 Hello everybody. What is up slush 2021. And that's that's that's that's Houston energy right there. Houston energy. Yeah, yeah. Different kind of better there. Yeah. So so Sean this has been uh this has been a pretty big year for for you and Sologen. Earlier this year raised 350 million dollars at a 1.8 billion dollar valuation. Crossed a hundred million dollar annual revenue run rate. And coolest of all brought online the world's very first carbon negative chemicals factory. Yes. All very cool, but I actually want to start with the very beginning. I want to go way back. So the spark of the idea for Sologen, a carbon negative chemicals company, actually came from cancer research. Yes. How did that happen? Yeah. So my my co-founder, Gorab Chakrabarti, he was an MD PhD researcher at UT Southwestern. He was best friends with my wife at the time, or well she was my girlfriend then. But I would fly down to Dallas for one week every month. Then him and I would just talk over poker games because like I was focused on, you know, I do very traditional chemical engineering. I'm kind of the dinosaur over here. Fisher tropes, methane steam reforming, all the really good stuff. And I used to use enzymes when I worked in a pharma company. They were very expensive. And he was, he had discovered this enzyme within a pancreatic cancer cell that had these really novel properties. And I'm kind of the biotech skeptic. So I was like, well, that's really neat, but like they're very expensive, like it's hard to produce. And so we were essentially just talking over several years about, well, you know, what if enzymes became cheaper? What if you could engineer them more readily? Like how could that affect the chemicals industry? And how could you integrate that into the chemicals? So he discovered through his cancer research that these cells overexpressed hydrogen peroxide, basically as a defense mechanism for the cancer. Exactly. And he thought, hey, Sean, it'd be cool if we use that mechanism to make industrial chemicals. And you said that's an awful idea that will never work. That's terrible, I said. I mean, you can kind of, I'm a big fan of this thing called techno economics, right? Math is free. Rather than stepping foot in the lab, can we build a chemical plan on paper? What are all the inputs? What are the outputs? What's the cost structure? And my perception of enzymes at the time was they're just going to be too expensive. And you saw with Francis Arnold's Nobel Prize in 2018 around directed evolution that the leaps and bounds within synthetic biology, the rest of the chemicals industry, myself included at the time, right, was wholly unaware of, well, what are those implications if you were to integrate it? So you express the skepticism. He keeps on it. You start to think, oh, maybe there actually is an idea here. How did you go from that sort of skepticism, but maybe to actually validating if there was something there? So when you draw it out on paper, you could essentially map to a research program. You could say, well, if we could achieve this price, if we could achieve this catalyst performance, if we could build a reactor that did these things, then it would work. Then you'd be able to sell something at a better price relative to the incumbent and a lower carbon footprint. And so because it was like there's now a tenable path to get there, I was like, there could be something here. So the very first step was literally an Excel spreadsheet. Excel spreadsheet. That laid out all the assumptions. What would the world need to look like if this worked? And then you said, are those assumptions reasonable? So actually the first step, him and I were drunk at a bar in Dallas. And we drew it out on, we actually have it now in our office. It's like, you look at it now, you're like, I guess that made sense when we were drinking. But that was actually like literally on a napkin. Literally on a napkin. Love it. Try to draw it out. Okay. So you draw this out. It seems like there might be there there. And now you've actually got to start to build. Yes. To see if this thing could even work. How did you go about that? So we pitched the idea to the MIT Entrepreneurship Competition and we didn't win, but we got $10,000. So then what's kind of the exciting part is, well, it's not enough money to build a chemical plant. You can't build a chemical plant for $10,000, but now you're in a pretty constrained optimization problem. What can you do with $10,000? And so for us, we've got a lab in Dallas. We built this little proof-of-concept PVC reactor. As our first investor, you're the only person that saw the very original one. And well, you know, there's a huge element of luck that I think is really, really important that something called a float spa, especially these hot tubs, an owner saw our MIT pitch and reached out to us on Facebook and was like, oh, if you make this, we'll buy it. And this, this is what Catalyze always was like, okay, well, we had this little unit. It's like, this is a proof-of-concept. What first customer can derive value from even this tiny little unit? And it were these float spas. And so we, we cash flowed this thing about $10,000 a month. This is a little PVC reactor. And I was delivering a hydrogen peroxide around in my... I love this. So right now, you know, Solidgen has, how tall is the reactor? So our reactor is now over 60 feet tall. In meters, man. We're in... Oh, apologies, apologies. What would that be? 20 meters? It's a big, beautiful plant. It's, it's far larger than this stage, incredibly tall. And it can feel like, man, how am I ever going to get there, right? To this very large company that's generating all this cash flow with this very large reactor. And I think the beauty of this is that you literally started with a two-foot tall reactor made of largely plastic parts that you bought at Home Depot. Yep. And just sort of showed that it could kind of maybe work. And then you took the product that was being made and you actually sold it to local sensory deprivation tank purveyors, right? So how did you, how did you, how did you reach those, how did you reach those people? How did you, how did you market it to them? Well, so they found us, which was the best part. And then that FlowSpot owner shared our MIT pitch to a Facebook group with all 400 FlowSpot owners. Wow. And so then we had a bunch of them reaching out and we, we got 80% market share of the FlowSpot, right? So, I mean, to me, like the, the journey, right, is like, we knew the stages of scale-up that we needed to achieve. And so what we wanted to do was, well, how do you build a business model that's not all or nothing, where at each milestone for technical risk and scale-up risk, we also have a commercial part of real business that can derive value from, from where we are today. I mean, and they're bought into, you know, this is our vision, this is where we want to go. Here's what we can serve you today. Do you want to come and join us on the ride? And so, I mean, at this point, right, you're not even thinking about how do we build a startup, and how do we build a company. You're literally just focused on proving that this technology can work and then selling the product that's coming off. So actually, we were more focused on, we only had $10,000 in the bank. I spent $10,000 on a reactor. Our rent was 400 bucks a month. So we were mostly focused on, how do we not run out of money? And not, I had a day job at the time. That's a good thing to focus on. Okay, so at this point, you know, your co-founder, Gorab, is an MD-PhD. You're an MIT chemical engineer. And so now you're transitioning from the world of research and academia into the world of entrepreneurship. In what ways did the world of academia and research prepare you well for entrepreneurship and in which ways maybe it was a counterproductive? So I think the number one, so I would say there's two things that academia really, really helps you with. So the first one is, if you think about a five-year PhD program, you have to be an interesting type of individual to try to embark on this. So like I had a singular goal in five years, and I wanted to make tungsten behave like platinum. I have one goal. Well, what does that look like day to day? Like how every day do I know I'm getting closer to turning tungsten into platinum? Right? And in 2014, I did over 100 experiments in one year and every single one of them failed. And so it essentially prepares you for having a singular focus but being highly flexible in terms of how you finally get to that singular focus. And the other one I call it kind of thriving in the chaos, right? Being okay with having a total lack of structure and it being somewhat chaotic around you. Like that's kind of what academia is. And if I were to add a third thing, and I think this one particularly for MIT was you're surrounded by all of these interdisciplinary teams. And so you see research from all of these different angles. And Solugin today, I mean, we've tried to incorporate those elements into Solugin. Okay, so those are the ways it prepared you well? Yes. Now what are the habits or the muscle memory or the best practices that served you very well as a researcher that did not serve you well as an entrepreneur? So I would say it's the incentive structure within academia. So in academia, you're rewarded for novelty. In many ways, things that are intrinsically impractical. Especially too with the government grants. I mean, the government views academia as how do we start funding things that industry won't do on their own, right? So it's kind of baked into the entire fundamental structure. So kind of peeling yourself back from that. And I think the second part is when you're in academia, you're in a bubble and everyone speaks your language. When you're running a company, virtually nobody that you talk to speaks your language. Changing the way you communicate, the way that you tell stories. We found that this is one of the hardest. In academia, you're rewarded for communicating with data, data, data, data, data, and then immediately talking about the five different ways your data might be wrong. And in academia, you'll do really well if you communicate that way. If you communicate that way as an entrepreneur, people's eyes will gloss over and you'll lose people. You won't be able to hire, you won't be able to raise money, you won't be able to make sales. Yeah, no, that mode of conversation generally doesn't work anywhere when you're running a company, right? Turn some employees off, investors for sure. And then especially customers, right? Because technology is not the end all, be all, technology is enabling the company. But then when you step into that founder role, it's more, okay, well, how do I marry this technology with creating value for the customer? And so were you able to get during your PhD program any actual sort of commercial experience? Yeah, so this, I would say, is the other challenging part within academia. So I had some commercial experience, but it was always in the context of what I would call late-stage capitalism. So one of my favorite projects actually engineered Coco Puffs. That was a Coco Puff engineer, right? So if you think about all the chocolate cereal, the chocolate cereal that people in America eat at least. So I mean, if you think about what's the latest and greatest innovations happening in Coco Puffs, it's not, right? I mean, you're essentially doing incremental innovation. And so figure when you're in academia, you see that really front end, crazy novelty. We're working on things that might be viable 30, 40 years out. And then in industry, you see this is a technology that's decades old and we're just trying to incrementally improve it. So you really don't see that space in between. For those that don't know, late-stage capitalism is a term for capitalism kind of that's lost its way. A capitalism that's not about fundamentally improving the state of the world or solving the problems, but kind of like ringing the last few drops out of a wet towel. And so Sean, literally, and you were literally working on optimizing how shiny Coco Puffs were. So the marketing team said that different geographies wanted different levels of shininess and glossiness. A heat and mass transfer model of moisture through a Coco Puff, and then I would hit them with electron beams and do something called scanning electron microscopy on Coco Puffs. You've got to coat them in gold. I have a whole bag of gold Coco Puffs. Golden-coated Coco Puffs with a very expensive machine, looking at them at the microscopic level. And I remember, just to quick aside, I mean, it was one of the best things that ever happened to me in my whole life is I was sitting there SEMing Coco Puffs, and it's very hard to get instrument time on this SEM. And this researcher just burst through the door and she was holding two giant blue fruit roll-ups that went all the way to the ground. She was like, we made a major breakthrough. I need the machine right now. And I was like, is this happening? Like, this is amazing. I love that it's very funny. It's also like, it's very haunting in a way, because you have all these really brilliant people with incredible technical expertise. MIT trained just focused on optimizing the flavor of a candy or the sheen of a cereal. I'm really glad that you did not become a career cereal optimizer, Sean. Well, but that's the thing. There's an element of academia that lends you to that, because you can become comfortable in your research. Like, it's comfortable doing the science. It's comfortable doing the science at a late-stage capital company. In the startup world, you very much want to be uncomfortable. And you don't want to jump back into sort of your technology background. So it's quite interesting that I would say the last time we really saw an incredible wave of entrepreneurship coming out of academia was actually in clean tech 1.0. And that kind of like boom and then bust. Yep. And obviously right now there's a tremendous amount of energy around climate tech and innovation, which is fantastic. But a lot of people don't realize that we had similar levels of enthusiasm over a decade ago. And almost all of those companies failed, despite billions of dollars in the space. And I know you've become a bit of a student of clean tech 1.0 to make sure that, you know, on Solagen's journey, you don't repeat some of those mistakes. So how did you go about learning the lessons of the clean tech 1.0 failure? And then what are some of the sort of core lessons that you're applying to Solagen? Yes. So I would say for transitioning from academia to entrepreneurship, especially in sort of a deep tech role, finding mechanisms to talk to people who have done it before and really understanding what went well and what went poorly, the most important thing that I think Gorbin and I did as founders of Solagen. And this was right after you invested, we went through Y Combinator. And they really pushed us to be like, okay, well, from Y Combinator's perspective, like, well, what you're doing is kind of crazy, right? We're kind of out here in left field. Who are the people who have done it before and learned from them? And so we talked to the founders, you can think about companies like Key or Bioamber, Myriad, Cymix, right? And there were several themes that I... By the way, there's a reason you guys don't know those names. Yes, yes, there's a reason, right? Or if you do know those names, they kind of elicit like, oh, man, like... And so, you know, you can kind of put into a couple of different buckets. But so, I think the first one is there was this really core idea around, you only want to focus on your core expertise. And the problem here is, again, your technology is going to enable a business. It is necessary, but it is not sufficient. So for Solagen, it was like, well, what we don't want to do is have 30 simultaneous research programs. Like, Gorm and I are good at research. You could be like, well, our core competency is research. We're only going to do research. Yeah. You're not going to create value by just doing research, right? And research programs are very expensive. So that was kind of the first learning. The second learning... Technology in a vacuum won't just automatically create value in the real world. No, like, that's why Solagen is a story of luck, honestly. Like, those float spot owners reaching out to us, it was like hearing about their problems. Like, we started making like really bizarre adjustments to our product. That was like, in my mind, I was like, well, I just came out of grad school, and I was like, this isn't real innovation. But for the customers, it was like, well, this is super helpful, right? Yeah. It's like, oh, you changed the packaging. We love this. And I'm like, great. So, and then I would say a second one, just as it relates to my specific industry around scaling up, you know, chemicals manufacturing, materials manufacturing, it was essentially this onus that, or this mantra, really, that we're going to hit technical milestones or have a variety of research programs. We're going to hit technical milestones, bring in new investors for each technical milestone, and then we're going to IPO to build a commercial plan. And then suddenly we're going to push button, get molecule, and we'll be really good at supply chain distribution and fulfilling customer orders. Like, we're going to have customers after IPO. We, I guess, accidentally took an orthogonal approach to that from day one just because we only had $10,000 a cash in the bank. Yeah. And so a lot of the early clean tech pioneers focused entirely on building capacity for their sustainable thing, spent tons of money building that capacity, IPOed, and then said, OK, now we're going to sell it, and either realized, oh, there's no market for this. Yep. Or realized, oh, there is a market for it. But, oh man, there's these three other steps in between making it and selling it that we didn't think about, that now we've got to work on. They were to front end on the value chain. Yeah. And so, OK, so I like the idea of saying, we want to start selling before we have the thing. But how do you do that? How do you sell before you have built the capacity? So I think what's important is to lean into a niche customer. Right? There is not an invest, like, I don't think you invest in Solaging, because you were excited about dominating the float spot industry. Right? That's not like, oh, this is great. But it's like, when you have a customer, even in that niche market, like, I think to me, if I were to try to create a framework where somebody from academia to entrepreneurship could apply this framework, if you think about your company today and where you are, whatever you're focused on, think about that vision that you have for five years. What are the organizational capabilities that you need if you're going to be successful five years from now? And are there any of them that if you were to pull them in today and start doing them today, is there a customer that would derive value from it? Interesting. Right? And so for us, what that was was essentially supply chain. It was blending and distribution. So after our seed round, when we built the first true pilot plant, we were like, OK, well, you know, we have our pilot plant, but our customers, they buy all sorts of different molecules. Like, can we supply them those? Can we blend our molecules into a final product that really delivers them value in the field? Because we know that if we're successful in the future, it's not that you just turn a plant on and suddenly you're buying rail cars and selling tanker trucks, right? How do we start doing that today and finding customers that really derive value? I love this framework. So the framework is basically future needed organizational competencies that might not be needed now, but are going to be needed to succeed five years from now and then overlap that with a Venn diagram of solving customer needs today. Exactly. And then finding the intersection and then doing that now such that five years from now you're not kind of caught off guard with these new competencies and have to spin them up out of nowhere. Yes. Very cool. So one of the ways that you sort of pushed through distribution of the product was you actually launched your own brand of bioproxide wipes. Yeah. What's that about? So this one, I tend to use this word sequencing a lot, right? Because at every stage of financing for the company there's a certain sequence where it's like, here's my vision, I want to decarbonize chemicals. With the assets that I have today, with the team that I have today, with the money we have in the bank, what can we do to start solving customer problems, start building these organizational capabilities that's essentially the highest ROIC return on investment capital path I can take towards my vision. And so we still had a tiny little pilot plant. So if you do the quick math, it's like, well, our FlowSpot customers were saying, hey, I'd like to use this product at home. So we're like, okay, well, that's a great data point. And then the second one was, well, we only have this tiny plant. This would also help us expand the revenue that the small pilot plant could create. And so with essentially those two data points, we launched our own consumer cleaning brand, Ode to Clean. And you marketed this by collecting a collection of mommy blogs. Yes. And then marketing to the mommy blog saying, hey, we have a sustainably made hydrogen peroxide wipe that you can use to clean up. Yep. Yeah. And it's sold out. And it's sold out. Yeah, it's sold out in the first couple of weeks. I mean, I think this was the thing that like, for Gorb and I, we really like, we obviously love the science, right? We're technical founders, but there's a thrill to diving into the unknown to be like, well, let's try this, right? And that to me is like, you learn that in academia, right? It's like, just go try something new and kind of fail fast mentality. And so for us, we really like the cleaning brand. It turned out, I don't think we were the best marketers on earth. But what was fortunate for us, I mean, you know, having the brand was great. Having that revenue was great. Ultimately, the brand got acquired just a couple of months later, but it was that not proving just to investors our ability to execute to take something from idea to an actual commercial physical product that you can touch, but also for our future customers. So even like our customers that have nothing to do with buying cleaning wipes, like when we were first going into, okay, well, we want to do water treatment at a larger scale. The fact that we already had a commercial product on the market, that brings customers to the table. Very cool. And it showed that you could take your product and actually put it into a product that was then sold to consumers and they were happy. You can make a thing. And this also goes back to that storytelling aspect that's so important. Talking about our technology, it's nuance. It's challenging to talk about that to a customer, showing them a product, right? Here's what we can do. And communicating, here's how this can help you. It's super important. Cool. So we talked a little bit at the beginning about how exciting of a year it's been. What's next? Yeah. So I have to say, I mean, 2021 is dramatically different than even 2019. So all of our customers, all of a sudden, they all now have sustainability groups internally. And that wasn't a thing even in 2019. And then at the same time, it makes me really happy that we see all of this interest in climate tech and impact investing. And so for Soligen, to me, I think about the world in sort of three risk buckets. Technical risk, scale up risk, and commercial risk. And at this point in time, for our first core four molecules, we've achieved all three of those from a de-risking standpoint. So from a permissions perspective, what I'm really excited about doing next is the really exciting molecules. So not just using sugars as a feedstock. How do we use waste plastics as a feedstock? How do we use CO2 itself as a feedstock into our platform? And then on the molecule side, not just water treatment and ag and concrete. How do we start making really value add materials like bioplastics? Very cool. And so give me some sense of the scale of production now and then where the scale of production might be in two to three years time. Yes, so now we've shipped, we're just shy of shipping 100 million pounds of material this year. And the scale of production for the core plant, so not the blending assets, but the core plant, is a 10,000 tonne prior first commercial plant that offsets and sequesters over 30,000 tons prior of carbon dioxide equivalents. It's the first plant built in Houston without any air wastewater emissions as well. And so for us, the global supply chain crisis is obviously a crisis. It's very good for Soligen because it's onshore manufacturing in the US. And so in the next two to three years, I hope to have over 60,000 tons per year of production capacity online with over 100,000 tons per year essentially in late stage procurement and construction. That's very exciting. It's been incredibly exciting to be a part and be able to support you since the beginning or so grateful that you chose to bring us into this journey. Soligen actually has an opportunity to make 90% of the molecules made in the chemicals industry but in a completely carbon negative, completely safe way. And so any company that can sequester carbon and get a monopoly potential on a multi-trillion dollar market, that's pretty exciting. So I'm incredibly excited for the years ahead. Yeah. Round of applause to this man over here. Hey, thank you for having me, Slush. It's been great being here. I love how stinky.