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Turning Cells into Tiny Factories · What's Your Problem?

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  Speaker 1: Pushkin. One of the strange things about making a podcast
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  Speaker 1: at pushkin dot fm. That's problem at pushkin dot fm.
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  Speaker 1: Or you can talk to me on Twitter. I'm at
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  Speaker 1: Jacob Goldstein, just my name. To be honest, we don't
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  Speaker 1: talk to me on Twitter. So I can guarantee you
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  Speaker 1: I will personally read every email and Twitter message you
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  Speaker 1: send with gratitude. Thank you. Now here's the show. Here's
• 1:31
  Speaker 1: a big, wild idea what if scientists and engineers could
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  Speaker 1: turn yeast in bacteria into tiny factories that would manufacture
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  Speaker 1: everything from perfume to food to fuel. This idea has
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  Speaker 1: a name synthetic biology. People have been working on it
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  Speaker 1: for more than a decade now, and it's really hard.
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  Speaker 1: First you have to engineer DNA and then you stick
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  Speaker 1: it into yeast or bacteria in order to make the
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  Speaker 1: thing you want, the fragrance or the fuel or the food.
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  Speaker 1: And then you have to figure out how to do
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  Speaker 1: it at scale, how to make a lot of it,
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  Speaker 1: and also you have to make it cheaper or better
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  Speaker 1: than what's already out there. Really, the dream of synthetic
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  Speaker 1: biology is like a whole new industrial revolution, but using
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  Speaker 1: cells instead of machines. I'm Jacob Goldstein and this is
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  Speaker 1: What's Your Problem, the show where entrepreneurs and engineers talk
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  Speaker 1: about the world they're going to build once they solve
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  Speaker 1: a few problems. My guest today is Reshma Shetty. She's
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  Speaker 1: the co founder and chief operations officer of Ginko Bioworks.
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  Speaker 1: It's one of the biggest synthetic biology companies in the world.
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  Speaker 1: One big obvious problem that Ginko faces the company has
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  Speaker 1: lost billions of dollars trying to turn synthetic biology into
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  Speaker 1: a viable business. So the problem for today's show is this,
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  Speaker 1: how do you try and do this big, hard thing
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  Speaker 1: way out there on the scientific frontier and also eventually
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  Speaker 1: make enough money to create a financially sustainable business. We
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  Speaker 1: started our conversation talking about the original idea for Ginko,
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  Speaker 1: which came to Reshma and her co founder when they
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  Speaker 1: were grad students at MIT dreaming about the big things
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  Speaker 1: they wanted to do with synthetic biology. So you start
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  Speaker 1: a company. We did. We did. We started a company
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  Speaker 1: because we worked at a place MT, like most academic institutions,
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  Speaker 1: really focuses on doing new things. Right. Can you invent
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  Speaker 1: something new? Can you discover something new so that you
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  Speaker 1: can publish on it, Right, And that's what academia is
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  Speaker 1: built to do. And that's a really great thing because
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  Speaker 1: we should be discovering new things and we should be
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  Speaker 1: inventing new things. Yeah, but with biology, what we really
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  Speaker 1: felt was holding us back was not just doing something
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  Speaker 1: new or inventing something new. It was could you make
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  Speaker 1: the process of engineering biology faster, cheaper, easier. Yeah. And
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  Speaker 1: what was interesting is that we started working on that
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  Speaker 1: problem during grad school, but it just wasn't very celebrated.
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  Speaker 1: People were like, why do you want to make it
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  Speaker 1: easier for other people to do this? That seems like
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  Speaker 1: a dumb thing. Work on it, right, You're just building tools.
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  Speaker 1: You're not actually doing anything with the tools exactly right.
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  Speaker 1: And so there's a sort of skepticism even at a
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  Speaker 1: place like MT around spending your time tool building. Okay,
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  Speaker 1: And so we decided to start a company, candidly, not
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  Speaker 1: because I wanted to be a founder. I actually didn't
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  Speaker 1: want to be a founder. You know, I had never
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  Speaker 1: dreamt about starting a company before. But we felt that
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  Speaker 1: starting a company was the best way to work on
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  Speaker 1: this problem of how do you make biology easier to engineer?
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  Speaker 1: I read that some of your earliest customers were in
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  Speaker 1: the in the fragrance industry, and I thought going through
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  Speaker 1: that work you did might be a case study to understand,
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  Speaker 1: you know, what the company does and what kind of
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  Speaker 1: problems come up and how you solve those problems. Can
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  Speaker 1: you talk me through that work? Yeah? So when we
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  Speaker 1: first started the company, you know, we didn't have a
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  Speaker 1: particular technology, we didn't have a business model, we didn't
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  Speaker 1: have a way of making money, right, it was a
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  Speaker 1: great way to start a company. I highly recommend. But
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  Speaker 1: what we did have was that we were kind of
• 5:05
  Speaker 1: voracious learners. We kept coming up with wrong hypotheses. Where
• 5:08
  Speaker 1: we finally got some traction was actually looking at the
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  Speaker 1: flavor and fragrance industry. So it turned out that this
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  Speaker 1: is a huge industry. It's a multibillion dollar industry that
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  Speaker 1: almost no one's heard of. I certainly hadn't heard of
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  Speaker 1: it when we started the company. But they make all
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  Speaker 1: of the flavors and fragrances that go into household goods. Right,
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  Speaker 1: So if you go browse the DETERSI denial, you know,
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  Speaker 1: and you can probably smell some of the detergents and
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  Speaker 1: soaps and shampoos and whatnot that are in your local supermarket,
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  Speaker 1: you know, those fragrances are all concocted by the flavor
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  Speaker 1: and fragrance industry. So it turned out that there was
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  Speaker 1: this pain point in the flavor and fragrance industry where
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  Speaker 1: they wanted to use biology to manufacture their ingredients, but
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  Speaker 1: it just you know, it wasn't feasible at scale, and
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  Speaker 1: so they were really interested in using fermentation. This idea
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  Speaker 1: that you could grow yeast in a vat to produce
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  Speaker 1: flavors and fragrances, much like you might brew beer. And
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  Speaker 1: so cracking that nut was our first sort of realization, Hey,
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  Speaker 1: there's actually really a market or engineeredsels that could produce
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  Speaker 1: flavor and fragrance ingredients. Are you allowed to say specifically
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  Speaker 1: what you did or is it like that? So some
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  Speaker 1: of our earliest contracts were around things like peach flavor,
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  Speaker 1: coconut flavor, and so, so what specifically do you do?
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  Speaker 1: I mean, do you take some jeans from a peach
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  Speaker 1: and stick them in a yeast and the yeast makes
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  Speaker 1: peach smell? Is it like that? Yeah, basically, except you're
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  Speaker 1: not just limited to beach, because it turns out that,
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  Speaker 1: you know, biology has a lot of reuse and a
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  Speaker 1: lot of commonality, and so it might be the actually
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  Speaker 1: the best genes for making a peach flavor might not
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  Speaker 1: come from a peach. They might come from another species,
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  Speaker 1: which is kind of fascinating, right, And so you keep
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  Speaker 1: tweaking it and iterating on it until you're making a
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  Speaker 1: lot of your ingredient of interest. And so, right now,
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  Speaker 1: somewhere in the world, is there like a vat full
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  Speaker 1: of yeast, cranking out peach smell that's going to go
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  Speaker 1: into like soap or shampoo or something. There absolutely is, yes,
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  Speaker 1: So where is the company now? What's sort of what
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  Speaker 1: is the state of Ginko now? The span of what
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  Speaker 1: we work on is huge, right, everything from food to health,
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  Speaker 1: to act culture, to flavors and fragrances. So we started
• 7:14
  Speaker 1: a joint venture with Buyer, the largest ad company in
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  Speaker 1: the world, working on essentially a biofertilizer, So being able
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  Speaker 1: to reduce the amount of fertilizer that we need to
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  Speaker 1: grow crops like corn by essentially engineering microbes to provide
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  Speaker 1: the fertilizer to provide the fixed nitrogen rather than fertilizer.
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  Speaker 1: And if you actually look at it, fertilizer is incredibly
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  Speaker 1: bad for the environment. The process by which we make
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  Speaker 1: fertilizer in this world, I don't know, It's like something
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  Speaker 1: like fertilizer is like six or seven percent greenhouse gas emissions.
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  Speaker 1: I mean, it's something completely interesting. So it's the production
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  Speaker 1: of fertilizer emits a lot of carbon dioxide into the atmosphere.
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  Speaker 1: So if you can if you can reduce the need
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  Speaker 1: to make fertilizer then that helps exactly solve the problem. Yeah,
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  Speaker 1: so can you sort of give me a comparison of
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  Speaker 1: the state of the world as it was when you
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  Speaker 1: were in grad school versus the state of the world
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  Speaker 1: that you have created now? In grad school, it probably
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  Speaker 1: take me nine months or so to basically design, build,
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  Speaker 1: and test twenty designs at a time, like twenty different Yeah,
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  Speaker 1: twenty different genes or to many different pathways. Maybe at
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  Speaker 1: a time that was like state of the art. How
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  Speaker 1: long would it take Ginko now to try twenty designs. Well,
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  Speaker 1: we wouldn't ever bother to try twenty designs. We only
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  Speaker 1: try thousands of designs at a time. Okay, It still
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  Speaker 1: takes a lot longer than i'd like. It still probably
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  Speaker 1: takes three months to kind of go through the whole cycle,
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  Speaker 1: maybe two months if we're lucky. So, if before it
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  Speaker 1: was you could try twenty designs in nine months, how
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  Speaker 1: many designs could you try now in two or three months.
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  Speaker 1: Now I'm trying thousands of designs in two or three months.
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  Speaker 1: Thousands Okay, So it's thousands of times faster than it
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  Speaker 1: was when you started. Yeah, and then I can learn
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  Speaker 1: from which ones worked and which ones didn't and even
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  Speaker 1: more intelligently do my next round of thousands of designs.
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  Speaker 1: And so is what you have built sort of like
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  Speaker 1: a factory for testing? Have you built like a factory lab? Yeah,
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  Speaker 1: it's it's essentially a factory for cell programming. What's it
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  Speaker 1: look like. It's a whole bunch of robots sort of
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  Speaker 1: placed in rows across the lab with these essentially train
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  Speaker 1: tracks that can move samples between the different robots, and
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  Speaker 1: so it's pretty cool looking. So like the robots are
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  Speaker 1: like robot arms, and what's going on the train tracks? Yeah,
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  Speaker 1: these these big arms that can basically move plates from
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  Speaker 1: one robot to another and train tracks to be able
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  Speaker 1: to move samples between the robots. To do the processing
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  Speaker 1: steps you need to either read the DNA or write
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  Speaker 1: the DNA, or put the DNA into cells or test
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  Speaker 1: how those cells are performing. So the robots are doing
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  Speaker 1: all of those steps. Yes, that's a dream after the break,
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  Speaker 1: a problem Ginko has not solved yet. How do you
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  Speaker 1: build a company based on this wild, radically new technology
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  Speaker 1: and also make a profit. That's the end of the ads.
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  Speaker 1: Now we're going back to the show. Kinko went public
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  Speaker 1: last year and the company is now worth billions of dollars,
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  Speaker 1: but Reshma and our co founders still haven't made the
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  Speaker 1: company work as a profitable business. They have revenue, but
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  Speaker 1: it doesn't come close to covering their costs, and so
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  Speaker 1: the problem of becoming a profitable company is what we
• 10:44
  Speaker 1: focused on in the second part of the interview. It's
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  Speaker 1: impressive in a way that you know, it's continued to
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  Speaker 1: get funded and you've grown so big, and you have
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  Speaker 1: lost and continued to lose a lot of money. I
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  Speaker 1: feel like in the long run, that's a problem that
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  Speaker 1: you have to solve eventually, Like how do you solve
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  Speaker 1: that problem? So in our business, the way our business
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  Speaker 1: model works is when we collaborate with a customer on
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  Speaker 1: a self program, we get two different kinds of value
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  Speaker 1: out of the relationship. We get fees and milestone payments
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  Speaker 1: from our customers to help offset our dcosts, and we
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  Speaker 1: get what's called downstream value share. Downstream value share typically
• 11:24
  Speaker 1: comes in the form of either royalties on products made
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  Speaker 1: using Ginko organisms or equity stakes in our customers. And
• 11:34
  Speaker 1: we've been expanding a lot in the number of cell
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  Speaker 1: programs that we've taken on, but many of them are
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  Speaker 1: still in the development stage, and so essentially the way
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  Speaker 1: we ultimately become a sustainable business is as more and
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  Speaker 1: more of our cell programs successfully complete and recognize that
• 11:50
  Speaker 1: downstream value share. That's where the rail like ultimate long
• 11:54
  Speaker 1: term value potential of Ginko is. So you're basically saying
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  Speaker 1: when the investments you've already made payoff, that will do it.
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  Speaker 1: I mean, I get the math of what you're saying
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  Speaker 1: is that you've put a lot of money into things,
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  Speaker 1: and if they make a lot of money in the future,
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  Speaker 1: then you will be profitable. Is that right? Yeah? I
• 12:08
  Speaker 1: mean it's like, um, you know, think about it. If
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  Speaker 1: your typical like pharma biotech company, they lose the hundreds
• 12:15
  Speaker 1: of millions of dollars, right, but if the drug works,
• 12:19
  Speaker 1: there's like a big, big enough path at the end
• 12:22
  Speaker 1: to justify that upfront risk. Basically, it's sort of all
• 12:25
  Speaker 1: long shots, right. The drug companies essentially make lots and
• 12:28
  Speaker 1: lots of long shot bets and most of them don't work,
• 12:32
  Speaker 1: and then once in a while they have a huge
• 12:34
  Speaker 1: winner that makes up for all the ones that don't. Exactly,
• 12:37
  Speaker 1: but in our case, we instead of a company that
• 12:41
  Speaker 1: is betting up like typically in pharma or in biopharma,
• 12:45
  Speaker 1: you know, the company might have one bet, right, one
• 12:47
  Speaker 1: long shot bet, or maybe a couple of long shot bets.
• 12:50
  Speaker 1: We're a platform company, so we actually have lots and
• 12:54
  Speaker 1: lots of long, long shot bets, and you know, and honestly,
• 12:57
  Speaker 1: some of them are not going to work, right. You know,
• 12:59
  Speaker 1: some cell programs won't work, or the cell program will work,
• 13:02
  Speaker 1: but it won't commercialize the way we think, or whatnot.
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  Speaker 1: The question is will there be enough winners, and will
• 13:08
  Speaker 1: they be those winners be big enough to justify the
• 13:10
  Speaker 1: whole thing? And we're betting that they will. I recognize
• 13:14
  Speaker 1: that we're sort of at a time will tell ending
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  Speaker 1: of the narrative, and it's valid. It's clearly true. Time
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  Speaker 1: will indeed tell. I'm just trying to think of how
• 13:25
  Speaker 1: to parse it. I mean, I guess another way to
• 13:27
  Speaker 1: think about it is whether and to what extent these
• 13:30
  Speaker 1: various bets will pay off. Let me flip the question
• 13:34
  Speaker 1: on you, right, yeah, please please, Here's the way I
• 13:37
  Speaker 1: look at it. Right, the world has a lot of
• 13:39
  Speaker 1: serious things that it is facing, right, climate change, pandemics,
• 13:44
  Speaker 1: you know, supply chain issues, right, having enough food to
• 13:49
  Speaker 1: feed our planet having enough clean water to provide to
• 13:52
  Speaker 1: our planet. Right to me, the cost of not doing
• 13:56
  Speaker 1: something is unfathomable to me. So I would much rather
• 14:00
  Speaker 1: try and fail at this, which at least has gives
• 14:04
  Speaker 1: us a shot of solving some of these pressing world problems,
• 14:09
  Speaker 1: then not try at all. In a minute, the Lightning Round,
• 14:13
  Speaker 1: where we learned Rashma's favorite micro organism, her least favorite
• 14:17
  Speaker 1: trait in a coworker, and the one piece of advice
• 14:19
  Speaker 1: she'd give to somebody who is trying to solve a
• 14:22
  Speaker 1: hard problem. Now let's get back to what's your problem? Now,
• 14:32
  Speaker 1: it's just the lightning round. Can we do the lightning round? Absolutely?
• 14:35
  Speaker 1: What's your favorite micro organism? E coli? That's what I did.
• 14:38
  Speaker 1: My PhD on tell me why E Coli is great? So.
• 14:43
  Speaker 1: Equali is this little microbe. It's found in every person's gout,
• 14:47
  Speaker 1: smells awful, smells like pooh. Right, it's part of what
• 14:49
  Speaker 1: makes your poo smell like pooh. And we did a
• 14:52
  Speaker 1: project when we were at MIT mentoring a group of
• 14:56
  Speaker 1: undergraduates to change the smell of ecali to smell like
• 14:59
  Speaker 1: weren't a green and bananas. So while Eli gets a
• 15:02
  Speaker 1: bad rap for smelling bad, You can actually reprogramage to
• 15:06
  Speaker 1: smell pretty good. What's your favorite trade and a co worker?
• 15:10
  Speaker 1: Passion and curiosity? What's your least favorite trait in a
• 15:13
  Speaker 1: co worker? Self promotion? If you have a ten minute
• 15:17
  Speaker 1: break in the middle of the day, what do you
• 15:18
  Speaker 1: do to relax? Take a walk through the lapse? What
• 15:22
  Speaker 1: is one piece of advice you would give to somebody
• 15:25
  Speaker 1: who's trying to solve a hard problem? Better to try
• 15:28
  Speaker 1: and fail than not try at all. It sounds trite, right,
• 15:31
  Speaker 1: but you know, the way I could get myself to
• 15:36
  Speaker 1: a place where I felt comfortable, you know, making the
• 15:38
  Speaker 1: leap and starting a company is that, you know, starting
• 15:41
  Speaker 1: a company working on really hard problems, you may or
• 15:44
  Speaker 1: may not succeed, right. You just don't know. It's a crapshoot, right,
• 15:48
  Speaker 1: And so what you want to do is be able
• 15:50
  Speaker 1: to get to yourself to a place where you'll never
• 15:53
  Speaker 1: regret try, right. And the nice thing about hard problems
• 15:56
  Speaker 1: and important problems is that it's very hard to regret
• 15:59
  Speaker 1: working on them. Rash Machete is the co founder and
• 16:07
  Speaker 1: chief operations officer of ging Go Buy Awards. Today's show
• 16:11
  Speaker 1: was produced by Edith Russolo, edited by Robert Smith and
• 16:14
  Speaker 1: engineered by Amanda kay Waugh. Our theme music is by
• 16:18
  Speaker 1: Luis Gara. A huge team of people makes this show possible.
• 16:22
  Speaker 1: This team includes, but is not limited to, Jacob Weisberg, Milobell,
• 16:27
  Speaker 1: Leta Mulad, Justine Lang, Heather Fame, John Schnars, Kry Brody,
• 16:30
  Speaker 1: Carli Nigliori, Christina Sullivan, Jason Gambrel, Grant Hays, Eric Sandler,
• 16:35
  Speaker 1: Maggie Taylor, Morgan Rattner, Nicole Morano, Mary Beth Smith, Royston Baserve,
• 16:39
  Speaker 1: Maya Kanig, Daniella Lakhan, Kazeia Tan and David Clover. What's
• 16:43
  Speaker 1: Your Problem is a co production of Pushkin Industries and iHeartMedia.
• 16:47
  Speaker 1: To find more Pushkin podcasts, listen on the iHeartRadio app,
• 16:51
  Speaker 1: Apple Podcasts, or wherever. I'm Jacob Goldstein and I'll be
• 16:55
  Speaker 1: back next week with another episode of What's Your Problem