEAKER_02: realizing that the system had to be really simple and really cheap.
35:48
We realized very early on that you don't start with this huge
35:51
complex system with
35:51
SPEAKER_02: bells and whistles and just wait for it to get better over time.
35:55
SPEAKER_02: It's not going to work out that way.
35:57
SPEAKER_02: In fact, if anything, it goes the other direction.
35:59
SPEAKER_02: Complexity is forced on you as you scale up and uncover new problems.
36:03
SPEAKER_02: So if you don't begin with something that is incredibly simple,
36:06
SPEAKER_02: you really have very little chance of scaling up and commercializing.
36:10
And I think that's the second point that allowed us to do this
36:13
was we designed for
36:15
SPEAKER_02: radical simplicity and low cost from the start.
36:17
And that allowed us to deploy pretty cheaply and pretty quickly
36:21
at a scale that has
36:22
SPEAKER_02: taken other folks a lot longer.
36:24
SPEAKER_01: No, that's definitely got to be a clipped moment right there.
36:27
That's something all founders who are trying to build deep tech
36:30
or hard tech of any
36:30
SPEAKER_01: sort should really,
36:31
SPEAKER_01: really think deeply about.
36:32
SPEAKER_01: No pun intended.
36:33
SPEAKER_01: Okay.
36:34
SPEAKER_01: So let's shift into trends a little bit.
36:35
SPEAKER_01: So first thing I want to,
36:37
SPEAKER_01: I guess,
36:37
SPEAKER_01: talk about is broadly speaking,
36:39
SPEAKER_01: how do you view the e-fuel space?
36:41
SPEAKER_01: Obviously you guys are building in it,
36:42
SPEAKER_01: so I'm assuming you're somewhat bullish,
36:43
SPEAKER_01: but what is it like right now in the atmosphere out there?
36:46
SPEAKER_01: Are people still looking to pay a premium for this?
36:48
Because I had understanding that there wasn't a lot of demand,
36:51
but not enough supply.
36:52
SPEAKER_01: So just tell us more about what's going on there.
36:54
SPEAKER_02: I think the biggest learning that I've taken away from
36:57
Cleantech 1.0 and Solyndra in particular is the cure for high
37:01
prices is high prices,
37:03
right?
37:03
SPEAKER_02: There is a voluntary credit market for sustainable fuel production.
37:07
SPEAKER_02: It's pretty early.
37:08
SPEAKER_02: There are a couple of groups here in the US working on that.
37:11
I think the pilot demonstration on the technology side is a big
37:15
one and it really
37:16
SPEAKER_02: serves as the first major proof point for
37:21
SPEAKER_01: Hey guys, this is the end of the free version of the episode.
37:23
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37:47
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