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Making Palm Oil Without Palm Trees · What's Your Problem?

0:15
Speaker 1: Pushkin. Palm Oil is vegetable oil made from palm trees,
0:24
Speaker 1: and it's hiding in a ton of the stuff we
0:26
Speaker 1: use every single day. Palm Oil is in chips, it's
0:30
Speaker 1: in crackers, cookies, peanut butter. It's also in soap, it's
0:35
Speaker 1: in shampoo, it's in detergent. Palm oil is in lotion,
0:39
Speaker 1: it's in lipstick. And you can't even tell by looking
0:44
Speaker 1: at the list of ingredients whether a thing you're holding
0:46
Speaker 1: in your hand has palm oil in it, because it
0:49
Speaker 1: might be listed as vegetable oil, or as spheric acid,
0:53
Speaker 1: or as sodium laurel sulfate, or as lots of other things.
0:57
Speaker 1: Palm Oil is in so many things because it is very,
1:01
Speaker 1: very useful, but also growing all the palm trees to
1:05
Speaker 1: make all this palm oil turns out to be really,
1:09
Speaker 1: really bad for the planet. So it would be great
1:13
Speaker 1: if somebody could come up with a cheap, scalable way
1:16
Speaker 1: to get palm oil without palm trees. I'm Jacob Oldstein,
1:25
Speaker 1: and this is what's your problem. My guest today is
1:28
Speaker 1: Shaa Tku. She's the co founder of C sixteen Biosciences.
1:32
Speaker 1: Shaa's problem is this, can you get yeast to make
1:36
Speaker 1: a molecule that does basically all the good stuff that
1:39
Speaker 1: palm oil does, so that you can get what is
1:42
Speaker 1: basically palm oil without palm trees. Why is palm oil
1:50
Speaker 1: so great.
1:52
Speaker 2: It's really good at what it does, and it does
1:54
Speaker 2: a lot of things. So palm oil is a is
1:58
Speaker 2: an oil, is a vegetable oil, and oils and fats
2:02
Speaker 2: show up in a lot of products. They show up
2:05
Speaker 2: in food, they show up in cleaning products, they show
2:07
Speaker 2: up even in biodiesel and sustainable aviation fuel and lubricants,
2:13
Speaker 2: and palm oil is the most popular among them because
2:17
Speaker 2: it can do the most things, so it really drives performance.
2:22
Speaker 2: In things like soap. It is the molecule responsible for
2:27
Speaker 2: foaming and cleansing, which is exactly what you want a
2:29
Speaker 2: soap to do. And in things like peanut butter, the
2:33
Speaker 2: profile of palm oil is the reason that your peanut
2:37
Speaker 2: butter stays together with a really smooth, spoonable emulsion, and
2:42
Speaker 2: if you take it out, you have that layer of
2:44
Speaker 2: oil separation. So it's really it's about function and performance
2:49
Speaker 2: across a very wide range of consumer goods, and no
2:53
Speaker 2: other vegetable oil has the same profile that can drive
2:58
Speaker 2: those performance properties. And so even if a company wanted
3:03
Speaker 2: to replace palm oil in their products, they really haven't
3:07
Speaker 2: been able to because they end up having to sacrifice performance,
3:11
Speaker 2: and nobody wants to sacrifice performance.
3:14
Speaker 1: Why is palm oil bad.
3:17
Speaker 2: The only problem with palm oil is the way that
3:20
Speaker 2: it's produced, and the way that is produced primarily today
3:24
Speaker 2: is by converting land. The tree it really thrives in
3:30
Speaker 2: about a five to ten degree range around the equator.
3:33
Speaker 2: That land right around the equator is typically primary forest
3:37
Speaker 2: tropical rainforest, which is some of the most biodiverse precious
3:43
Speaker 2: land on Earth. Their carbon sinks. Thousands of animal species
3:47
Speaker 2: call these home, and palm growers over the past few
3:51
Speaker 2: decades have really been moving to clear that land. They
3:55
Speaker 2: slash and burn it, which emits tons of carbon dioxide
4:00
Speaker 2: into the air. They clear the land and they convert
4:02
Speaker 2: it to these single crop palm oil plantations, and so
4:07
Speaker 2: the main impacts are carbon dioxide emissions. The palm oil
4:11
Speaker 2: industry is responsible for about two percent of global greenhouse
4:15
Speaker 2: gas emissions, which is more than the entire global aviation
4:19
Speaker 2: sector just this one crop. It has an impact on
4:23
Speaker 2: land use, which is converting this sort of precious biodiverse
4:27
Speaker 2: rainforest into monoculture where other things can't grow, the impact
4:32
Speaker 2: on wildlife, and then I would say, last, but not least,
4:35
Speaker 2: or sort of the impact on the humans that live there,
4:38
Speaker 2: which is it pollutes the air and the water streams.
4:41
Speaker 2: But it also puts lots of people out of their
4:44
Speaker 2: home and forced into lowage, very hard labor conditions.
4:49
Speaker 1: So okay, so that's the broader context. You personally, as
4:53
Speaker 1: I understand it, got into the palm oil or alternative
4:57
Speaker 1: palm oil business more or less when you were in
5:00
Speaker 1: business school, right, you met your co founders in this
5:03
Speaker 1: class the title of which I love, class called revolutionary Ventures.
5:07
Speaker 1: Great class name. What what exactly happened there?
5:10
Speaker 2: We just start asking, Okay, palm oils and fifty percent
5:14
Speaker 2: of products on supermarket shelves. It's really it's one of
5:18
Speaker 2: the worst emitters from a greenhouse gas perspective, and every
5:21
Speaker 2: major consumer packaged goods company knows it and has admitted
5:25
Speaker 2: it and has a palm oil policy to switch from
5:29
Speaker 2: what they call conflict palm oil.
5:32
Speaker 1: But they've all failed, sort of like the net zero
5:35
Speaker 1: of consumer packaged goods.
5:38
Speaker 2: Definitely, definitely why and why has it failed. Why has
5:42
Speaker 2: agriculture failed to solve this problem? And could microbiology create
5:50
Speaker 2: a new way to solve this problem? And what would
5:52
Speaker 2: have to be true? And we just got started with
5:54
Speaker 2: that really simple question and one thousand dollars from MIT,
5:59
Speaker 2: and we started thinking from first principles about how what
6:03
Speaker 2: would have to be true, and then we started playing
6:05
Speaker 2: around in the lab. And that's how we got started.
6:07
Speaker 1: I mean, you have this very abstract idea, let's find
6:13
Speaker 1: something that can do what palm oil does without palm trees.
6:17
Speaker 1: How do you get from there to a product?
6:21
Speaker 2: Yeah, So the basic idea was, today we make oils
6:24
Speaker 2: and fats from petroleum or animals or plants, what if
6:31
Speaker 2: we looked at the fungal kingdom microorganisms instead? And so
6:36
Speaker 2: the very first step was defining what would have to
6:39
Speaker 2: be true at scale for this to succeed. So we
6:42
Speaker 2: knew we needed to make I mentioned earlier palm oil
6:45
Speaker 2: is so good at what it does because it has
6:47
Speaker 2: this really unique profile of fats and not drives performance.
6:53
Speaker 1: So it can do lots of different things. It's like
6:55
Speaker 1: remarkably useful in many.
6:57
Speaker 2: Ways exactly, So we knew if we were going to
6:59
Speaker 2: solve this problem we had to nail that profile because
7:03
Speaker 2: you had to be able to do all of those
7:05
Speaker 2: things remarkably.
7:07
Speaker 1: Well, it's not obvious to me that that's the case.
7:10
Speaker 1: I mean, I feel like you could just bite off
7:12
Speaker 1: some of it, right, if you could do the foaming
7:14
Speaker 1: part so that you could get palm oil out of shampoo,
7:17
Speaker 1: like that would be a big deal, right, I.
7:19
Speaker 2: Think that's true. But at this point we had a
7:24
Speaker 2: big idea and this really was this really was a
7:28
Speaker 2: big problem we were trying to solve, and so that
7:32
Speaker 2: was how we thought about it. And so the first
7:34
Speaker 2: step is can you find a micro organism which can
7:37
Speaker 2: make oil, which can make this profile, this profile that
7:42
Speaker 2: looks and functions like pome And just.
7:44
Speaker 1: To be clear, why is a micro organism better than
7:48
Speaker 1: a plant?
7:49
Speaker 2: One of the I think big promises of this field,
7:53
Speaker 2: and when we started thinking about it is plants have
7:56
Speaker 2: big footprints, and right now they require specific conditions of
8:02
Speaker 2: growth on arable land, and microorganisms don't need arable land.
8:07
Speaker 2: They don't need to convert rainforest and clear them and
8:11
Speaker 2: convert them into plantations and kill all the life that
8:14
Speaker 2: lives there. Microorganisms can be produced in factories anywhere in
8:21
Speaker 2: the world.
8:21
Speaker 1: They just need a big metal tankt rate heat, and
8:25
Speaker 1: some sugar.
8:26
Speaker 2: Technricity, some basic, some basic things. I think that was
8:29
Speaker 2: the primary sort of concept. The hard question was can
8:34
Speaker 2: microorganisms actually make the products? And can they make them
8:39
Speaker 2: scalably and can they make them cost effectively? So can
8:42
Speaker 2: you make the right product at scale and cost competitively?
8:46
Speaker 2: That was the sort of unknown part and that was
8:49
Speaker 2: what we had to figure out first. And we basically
8:52
Speaker 2: started by screening thousands of microorganisms against that criteria to say,
8:58
Speaker 2: could we find an organism that makes the right oil profile.
9:04
Speaker 2: It is, in theory robust enough to scale to super
9:08
Speaker 2: large volumes, because there's tens of millions of metric tons
9:12
Speaker 2: of palm oil produced a year, and again we're thinking revolutionary.
9:15
Speaker 2: We've got to go really really big and can compete
9:19
Speaker 2: on cost and so it's got to be a really
9:21
Speaker 2: efficient production system. And so that was the first set
9:24
Speaker 2: of questions that we asked.
9:26
Speaker 1: And when you're trying to find the right micro organism,
9:33
Speaker 1: are you you're looking at the literature? Is there some
9:36
Speaker 1: point where you start like growing yeast in a tank?
9:40
Speaker 1: I mean, what is it? How do you find how
9:42
Speaker 1: do you look?
9:42
Speaker 2: Yes? And yes, so you start with the literature, and
9:47
Speaker 2: you start with history, and so you look back and
9:50
Speaker 2: see what have people made successfully in the past and why,
9:55
Speaker 2: And you know, a lot of work had actually been
9:57
Speaker 2: done for things like biofuels in the past, which is
10:01
Speaker 2: similar to the profile that we were making. There were
10:05
Speaker 2: reasons we thought biofuels didn't work as well, but there
10:10
Speaker 2: were technical proofs of concept there. So we got to
10:13
Speaker 2: learn a lot from history, and then we looked at
10:16
Speaker 2: the literature for sure, and one of the things we
10:19
Speaker 2: learned is that again, getting this specific profile of palm
10:24
Speaker 2: is really different than how most industrial microbiology works today.
10:29
Speaker 2: Most companies are making fairly simple molecules. They're making alcohol,
10:34
Speaker 2: they're making a single molecule protein artificial. You know, vanilla
10:38
Speaker 2: is almost one hundred percent made from fermentation today, single molecule.
10:44
Speaker 2: This was a complex molecule, and so we quickly learned
10:47
Speaker 2: we needed a different type of microorganism, not one that
10:51
Speaker 2: was necessarily the best factory with the best set of tools,
10:56
Speaker 2: but instead a strain which was just really good at
11:01
Speaker 2: getting fat. And so these are referred to as oleagenous.
11:07
Speaker 2: Oleaginous means oil, and so there's a whole set of
11:11
Speaker 2: oleagenous organisms that naturally produce that, And so that was
11:15
Speaker 2: the first unlock. They had not really been used in
11:18
Speaker 2: industrial scale production historically, so we were going to have
11:23
Speaker 2: to build a lot of the tools and the know
11:25
Speaker 2: how to be able to grow it. But it was
11:27
Speaker 2: really promising. And so then the next step was you
11:30
Speaker 2: start to grow it. You get a strain, you do
11:33
Speaker 2: really small scale experiments in the lab, and you just
11:37
Speaker 2: try to get something which vaguely looks and functions like
11:40
Speaker 2: palm oil. And that was that was sort of the
11:42
Speaker 2: first big breakthrough for us.
11:47
Speaker 1: Did you consider surely you considered synthetic biology? Right like,
11:52
Speaker 1: right there in Boston there's a giant at least one
11:56
Speaker 1: giant company that you know, their whole business is taking
12:00
Speaker 1: yeast and genetically engineering the yeast to produce things other
12:05
Speaker 1: than the yeast usually produces. Did you consider that?
12:09
Speaker 2: So that was I think maybe our first hypothesis. What
12:13
Speaker 2: we learned was it actually doesn't have to be that
12:17
Speaker 2: hard like nature. Nature actually does a lot of really
12:23
Speaker 2: cool stuff, uh huh, And if we can just work
12:26
Speaker 2: with what she nature has already done, that's really promising
12:32
Speaker 2: for actually getting this thing to scale and be cheap,
12:36
Speaker 2: and I think like, when we look at synthetic biology,
12:38
Speaker 2: that was the field that we were sort of enamored
12:40
Speaker 2: with at the time and that we thought was very promising.
12:44
Speaker 2: But it's a hard field to scale.
12:45
Speaker 1: Commercially, notoriously. Right, It's been like on the cusp of
12:50
Speaker 1: being huge for twenty years, right, And.
12:52
Speaker 2: So looking around the cusp of synthetic biology, but saying, like,
12:56
Speaker 2: how do we just like really focus on solving the problem.
13:00
Speaker 2: It doesn't have to be the shiniest toolkit it needs
13:04
Speaker 2: to solve the problem. Maybe if we take it a
13:06
Speaker 2: little bit simpler. And so instead of taking one of
13:10
Speaker 2: these sort of industrial microorganisms with a standard toolkit and
13:14
Speaker 2: implying all applying all the tools of engineering and trying
13:18
Speaker 2: to really force a yeast to do something that it
13:21
Speaker 2: doesn't do naturally, what if we've found a yeast that
13:25
Speaker 2: actually has evolved for centuries to do exactly what we
13:28
Speaker 2: want it to do, and we can force it through
13:31
Speaker 2: faster cycles of evolution, and we can use rapid experimentation
13:37
Speaker 2: in data to understand better than ever how it grows
13:41
Speaker 2: and optimize its performance of growth. That sounds a lot
13:45
Speaker 2: more promising to actually building a commercially viable solution to
13:49
Speaker 2: this problem, and that's where we landed.
13:51
Speaker 1: So it seems like the like the fact that there
13:55
Speaker 1: are oleagenous micro organisms that you know, oily micro organisms.
13:59
Speaker 1: Basically it suggests that the production of oil is like
14:03
Speaker 1: profoundly conserved, right, Like we get oil from plants and animals.
14:07
Speaker 1: But this fact that it's that there's oily yeast too
14:11
Speaker 1: is encouraging in your quest. It's like, oh, there's everything
14:15
Speaker 1: that lives makes oil, and some things that live make
14:17
Speaker 1: a ton of oil. Let's look at the things that
14:19
Speaker 1: live that already make a ton of oil.
14:20
Speaker 2: Yea. Yeah, And it also I think, just says something
14:23
Speaker 2: about the value of oils and fats, right, Like, there's
14:26
Speaker 2: there's clearly a need for these molecules across across lots
14:30
Speaker 2: of appleties.
14:31
Speaker 1: The reason they're in everything at the store. So, so
14:36
Speaker 1: is there some moment where you're like, we found it,
14:39
Speaker 1: We've got the magic yeast. You're still waiting for them.
14:46
Speaker 2: No, it's a good question, I mean, I think, and
14:49
Speaker 2: look like science is never a street line. And so
14:53
Speaker 2: in the early days, you know, we had we our
14:57
Speaker 2: first approach to this was slightly less simple, right, It
15:01
Speaker 2: was a little more innovative and clever, but much harder
15:08
Speaker 2: to scale. And so I think we thought we had
15:10
Speaker 2: that moment and then we had another.
15:13
Speaker 1: Wait, wait, tell me, tell me about the one that
15:16
Speaker 1: didn't work. Uh, what was the one that ended up
15:19
Speaker 1: being too clever?
15:20
Speaker 2: Yeah, so it was. Actually so most of most of
15:23
Speaker 2: industrial biology today is a single micro organism, engineering, you know,
15:29
Speaker 2: the hell out of it, and then scaling it. And
15:33
Speaker 2: we sort of said, okay, but actually, in nature again,
15:37
Speaker 2: I think we've we've always been very inspired by what
15:39
Speaker 2: happens in nature. In nature, you see microorganisms coexist in
15:45
Speaker 2: our microbiome, for example, or in lichens on rocks. And
15:50
Speaker 2: so what if we took a micro organism like a
15:54
Speaker 2: yeast that was really good at making oil, and then
15:57
Speaker 2: we took one but the yeast needs sugar, and so
16:01
Speaker 2: then what if we combined it with an algae that
16:05
Speaker 2: was photosynthetic, and so then you don't need sugar, you
16:09
Speaker 2: just need the sun.
16:10
Speaker 1: That is indeed clever, so you're lowering your input costs.
16:14
Speaker 2: Exactly, I need to grow them in the same pot,
16:16
Speaker 2: which really nobody had done before. And so this is
16:19
Speaker 2: actually our first patent filing. This coculture of yeast and algae.
16:25
Speaker 2: And it's actually our first logo for the company, which
16:28
Speaker 2: is hideous but made in Microsoft PowerPoint.
16:33
Speaker 1: And turned out to be based on an assumption that
16:36
Speaker 1: didn't work. It sounds like, but I think it just would.
16:38
Speaker 2: Have been very hard to scale it.
16:40
Speaker 1: So you have this very elegant idea, which I love
16:44
Speaker 1: because it's so satisfying and efficient. What happens, So.
16:48
Speaker 2: That's working, and what happens is actually I was at
16:53
Speaker 2: a trade show. I was at a food tech trade show,
16:57
Speaker 2: just walking the floor. This is really early days. It's
16:59
Speaker 2: just me and my co founders. We've like soft committed
17:02
Speaker 2: to this concept. And I'm just walking the floor to
17:04
Speaker 2: trade show trying to see who cares about palm oil
17:07
Speaker 2: and is anybody you know interested? And I run into
17:11
Speaker 2: someone who's got a bunch of clever ideas on basically
17:15
Speaker 2: waste stream feedstocks so cheaper than sugar, available in millions
17:23
Speaker 2: of gallons per year, really scalable, cheap, up cycled.
17:28
Speaker 1: And just to contextualize that, I mean, growing yeast is
17:33
Speaker 1: very simple, and people say all you need to do
17:35
Speaker 1: is feed them sugar, but you're pointing out here, like
17:38
Speaker 1: sugar is not free.
17:39
Speaker 2: Sugar's not free.
17:40
Speaker 1: Palm oil is like very efficiently produced and very cheap,
17:44
Speaker 1: and so even the input cost of the sugar is important,
17:48
Speaker 1: is an important cost that you need to drive down
17:50
Speaker 1: if you're going.
17:50
Speaker 2: To be for rich. It's all math. And I think
17:53
Speaker 2: when like to sort of to anchor this around the
17:58
Speaker 2: key problem at this point, the scientific solution we had
18:02
Speaker 2: was elegant and clever, but we're also trying to build
18:06
Speaker 2: a business, and I think, you know, oftentimes science based businesses,
18:14
Speaker 2: it's easy to forget that, you know, And I think
18:16
Speaker 2: we were really trying to anchor and say, yes, this
18:19
Speaker 2: is elegant and clever, However, how do we build this
18:22
Speaker 2: into a sustainable, profitable, scalable business over time? And we
18:26
Speaker 2: were really early, but I think we were always anchored
18:29
Speaker 2: towards that in the early days. And sugar and where
18:33
Speaker 2: we got our sugar and what we paid for our
18:35
Speaker 2: sugar was sort of the critical question we unlocked as
18:41
Speaker 2: an insight that we needed to solve from the early days.
18:44
Speaker 1: This is the fundamental sort of techno economic problem. And
18:48
Speaker 1: so it seems I don't want to attach too much
18:51
Speaker 1: to the photosynthesis solution, but just to be very clear.
18:57
Speaker 1: I love that solution. It seems like you're solving the problem.
19:00
Speaker 1: Why why didn't you go that way?
19:04
Speaker 2: To two reasons. One was sort of biology and one
19:08
Speaker 2: was manufacturing from a biology perspective. Clever, but you know,
19:15
Speaker 2: actually still really hard to get two micro organisms to
19:19
Speaker 2: grow in sync efficiently together, which again all goes back
19:24
Speaker 2: to the math or the technoeconomics of making this scalable.
19:28
Speaker 2: And the second was a manufacturing problem, which is, because
19:32
Speaker 2: it was so novel, we would actually need to build
19:35
Speaker 2: totally new bioreactors to support this, and then you're not
19:39
Speaker 2: only a technology company, you're now manufacturing all the parts.
19:43
Speaker 2: It just would have become too much and too expensive.
19:48
Speaker 1: Okay, too clever, too too too far, too far out
19:53
Speaker 1: beyond the technological frontier at some level.
19:56
Speaker 2: And so back in sugar being the core problem that
19:59
Speaker 2: we needed to solve to make this work, we started
20:03
Speaker 2: trying a bunch of you know, waste, things that would
20:06
Speaker 2: be totally not obvious an organism could grow on them,
20:11
Speaker 2: things that didn't have tons of residual carbon, things that
20:16
Speaker 2: had inhibitors, things that were known to actually inhibit growth,
20:19
Speaker 2: not enable growth. And we started growing. And this is
20:22
Speaker 2: again very early.
20:23
Speaker 1: Days, you're looking for all those things because they're cheap,
20:25
Speaker 1: because you're looking for a thing that's cheaper than just
20:27
Speaker 1: buying granulated sugar or whatever you buy for regular yeast. Yeah,
20:33
Speaker 1: cheap and abundant.
20:34
Speaker 2: Cheap and abundant. And this is this is early days,
20:37
Speaker 2: So it's scrappy science. It's just me and my co founders.
20:40
Speaker 2: We don't have any sophisticated lab tools. But we get
20:43
Speaker 2: some of those samples and we start growing our yeast
20:46
Speaker 2: and it turns out the yeast grows on anything.
20:51
Speaker 1: Oh that's great.
20:52
Speaker 2: This was one of our This was maybe back to
20:54
Speaker 2: your question, one of our biggest insights and breakthroughs. Yeah,
20:57
Speaker 2: and it was a really important one.
20:59
Speaker 1: Say like what if we just give it garbage?
21:01
Speaker 2: Totally it works.
21:02
Speaker 1: It's eating garbage.
21:03
Speaker 2: And we later literally did that, like we we food
21:06
Speaker 2: waste to something people talk about a lot, which is
21:09
Speaker 2: an unsolved problem on many fronts. But we worked with
21:12
Speaker 2: you know, food waste collection here in New York, and
21:15
Speaker 2: we just basically fetied garbage and it was growing. There
21:19
Speaker 2: are other reasons I think that's hard to scale, but yeah,
21:22
Speaker 2: basically we found not only can our yeast make this
21:27
Speaker 2: hard to replicate profile of palm oil that nothing else
21:32
Speaker 2: has produced naturally before. Aside from palm oil, it can
21:37
Speaker 2: also grow on anything. It can eat anything, and that
21:41
Speaker 2: was a key unlock for So we'd solved the product
21:45
Speaker 2: side of it, and now we were well on our
21:47
Speaker 2: way to solving the cost side of it and the
21:50
Speaker 2: scalability side of it.
21:51
Speaker 1: The particular strain of yeast, when do you find that, like,
21:57
Speaker 1: what is that moment?
21:58
Speaker 2: Pretty early, actually, pretty early, we had identified, based on
22:04
Speaker 2: our criteria of the right profile and from literature, a
22:10
Speaker 2: believable ability to scale, So things like can it grow
22:14
Speaker 2: on a wide range of temperatures without breaking? Or is
22:18
Speaker 2: it really fragile? And if the temperature changes. All of
22:22
Speaker 2: these things model into cost at scale manufacturing. So we
22:26
Speaker 2: screened for those things pretty early, and we pretty early
22:30
Speaker 2: on had identified the yeast strain that we work with
22:33
Speaker 2: today as the best version.
22:36
Speaker 1: So tell me about tell me about the strain of yeast.
22:39
Speaker 2: So it is oleagenous, so it naturally produces oil and
22:45
Speaker 2: it's really good. So basically it can produce up to
22:48
Speaker 2: ninety percent of its body weight in lipids in facts.
22:53
Speaker 2: When we started working with it, which was seven years ago,
23:00
Speaker 2: the genome had been sequenced, so there was enough data
23:03
Speaker 2: about it, and there were a couple of universities that
23:07
Speaker 2: had started to do work on it. So we weren't,
23:11
Speaker 2: you know, the first people to discover it, but it
23:13
Speaker 2: wasn't something that was really ubiquitous like a baker's yeast
23:17
Speaker 2: or a brewer's yeast, and so we had enough data
23:20
Speaker 2: to believe that it was compelling and we started working
23:24
Speaker 2: with it.
23:25
Speaker 1: What's what's it called?
23:27
Speaker 2: It's we don't really say the name of it.
23:30
Speaker 1: Isn't it in a patent? You didn't patent the name of.
23:32
Speaker 2: It it is, but they haven't been published yet.
23:35
Speaker 1: Okay, well, I'll keep my eye out. So you've got
23:40
Speaker 1: your yeast, you can feed at garbage. And this is
23:46
Speaker 1: like what kind of scale are you doing this set like?
23:50
Speaker 1: Is it like like a like a lab bench? Is
23:53
Speaker 1: it like a pot?
23:56
Speaker 2: It's both. In the early days when we were sort
24:01
Speaker 2: of looking to get our first round of funding, we
24:05
Speaker 2: were going, you know, on stage at y Combinator for
24:07
Speaker 2: something called Demo Day.
24:09
Speaker 1: So why Commeter is the famous startup incubator.
24:12
Speaker 2: Correct, So they'd taken a bet on our revolutionary venture
24:17
Speaker 2: and we were so early, I mean We basically had
24:20
Speaker 2: some some shape flask, so millileater. But at the end
24:25
Speaker 2: of demo day, you know, we're still We're a science
24:28
Speaker 2: project at this point with a really big market. And
24:31
Speaker 2: so we had this i'd say pressure to want to
24:36
Speaker 2: make it real. One of you know the things about
24:39
Speaker 2: science based businesses. It's great, the concept is great, but
24:44
Speaker 2: to get funding, you need to make it real as
24:46
Speaker 2: soon as possible. As soon as it's real, people get it.
24:49
Speaker 2: And so we felt we needed pressure to be able
24:52
Speaker 2: to make something not in tiny, little milli leader quantities,
24:57
Speaker 2: but something that I could hold up on stage in
24:59
Speaker 2: a room full of hundreds or thousands of people could
25:03
Speaker 2: see as material. And so we had one lab bench
25:08
Speaker 2: that we were rent and we were just having problems
25:12
Speaker 2: in the lab. The standards were not working, we were
25:17
Speaker 2: not making enough oil, the experiments weren't working, and so
25:21
Speaker 2: we went over to a friend's house who was a homebrewer,
25:25
Speaker 2: actually a beer brewer, and we used his big pot
25:31
Speaker 2: for making what he uses to make beer at home
25:34
Speaker 2: out on his porch. So normally you think about science
25:37
Speaker 2: as being very precious in a controlled environment, etc. We
25:41
Speaker 2: just did the opposite. We were like, we just got
25:43
Speaker 2: to go for it. So we went out onto his porch,
25:47
Speaker 2: used his home beer brewing material and we call it
25:50
Speaker 2: sort of porch yeast, and we brewed a batch of
25:53
Speaker 2: oil from there.
25:57
Speaker 1: And then what do you get? What is the output?
26:00
Speaker 2: A sludge?
26:02
Speaker 1: I don't like so it looks like muddy water? What's
26:04
Speaker 1: it look like?
26:04
Speaker 2: It does? But it's pretty. So our yeast actually produces karateids.
26:09
Speaker 2: Caratenoids are also found in carrots. Beta carotene is what
26:12
Speaker 2: makes carrots orange, and it's why carrots are good for
26:15
Speaker 2: eye health. And so our sledge is orangish basically cool.
26:19
Speaker 2: So it's actually quite pretty. It's like a it's like
26:22
Speaker 2: a it's like a creamsicle almost.
26:26
Speaker 1: I love that. Yeah, okay, so you got your creamsicle sludge.
26:29
Speaker 1: It's demo day. What like you put it in like
26:31
Speaker 1: a plastic jug or something.
26:34
Speaker 2: Just like basically what happens. We had to fly to
26:36
Speaker 2: California with it and we put it in a plastic
26:40
Speaker 2: jug basically, and we carried it around in our rental
26:44
Speaker 2: car all week. And then we got on stage and
26:48
Speaker 2: you know, we had a sort of line where we're
26:49
Speaker 2: talking about palm oil, and we kind of held the
26:54
Speaker 2: jug with a little bit of oil, and we said,
26:57
Speaker 2: and this is palm oil, but it's made from yeast
27:01
Speaker 2: and not trees.
27:05
Speaker 1: Still to come on the show. Getting from that homebrewed
27:08
Speaker 1: jug of creamsicle sludge to hundreds of tons of creamsicle sledge.
27:26
Speaker 1: We're not yet to scale and cost, which clearly are hard,
27:30
Speaker 1: but at least in terms of the thing, you've got
27:32
Speaker 1: the thing.
27:33
Speaker 2: We've got this, okay, And I think we got the
27:36
Speaker 2: thing pretty early. Yeah, And that was important because, as
27:40
Speaker 2: you allude to, we have a whole bunch of other
27:42
Speaker 2: problems to solve, and so you know, as you're building
27:45
Speaker 2: a business like this, I think we try to think
27:47
Speaker 2: about what's the most important thing to solve, what's the
27:51
Speaker 2: most important problem to solve right now? And at that point,
27:55
Speaker 2: it was still the stuff around. The technology basically works,
28:00
Speaker 2: so further it prove that it can scale, prove that
28:03
Speaker 2: you can get to competitive economics, and then figure out
28:08
Speaker 2: actually scale, figure out mark, go to market, figure out
28:11
Speaker 2: all of that later. But that was really the first
28:14
Speaker 2: big problem.
28:16
Speaker 1: I mean, it always seems with things in a lab.
28:19
Speaker 1: And this is like Pad Brown from Impossible Foods says
28:22
Speaker 1: this too. It's like it's hard to grow plants and animals.
28:25
Speaker 1: They're big, they take up a lot of space. If
28:27
Speaker 1: you could do a thing in a va, it should
28:29
Speaker 1: be cheaper. Like, clearly it's hard. There's a lot embedded
28:32
Speaker 1: in that should right, but at a just first principles level,
28:37
Speaker 1: it seems totally plausible'.
28:40
Speaker 2: That's the promise of what we're all working on the
28:45
Speaker 2: place where the rubber hits the road is like you
28:47
Speaker 2: have to be making the right molecule and the right market.
28:50
Speaker 1: And scale is really hard, right that, Like agriculture is
28:54
Speaker 1: so highly it's so vast, there's so much economy of scale.
28:58
Speaker 1: It's very efficient. I mean, obviously there's like externalities that
29:03
Speaker 1: they're not paying for, but like, even so agriculture is
29:07
Speaker 1: super efficient, say that for it, they're very good at
29:10
Speaker 1: making a lot of what they make cheap.
29:11
Speaker 2: Laying it is, they've also had a really long time
29:14
Speaker 2: to make it efficient. And so one of the just
29:17
Speaker 2: challenges of I would say, like any novel technology competing
29:21
Speaker 2: against a big incumbent like that and specifically ours, is
29:25
Speaker 2: they've had a century plus advantage on us for getting
29:29
Speaker 2: it to scale, for getting those costs, and so of
29:32
Speaker 2: course it takes us more time and money to get there.
29:34
Speaker 2: Of course we're disadvantage. Can we get there? Yes, but
29:38
Speaker 2: you've got to have ambitious people building the technology. You've
29:42
Speaker 2: got to have funding support deploying it, you've got to
29:45
Speaker 2: have customers adopting it. And so you know, we've I
29:48
Speaker 2: believe we can get there, but it takes time and money.
29:51
Speaker 1: You've got your palm oil substitute, You've got some money.
29:57
Speaker 1: What are a couple of the key things you have
29:59
Speaker 1: figured out since then to get from where you were
30:01
Speaker 1: then to where you are now.
30:02
Speaker 2: Yeah. So at that point, again, the technology was basically working,
30:09
Speaker 2: and so a couple of key things were getting enough
30:14
Speaker 2: data to be able to build a cost model that
30:19
Speaker 2: was believable. So in the early days you don't really
30:23
Speaker 2: have credible data. You can guess and you can directionally
30:27
Speaker 2: say I think in theory it's possible, it's possible.
30:32
Speaker 1: Sure, I mean it's very hard to build a credible
30:35
Speaker 1: model based on using your friend's home brew kit exactly.
30:40
Speaker 2: Yeah, And so in the early days it was all
30:42
Speaker 2: based on theoretical possibility. So one of the important pieces
30:48
Speaker 2: was getting enough data repeatedly and showing improvements that indicated
30:57
Speaker 2: we're actually on track. To hit those theoretical limits. So
31:01
Speaker 2: a really important step. And by the way, this is
31:04
Speaker 2: ever evolving. We update our model basically daily with new
31:08
Speaker 2: up dates. But getting something that indicated we could hit
31:14
Speaker 2: you know, single digits dollars per kilogram, and.
31:19
Speaker 1: So you need to prove that. I mean, obviously it
31:21
Speaker 1: needs to be true or your company is not going
31:23
Speaker 1: to work, but you need to prove it. What to
31:26
Speaker 1: get funding, you need to prove it to get advanced
31:28
Speaker 1: commitments from from buyers.
31:30
Speaker 2: Both of those both we also needed to prove it
31:34
Speaker 2: to ourselves.
31:35
Speaker 1: Yeah, I mean, seriously, why are we doing this?
31:37
Speaker 2: Seriously? You know, like we started this, it was possible,
31:41
Speaker 2: but we didn't really know. And so I think it
31:44
Speaker 2: was important for us to say and again we know
31:46
Speaker 2: that this field is hard, and so we had to
31:49
Speaker 2: really be able to say we believe credibly that we
31:53
Speaker 2: can get this to a cost structure that will work.
31:56
Speaker 2: And that was just a really important milestone for us
32:00
Speaker 2: to hit. So the data to support a cost that
32:04
Speaker 2: could be competitive was really important, and that came on
32:07
Speaker 2: the back of years of experiments and improvements to the bioprocess.
32:14
Speaker 1: What cost are you at now? What cost per kilogram?
32:18
Speaker 2: So at scale, we're below ten dollars at kilogram, okay,
32:21
Speaker 2: which is really close to where we need to be.
32:25
Speaker 2: We've still got ability to improve that and we will.
32:28
Speaker 2: But we're pretty happy with where we are today for
32:32
Speaker 2: being pretty early into the commercial life cycle of the company.
32:36
Speaker 1: I mean, is that price? Does that price mean there
32:38
Speaker 1: are companies that will buy from you at that price
32:41
Speaker 1: and sell at something of a premium sort of analogous
32:44
Speaker 1: to like organic food or something some people are willing
32:46
Speaker 1: to pay more? Is it like that? Is that where
32:48
Speaker 1: you are now?
32:49
Speaker 2: Yeah? So that's where the technology is.
32:52
Speaker 1: Yeah.
32:52
Speaker 2: In terms of commercial, we launched commercially for the first
32:56
Speaker 2: time a little over a year ago.
32:58
Speaker 1: That's your own, your own product.
33:01
Speaker 2: We did launch with our own product. The business model
33:05
Speaker 2: is B to B ingredients, but we did launch with
33:07
Speaker 2: our own products. So am I allowed to curse on here?
33:12
Speaker 2: Or should I? Yes?
33:13
Speaker 1: Yes, you are.
33:14
Speaker 2: So. We launched the Palmless platform for sustainable ingredients last March.
33:21
Speaker 2: It was introducing our platform really to the world for
33:25
Speaker 2: the first time, and with it, we launched a direct
33:28
Speaker 2: to consumer product which was a nourishing oil and we
33:33
Speaker 2: called it Save the Fucking Rainforest.
33:36
Speaker 1: Under Palmless nourishing its skin. It's skincare right, to be clear,
33:40
Speaker 1: it's not nourishing in the sense in hair.
33:42
Speaker 2: Body, So you can use it in any of those,
33:45
Speaker 2: but just don't eat it. And so we launched that
33:49
Speaker 2: the product sold out in two hours. We had over
33:52
Speaker 2: a billion media impressions with zero dollars marketing spend, and
33:58
Speaker 2: most excitingly, we had inbounds from about one hundred and
34:02
Speaker 2: forty seven manufacturers of consumer goods.
34:06
Speaker 1: Are customers right, and that I mean that product is
34:09
Speaker 1: basically marketing right, Like you're not selling that to make
34:12
Speaker 1: money or it's not. It's like marketing swag that people
34:15
Speaker 1: pay for it.
34:15
Speaker 2: It goes back, it goes back to the idea of
34:18
Speaker 2: making it real.
34:19
Speaker 1: Yeah right.
34:20
Speaker 2: I can go and try to sell to these companies
34:23
Speaker 2: and we can spend you know a long time in conversation,
34:28
Speaker 2: but by making it real by putting a product out
34:30
Speaker 2: there by the way, like you know, getting every meach
34:34
Speaker 2: major media publication wanting to write about it. So since
34:39
Speaker 2: then we've started selling the product to customers. So we
34:43
Speaker 2: have closed multiple purchase orders. We've sold you know, metric
34:47
Speaker 2: tons of our oil too. Manufacturers. We've started in beauty
34:52
Speaker 2: and personal care, and so one of those companies launched
34:56
Speaker 2: a soap bar. Last year, we've had companies launch We've
35:00
Speaker 2: got one that's launching a sun care product soon, so
35:02
Speaker 2: we've had a dozen or so customers place purchase orders.
35:07
Speaker 2: The third thing that's happened really in the past year
35:10
Speaker 2: is the EU has passed landmark legislation, the EU Deforestation Regulation,
35:16
Speaker 2: where they are monitoring seven crops, including palm oil and
35:20
Speaker 2: swabean oil. And for companies that importing use these crops,
35:26
Speaker 2: they have to have a totally new way of validating
35:30
Speaker 2: that they did not come from deforestation, and if they
35:32
Speaker 2: are unable to do that, they can be fined up
35:35
Speaker 2: to five percent of their annual revenue, which is a
35:38
Speaker 2: material stick.
35:39
Speaker 1: Sure sure, and so it's going to basically drive up
35:43
Speaker 1: the cost of palm oil to companies selling in your own.
35:46
Speaker 2: It will also dry up supply because most of the
35:48
Speaker 2: palm oil today you just can't prove if it came
35:52
Speaker 2: from deforestation.
35:53
Speaker 1: So that regulation is what you were waiting for as
35:57
Speaker 1: a company, is what you're telling me.
35:58
Speaker 2: I couldn't have told you that. We thought this would
36:02
Speaker 2: have happened, but it's a great tailwind, so I would say,
36:07
Speaker 2: we're in conversations with men of the largest food manufacturers,
36:12
Speaker 2: and we are very close to converting to a multi
36:16
Speaker 2: year agreement with a large consumer goods manufacturer in Europe
36:19
Speaker 2: as well.
36:20
Speaker 1: Why might you fail?
36:26
Speaker 2: We're taking on I mean nothing about this is easy.
36:33
Speaker 2: Going from an idea to a technology that works in
36:35
Speaker 2: scales that's using biology, nonetheless, is not easy. Tackling a large,
36:45
Speaker 2: mostly commodity market with lots of momentum is not easy.
36:53
Speaker 2: And getting large multinationals to change their buying behavior is
36:57
Speaker 2: not easy. And in order to win, we have to
37:02
Speaker 2: get really big, really.
37:04
Speaker 1: Fast, because if you don't get really big, the oil
37:09
Speaker 1: won't be cheap enough, as.
37:10
Speaker 2: Simple as that, That's right, It won't be cheap enough.
37:12
Speaker 2: And we can't solve the needs of these large companies.
37:17
Speaker 2: Ah right, the company I was just talking about. You know,
37:20
Speaker 2: these companies may buy hundreds of thousands to millions of
37:24
Speaker 2: metric tons of palm oil per year.
37:27
Speaker 1: And how much can you make Now.
37:28
Speaker 2: We're on track to make hundreds of metric tons this year,
37:32
Speaker 2: which is great, by the way.
37:33
Speaker 1: Like right, but you need to go up a thousand
37:36
Speaker 1: x now basically, but.
37:38
Speaker 2: We need to go bigger faster, and like, that's the
37:42
Speaker 2: number one thing that keeps me up at night is
37:45
Speaker 2: we have we have brought this thing to market so
37:49
Speaker 2: fast and faster than most people thought was possible for
37:52
Speaker 2: a biotech. But we're not just competing with biotechs, right, Like,
37:56
Speaker 2: we're competing in this big world, and from a company perspective,
38:01
Speaker 2: also from a climate perspective, we have to go bigger, faster,
38:05
Speaker 2: and so you know, if we fail, it's because we
38:09
Speaker 2: can't get big enough, fast enough. And I don't you know,
38:14
Speaker 2: perhaps there's a technical reason for that. That seems unlikely.
38:19
Speaker 2: The technology works, so it's probably something else.
38:24
Speaker 1: So it's execution risk. It's execution risk, I think.
38:27
Speaker 2: So you know, it's we're making real widgets. We're making
38:30
Speaker 2: real physical.
38:31
Speaker 1: Things, physical things that soon people will be eating, right,
38:34
Speaker 1: which is non trivial. What does your company look like
38:37
Speaker 1: in I don't know. I often say like five years
38:40
Speaker 1: at this point, but I feel like for your company,
38:41
Speaker 1: I want to say a year or eighteen months or something, right, like,
38:45
Speaker 1: if things go well, where are you're going to be
38:46
Speaker 1: in a year or two?
38:48
Speaker 2: Yeah, I mean, we're at a really exciting point. We
38:51
Speaker 2: just crossed the bridge a year ago we were just
38:54
Speaker 2: an R and D company. Now we're commercial. It's a
38:58
Speaker 2: really exciting point in the company's life. And again, you know,
39:01
Speaker 2: we've made some small sales. We know people want the thing,
39:04
Speaker 2: but now it's like gas. We need to put the
39:08
Speaker 2: gas on right, go time, go time. And so in
39:12
Speaker 2: a year or two we want to be making money,
39:17
Speaker 2: you know, like I want that. And the thing is
39:20
Speaker 2: is that our we didn't really talk about this, but
39:21
Speaker 2: our go to market has started, you know, instead of
39:24
Speaker 2: tackling the really big, really cheap market first, which is
39:29
Speaker 2: by the way, what biofuels companies did and what a
39:31
Speaker 2: lot of companies have done by chasing food first, we've
39:35
Speaker 2: taken more of the sort of Tesla approach. Start in
39:39
Speaker 2: a market where you can make a better performing product
39:42
Speaker 2: and people are willing to pay premiums, and then take
39:45
Speaker 2: all the money that you make and funnel it back
39:47
Speaker 2: into the business, drive scale, drive down cost, and then
39:50
Speaker 2: take on the big market.
39:52
Speaker 1: And your Tesla roadster is like sixty dollars skin oil.
39:57
Speaker 2: Yes, basically, so it's in the beauty and personal care industry.
40:00
Speaker 2: And our customers will sell products anywhere. Sometimes they're they're
40:06
Speaker 2: you know, thirty dollars, but sometimes they're two hundred and
40:08
Speaker 2: thirty dollars. Yeah, but in that market, there's a willingness
40:11
Speaker 2: to pay, there's fast adoption, and they care about both
40:15
Speaker 2: innovation and sustainability, which is what we care about, and
40:19
Speaker 2: so we're really driving forward there. But we do have
40:23
Speaker 2: ambitions to move into food I would say within about
40:26
Speaker 2: two years as well. And so we're chasing a lot
40:28
Speaker 2: of things in the next two years, which is go
40:32
Speaker 2: become the hottest ingredient in beauty and personal care, make,
40:36
Speaker 2: you know, get revenue material in support of that, and
40:43
Speaker 2: get the business to a position where we can start
40:46
Speaker 2: to really scale it from a profitability perspective and move
40:50
Speaker 2: into more markets geographically, larger scale and new markets like food.
40:58
Speaker 1: We'll be back in a minute with the lightning round.
41:10
Speaker 1: Now it's time for the lightning round. What's your favorite
41:13
Speaker 1: product that contains palm oil?
41:15
Speaker 2: I love chocolate and all almost all the chocolate, and
41:17
Speaker 2: I like the I love like gas station chocolate.
41:20
Speaker 1: Uh huh, cheap, crappy, garbage chocolate.
41:24
Speaker 2: I know, sorry, mom, but they they've almost all got
41:27
Speaker 2: palm oil. Unfortunately.
41:31
Speaker 1: What do you wish more people knew about yeast?
41:35
Speaker 2: I think yeast, and like microbes and micro organisms, they
41:40
Speaker 2: have a negative connotation, but like they're really amazing, They're
41:45
Speaker 2: really this workhorse, they're natural, and so I just wish
41:49
Speaker 2: that they had a positive connotation instead of a negative connotation.
41:53
Speaker 1: Yeah, if one didn't think infection, it would help. Yeah, yeah,
41:57
Speaker 1: that's what I think.
41:58
Speaker 2: It's better than bacteria.
42:00
Speaker 1: Yeah, yeah, fair. But yeah, before you went to grad school,
42:04
Speaker 1: you worked at Goldman Sachs. What is one thing that
42:07
Speaker 1: you learned at Goldman that's been useful to you running
42:09
Speaker 1: a company.
42:10
Speaker 2: I really learned how to work at Goldman as a
42:14
Speaker 2: twenty two year old who knew like nothing. I think
42:17
Speaker 2: it was a really incredible training ground, and I think
42:20
Speaker 2: it just felt a great foundation for how to work,
42:24
Speaker 2: how to communicate, And I'm very grateful for my time there.
42:29
Speaker 1: What's the most underrated LCD sound system song?
42:33
Speaker 2: Someone great?
42:36
Speaker 1: What's one thing I should not do if I go
42:38
Speaker 1: to Austin, Texas?
42:41
Speaker 2: Uh? Hot, take don't eat tex Mex because it's better
42:45
Speaker 2: in San Antonio.
42:47
Speaker 1: Okay, San Antonio is your hometown. Yeah, Okay, Well, if
42:52
Speaker 1: I'm in San Antonio, where should I eat tex Mex tech?
42:55
Speaker 2: Amalina?
42:58
Speaker 1: What was one surprising thing about meeting Prince William and
43:01
Speaker 1: Kate Middleton.
43:07
Speaker 2: Gosh, so many. I mean I was not intimidated at first.
43:13
Speaker 2: You know, their staff was really training us on how
43:16
Speaker 2: to approach them. I did not think I was intimidated.
43:20
Speaker 2: I you know, when I met them, and as soon
43:23
Speaker 2: as they walked in the room, it's like my heart
43:25
Speaker 2: hit the ceiling. It was just they have this royal presence,
43:29
Speaker 2: and they have this really strong presence. They're also both
43:33
Speaker 2: lovely and they knew they knew so much about palm oil,
43:36
Speaker 2: so they were really well well prepped and informed and
43:41
Speaker 2: it was lovely.
43:42
Speaker 1: Yeah. So you were inspired by this class you took
43:46
Speaker 1: at MIT called Revolutionary Ventures, And I'm curious, what is
43:49
Speaker 1: one thing that you learned in that class that has
43:51
Speaker 1: stayed with you.
43:56
Speaker 2: Technology is necessary, but not sufficient. Revolutionary ventures always require
44:05
Speaker 2: a breakthrough in technology, but that's just a fraction what
44:09
Speaker 2: it takes to actually get things successful. There's the adoption piece,
44:13
Speaker 2: there's the funding piece, there's the scaling piece. So technology
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Speaker 2: is critical, but insufficient.
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Speaker 1: Sheratku is the co founder and CEO of C sixteen Biosciences.
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Speaker 1: Today's show was produced by Gabriel Hunter Chang, edited by
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Speaker 1: Lydia Jean Kott and engineered by Sarah Bruguer. Please email
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Speaker 1: us at problem at pushkin dot fm. Tell us how
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Speaker 1: we can make the show better, who we should interview.
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Speaker 1: We're going to take a couple weeks off, but we'll
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Speaker 1: be back before too long. I'm Jacob Goldstein. Thanks for listening.