153. Ghosts of Biotech Past: Veronica Breckenridge’s Playbook for Smarter Scaling

Ep. 153 Veronica Breckenridge TEASER

Veronica [00:00:00] it's much more important to think about all the partnerships that you could build and leverage people's strength to get there and not try to do it all by yourself.

[00:00:09] INTR O

Veronica [00:00:13] Hey rum. Welcome to the Grow Everything podcast. What's going on in your world?

Erum [00:00:17] Oh, Carl, spooky season is [00:00:20] upon us. I am living my dream. I love Halloween and the fall season. How about you? Are you getting ready for Halloween or dressing up?

Karl [00:00:29] I don't [00:00:30] think I'm dressing up, but, my wife and a bunch of her friends are going as band books, so I may rally.

Karl [00:00:35] I think the plan is to go to the, village, , parade, the West Village Parade, which is [00:00:40] a huge deal, , in New York City. And, , if I do go and I do rally, I plan to go as Catcher in the Rye, which is a band book. So that's kind of my plan.

Erum [00:00:48] Oh, wow. Look at me. at me. How about you look at me living in my bubble?

Erum [00:00:49] I did [00:00:50] not know Catcher nor I was band book. I had to read that for school. That was weird.

Karl [00:00:54] Yeah. Well, you know. Youth Rebellion is, banned in many places and, , I [00:01:00] think, you know, the main character hires a prostitute at the end and he's underage So I think there's a lot of things in there that are just, you know, potential for banning.

Karl [00:01:08] Yeah, I totally missed that part

Erum [00:01:09] of the book [00:01:10] when I was younger. Should go back and read it. Yeah. Yeah. I think I should. I did go back and watch Willy Wonka and The Chocolate Factory with my son. Which is an amazing Halloween [00:01:20] movie 'cause it's so imaginative. People are, you know, wearing different, I mean, in the movie that's their uniform at work.

Erum [00:01:26] But the Umpo lumps have a outfit and the music, everything's so [00:01:30] imaginative. The first Willy Wonka, there's been other ones, but this is the one with Gene Wilder, , made in the seventies and. I rewatched that and I was like, oh, there's so many things that I missed [00:01:40] again. And now that I'm older and have experienced, I'm like, wow, this is incredible.

Erum [00:01:44] Like what? Incredible piece of work. And my son loved it, which was great. Yeah.

Karl [00:01:48] do know that, [00:01:50] I don't know, he might be a little young for this, but The Twits, which is also a Royal Doll book is now on Netflix, and that looks pretty intense and great. And the Twits is such a good story.[00:02:00]

Karl [00:02:00] So he's getting to the age where, you know, he will really love those books. I was like, you know, fabulous Mr. Fox or whatever that one's called, and the magic finger. I remember [00:02:10] the kids really being into the magic finger. It's a, all of them are super short, but Twits on Netflix looks amazing.

Erum [00:02:15] Yeah, I mean, I'm definitely gonna check that out.

Erum [00:02:17] I saw some previews for that to maybe, but my son recently, you know, he's [00:02:20] been, , kind of scaring me because, you know, he's four years old. And the other day, , he came like, it was like morning time and like, you know, he came to me in my room and he snuggled with me. He was like, really calmly, [00:02:30] was like, mom, I had a nightmare last night.

Erum [00:02:33] And I was like, oh geez. I was like, oh my God, my poor little boy had a nightmare. I'm like, what was it about? And he was like. [00:02:40] I can't tell you because it's so sad. I don't want to make you sad.

Karl [00:02:44] Oh my God.

Erum [00:02:45] And I was like, what did this boy experience? And I was like, [00:02:50] and then he is like, just, he's like, I can't tell you, but, , it was a nightmare.

Erum [00:02:53] And I'm like, well, I'm like, you, you know, you can talk to me. Tell me things. If you wanna get it off your mind, just talk to me [00:03:00] about it. But I just felt so, like, there's nothing terrifying. More terrifying than children in Halloween. Yes.

Karl [00:03:04] Yeah.

Erum [00:03:05] Especially when they're calm and they like stare at you and it's like, woo.

Erum [00:03:09] [00:03:10] It's like, what's going on kids? Yeah.

Karl [00:03:11] Yeah. I mean, speaking of children in Halloweens, I rewatched, I, I probably mentioned this a few episodes ago, so the big kind of horror thriller of [00:03:20] the summer was weapons, , which I rewatched last night, which also involves children. It was super interesting to watch it again because there were details that you missed the first time because [00:03:30] you're just like on the edge of your seat.

Karl [00:03:31] Mm-hmm. But speaking about children, I mean, like, the kids are, I think, like third graders. , You know, you, the, the setup, and I'm not gonna spoil it, [00:03:40] is that the kids all disappear. These kids from one classroom disappear all but one, and then later on as the story unfolds, you're kind of watching the kid who doesn't disappear in like the heavy world that he's living [00:03:50] in.

Karl [00:03:50] And, , you know, so having kids, them being afraid, the uncertainty of the world, all those things are very scary.

Erum [00:03:56] Oh, Carl. Yeah, I, I'm getting chilled. I don't like being scared. I used to like being [00:04:00] scared. I watched all the scary movies when I was younger, but not anymore. Well, but there has been some funny Halloween things going on and I, we just had to mention this 'cause you shared this with [00:04:10] me on our chat.

Erum [00:04:11] , SNL had this skit called Snack Homies, and it was. Really young kids. There were like 12 or 13, so maybe Gen Z, gen [00:04:20] Alpha, and they were, you know, four of them speaking like Gen Z. Speak about snacks and friendship, which are two amazing topics. And like Carl, we should do another podcast. [00:04:30]

Karl [00:04:31] Yeah. And we should do it the way they did it, where they did it as a round table.

Karl [00:04:34] They had four kids around the table and then, , the guy who plays President Trump showed up and [00:04:40] got into the conversation. I think we should do something similar. Four. Four of our friends, four of our, four of our besties on grow Everything talking about snacks and food and biotech. [00:04:50]

Erum [00:04:50] There we go. That's a niche.

Erum [00:04:51] That's a niche. And especially now that we are on video more, , that's something that. We decided, Hey, look, you know, we live in a very visual world. Let's get our videos up. [00:05:00] You guys will notice that our backgrounds are changing. We're still experimenting. We're the best places. Paul and I right now are in separate places.

Erum [00:05:07] But why not get together? Let's [00:05:10] see. You know, let's vibe out. Let's vibe out in the podcast. So just, you know, just keep patient with us, stay patient with us, you know, enjoy the difference right now, but then we'll get more consistent hopefully in the future. So, , stay tuned for that. What else, what [00:05:20] other spooky things?

Erum [00:05:20] We have an exciting episode coming up before that, you know, let's, , talk about what's been going on.

Karl [00:05:26] Well, it's funny 'cause you had put into the notes, you know, is a [00:05:30] zombie apocalypse possible? I dunno. And, , you, why, why were you asking that question? Just because it's Halloween.

Erum [00:05:35] Yes. But it's always, it's been in my mind, it's something that I talked to my friends about at parties [00:05:40] and actually one of my friends brought it up and they were like, if a zombie apocalypse happened, like right now, you just got an alert on your phone and it said.

Erum [00:05:47] Head for the hills, what would you do? [00:05:50] And I'm like, oh my gosh. And it's like, it's always, it's this thought experiment. We all talk about what we would do. And then I was like, all right, lemme just ask chat to bt. Like, is it possible to have a zombie apocalypse? 'cause [00:06:00] then maybe I should prepare for it. And it said no at first.

Erum [00:06:04] So chat to BT said no at first. But then it was like, well there, there are these different possibilities [00:06:10] for, , you know, different organisms. That could like cause a, an apocalypse. So let me just, or zombie-like effects. So let me just pull it up really quick.

Karl [00:06:11] Well, that's the, you know, zombie-like effect is basically the storyline for the last of us.

Karl [00:06:15] You know, it's like a fungus that makes people attack each other and that is like a [00:06:20] zombie apocalypse, you know, trope. But go ahead.

Erum [00:06:22] Yeah, well that's what it said. It said there's, , you know, I guess four possibilities. It said like rabies, you know, could, , induce zombie-like behavior. , [00:06:30] And then the Toxoplasma Gandhi.

Erum [00:06:32] So that's what's, , makes, , rats lose their fear of cats and then Oh wow.

Karl [00:06:37] And then they, I didn't know that was real. Yep.

Erum [00:06:39] Yep. That's real. [00:06:40] And, you know, could be adopted in humans and, , mess with our behavior. And then the other thing is, like you said, the cordyceps, the fungus. And [00:06:50] then it was like, but you know, those cords, they, they don't thrive in, , human body temperature because we're warmer than insects, so it wouldn't survive.

Erum [00:06:59] [00:07:00] And it also said our immune system, you know, is too complex. We would just, you know, knock out the cords. But then I was like, well, could cortis ups evolve [00:07:10] to, you know, withstand warm bo body temperatures and the immune system? And I was like, well, yeah, I could. And I'm like. All right, here we go. I mean, like, we just gotta be careful because then, then [00:07:20] it started, then, , you know, I call it ache.

Erum [00:07:21] PT Nova Nova started telling me that, okay, well if that's the case, then you have to make sure that you know, , you know, you have a plan that you know, you know what, how to get out. And it started helping me. 'cause it was started realizing like, oh crap, like this could happen because then climate change could [00:07:30] cause these, .

Erum [00:07:30] Fungi to withstand heat. And it has happened in different environments or like, , you know, trees or other, , , organisms were getting affected by fungi that [00:07:40] previously never affected them. But these fungi then are able to withstand heat. So that's a little spooky, a little spooky Halloween thought experiment for you guys.

Erum [00:07:48] I just wanted to [00:07:50] put that, put that out there. And I do have a plan, but maybe we can talk about that later or. Call us, write to us and let us know. Let us know. Do you need a plan to [00:08:00] survive the zombie apocalypse? Download this PDF, send us your email address.

Karl [00:08:05] Yeah, I mean, you know, I think zombies go in and out of being trendy.

Karl [00:08:09] [00:08:10] Walking Dead had made it popular 28 days or 28 years later. Just came out.

Erum [00:08:15] Yeah.

Karl [00:08:15] , And I think I always am like, what does this reflect about our society? You know, [00:08:20] because. The zombie apocalypse is like a metaphor for societal breakdown, economic uncertainty. And , you know, I watched this movie that just came out on Netflix [00:08:30] and I think it was a number one movie this weekend, house of Dynamite, which is really about, , you know, a nuclear attack from an unknown source in the Pacific.

Karl [00:08:39] It was pretty [00:08:40] scary. I mean, but I ha I have to say it was like very tense. It was very well done, but at the end of it, I was just like very dissatisfied with the ending. I just didn't, I I, it just didn't vibe for me. And I think that looking at the reviews afterwards, I saw that that was the response that a lot of people got.

Karl [00:08:48] , And Catherine [00:08:50] Bigelow, who has directed a lot of movies, the Hurt Locker, among other ones. I think she's a very good director, but for some reason this one just didn't work for me at all. Hmm. , Well that's

Erum [00:08:59] your, but anyway, that's your [00:09:00] movie review segment of the Grow Everything podcast. Oh,

Karl [00:09:02] man, I've, I watched a lot of movies this weekend.

Karl [00:09:05] I don't, I, and I, and it wasn't like I was at home, but it was just like I turned things on and then the next thing I [00:09:10] know, the movie's off or done. , But anyway, you know. But you know, in other news, I don't know, did you see the Beyond Meat Stock Runup last week?

Erum [00:09:17] No. What happened?

Karl [00:09:18] So Beyond Meat [00:09:20] went from something like 52 cents to over $8 and 85 cents.

Karl [00:09:24] Wow. Like a 16000% gain in four days. And , you know, I think it was a [00:09:30] target of meme stock traders. I don't think it's at that point anymore. But, , the re you know, it resulted in like incredible volume of shares over just a few days, and that always [00:09:40] is like, you know, zombie trading.

Erum [00:09:43] Oh, there we go. Is what it

Karl [00:09:44] reminds me of.

Erum [00:09:45] Bring it back to the Halloween theme. Oh my God,

Karl [00:09:47] I'm bringing

Karl [00:09:47] it back to h Halloween and, , and, , bring it back to Halloween. And zombies.

Erum [00:09:49] [00:09:50] Yeah. Well beyond Meat, I mean, they. Do they have, do they use heme? I know Impossible Burger uses heme, so they have to, you know, bio manufacture that I believe so. [00:10:00] I don't know if Beyond Meat has a biotech angle, but

Karl [00:10:03] No, they don't.

Karl [00:10:04] No,

Erum [00:10:04] they don't. Okay, well that's fine. But we are talking about biomanufacturing today. Surprise, surprise. , I'm just gonna, , so. You are talking about buying [00:10:10] manufacturing today, and I'm really excited because we had our report on reports a couple episodes ago, and one of those reports were the wait for it, the graveyard report.

Erum [00:10:19] [00:10:20] Woo.

Karl [00:10:21] Perfect. Report to talk about, , in in, in the perfect report to talk about Halloween week.

Erum [00:10:23] Yes, yes. It was perfect. We're like, we have to talk about a, I wanted to dig in deeper because it is about. [00:10:30] Failure of certain companies or certain industries of trying to leverage Biomanufacturing to replace petrochemical based products, you know, [00:10:40] biofuels, specialty chemicals.

Erum [00:10:42] And it was, we wanted to dig in deeper because it's like, okay, we learned lessons. When you have failure to learn lessons. And [00:10:50] our friends at First Bite, Veronica Breckenridge, they great. Wrote a great report. Being able to highlight not only what has happened in the past, but what are some solutions for the future.

Erum [00:10:59] And we wanted [00:11:00] to dig the grave deeper in the graveyard report. So, , why don't we quickly do an intro. Carly, you wanna share some information for our listeners?

Karl [00:11:06] Sure, absolutely. So we have had, , [00:11:10] Veronica Breckenridge on the podcast before. She introduced us to First Bight and their, , fund, they're focused on helping companies scale.

Karl [00:11:18] So if you're a startup [00:11:20] that maybe has gone through an incubator and accelerator and you have some funding, but you're still unsure or uncertain about how to scale, , first by would be a place that I would be looking at. And I hope Eric, , I [00:11:30] hope Veronica, you don't mind me characterizing you guys that way.

Karl [00:11:33] So when the graveyard report came out, we were very excited about it. We ended up reporting on it in our report on reports, as you mentioned, rum. [00:11:40] And so now we're gonna just let, , Veronica talk about the report itself.

Erum [00:11:44] All right. So let's get started on this spooky but formative episode. INTERVIEW

Erum [00:11:49] [00:11:50] Veronica Breckenridge, welcome back to the Grow Everything Podcast. Hello.

Veronica [00:11:55] Hi. It's great to be back.

Erum [00:11:57] Yes, yes. Oh, God. We had to have [00:12:00] you back because we just did this report on Reports episode where we were talking about all these Bioeconomy Biomanufacturing reports that came out and talk about [00:12:10] various different perspectives, whether it was how much money was being put into the industry, the new types of.

Erum [00:12:16] Innovations that been happening, , just global perspectives and [00:12:20] sometimes coming from, you know, management consultancies. So Capgemini, McKinsey, they've all can dabbled in this, but your report by far has been, I think, the most [00:12:30] eye-opening because it's titled the Graveyard Report, you know, industrial Bio Manufacturing graveyard Report.

Erum [00:12:35] and because tis the season of Halloween. We wanted to talk about it. [00:12:40] 'cause failure can be a scary thing, but it can also be a very valuable thing. So thank you again for coming on the pod.

Veronica [00:12:46] Oh, it's a pleasure and like I completely [00:12:50] agree. I think, , part of the reason we named it the Graveyard, in fact, we had an internal debate whether we should because, , some people were saying, well, would that be too gloomy for this [00:13:00] industry?

Veronica [00:13:00] 'cause we're trying to get people more excited. I said, well, there's a benefit to know what you, mistakes that you made. Hopefully they make us [00:13:10] wiser and better at pursuing it now.

Erum [00:13:13] Yes, absolutely. And I'm sure you've seen this because your background spans a lot of different, you know, tech heavy [00:13:20] industries and you've worked with Apple, you work with Tesla, and now you're in Bioindustrial investing.

Erum [00:13:24] So I. First before we get into this report, and for those that haven't listened to your previous [00:13:30] podcast, which we encourage everyone to do, your previous episode when you were on the Grow Everything Podcast, can you tell us what pulled you from scaling tech companies to trying to [00:13:40] resurrect the future of bio manufacturing?

Veronica [00:13:42] Yeah, I mean the, story is actually really interesting, but for me, because I've been through so many really huge transitions. [00:13:50] Being at Apple, where it was transitioning to a mobile, , world, from, you know, a fixed line world into my communication and Tesla, [00:14:00] basically electrification of the, , , transportation.

Veronica [00:14:03] So, , I had identified a number of key points where inflections happen, which is where value [00:14:10] gets created. one of the single most important thing is a structural. I would say inefficiency that you can identify and when you look at [00:14:20] these technologies, enabled you to capture that. Right. So I was, , this was back in 2020, I got to meet Ginkgo [00:14:30] Bioworks and, and I have to say early days, really Ginkgo taught me a lot about what's happening in synthetic biology and with biology in general and [00:14:40] the structural.

Veronica [00:14:41] Sort of inflection point I would say is I had not realized how much cost has, , and speed that biology has been improved, right? [00:14:50] 3 million times in term of costs in the last 25 years. . And then in term of accelerated, , time, right when the first time we sequenced the human genome took [00:15:00] I think something like nine or 11 months, some people say it's, even longer, two years.

Veronica [00:15:05] , 'Cause it depends on how you count when you start it. But now it literally [00:15:10] takes. Just a few hours. So these acceleration are exponential. They're faster than Moore's Law. That's created the economics of becoming much more [00:15:20] attractive today using biology than ever before. Right. So, so, and that continues.

Veronica [00:15:24] Down. We have AI and all these to accelerate. So for me, that was the [00:15:30] transformation moment to realize how fast and how quickly we can iterate biology and therefore something is going to be created. Because of [00:15:40] this inefficiency. The second thing I think talking with Ginkgo made me quickly also realize is, and this is where it is different in [00:15:50] scaling this industry and where my industrial bioengineering comes in.

Veronica [00:15:55] Scaling this is a lot about manufacturing. In fact, [00:16:00] us the scaling is from lab to actual manufacturing is really critical for commercialization success. That has been something that has been not as [00:16:10] well understood or done prior. And, , part of it is because really pharma was just, , , you had a lot of margin to explore, [00:16:20] so you had latitude to, fail and try it many times.

Veronica [00:16:24] , The second is because a lot of these scientists simply, they are scientists. That's why they, [00:16:30] they've never seen the manufacturing environment, so they don't know how to. I really scale. So scale. That was something I identified also as an issue with this [00:16:40] industry and the failures. And part of the reason I found love for it is that, you know, it happens, there's structural inefficiency and it's [00:16:50] something I actually know something about as an industrial engineer and someone who worked with a lot of manufacturing companies.

Veronica [00:16:57] This I know how to solve.

Erum [00:16:59] [00:17:00] Yeah, yeah. And that's great. 'cause like I. We oftentimes on this podcast bring on entrepreneurs or investors that come from other industries, and it's, a beautiful thing to see how they can take the learnings [00:17:10] from one industry and bring it to another. And yes, via manufacturing, of course, it's been around beer, yogurt, kombucha.

Erum [00:17:16] Okay. But now with all these tools to, you know. don't even wanna use the [00:17:20] term like, throw fuel on the flame. That sounds really, , dark. But this is a Halloween themed episode, so that's fine.

Karl [00:17:26] yeah, I mean, this is so great, , to hear your perspective.

Karl [00:17:29] , [00:17:30] Veronica, the industrial Biomanufacturing graveyard. It's a fitting haunting title, and it's accurate for our Halloween episode. But what does this exactly [00:17:40] mean?

Veronica [00:17:40] My personal view is, I hope most of the startups will really read it.

Veronica [00:17:47] 'cause one thing you learn, and I think [00:17:50] last time we ended, it's not the technology that wins, right? It is 80%. And even in our study, more than 80% of these companies fail is not [00:18:00] because technology. It really isn't right. It's their go to market, it's their commercialization path. It's about scaling, , in terms of being CapEx efficient [00:18:10] and understanding.

Veronica [00:18:10] How do you plan out that CapEx. So it's about delivering a profitable business. one of the things I hope more founders will [00:18:20] recognize, either they have to learn it because they are scientists, they never learn how to run a business, or they need to. Expand their horizon to figure out [00:18:30] how to be a leader and actually build a much broader team, or in some cases maybe set back, , let other people run the business, right?

Veronica [00:18:38] So if you don't know [00:18:40] something, understand your limitations. Understand how you can collaborate in academic, that's not something that natural comes with research. They tend to be, I own this thing. [00:18:50] They need to break out of that and in order to succeed, because there's lots of times companies didn't succeed.

Veronica [00:18:57] Pick the wrong way is because they insisted [00:19:00] on wanting to run it themselves.

Erum [00:19:02] Yeah, that's a challenge. I mean, you know, , and it sounds like that requires a lot of coaching and you know, being able to put the ego aside, which is [00:19:10] I think, challenging for a lot of people. Very challenging. Happens, you know, to me as well.

Erum [00:19:14] , But I would love to know, like, you know, was there a moment that inspired you to dig into postmortems of. [00:19:20] Failed Biotech ventures and was there a pattern that most surprised you in this exercise? Because you mentioned a few patterns, but what was the thing that you're like, all right, [00:19:30] we gotta do this because this has to stop.

Veronica [00:19:33] I think the biggest pattern I have to say, and, and this maybe something, unfortunately, I feel [00:19:40] like this gets repeated every time. It is people who don't understand how, in how they introduce technology, , which is to go after the biggest and most [00:19:50] commoditized market. I mean, biofuel was that way.

Veronica [00:19:53] Right? and a lot of big ideas. and we talk a little bit about Silicon Valley playbook and software. [00:20:00] They keep talking about the biggest market, but you know what? The biggest market is not your best market. The biggest [00:20:10] market tend to be commoditized. It's extremely cost competitive because consumers are extremely cost sensitive and , there's existing structures that already [00:20:20] optimize the manufacturing to get to that kind of efficiency and cost.

Veronica [00:20:23] New technology rarely gets there, right? Apple didn't introduce a hundred dollars phone, which is when Apple [00:20:30] introduced iPhone. That was the average. Phone cost. apple introduced a six phone, right? Tesla's first car is a $200,000 [00:20:40] roaster. and it's the same thing actually. If you look at the ev, there's, , you know, lots of EVs started with like bolt started with cheap cars.

Veronica [00:20:48] That isn't never the [00:20:50] right strategy. Introducing a new, technology and new manufacturing that requires. A lot of experiment experi, and which means you wanna [00:21:00] find lucrative markets and higher price market. which is why, you know, biomanufacturing in pharma or drug production has been successful is actually being [00:21:10] more and more adopted.

Veronica [00:21:11] , if you look at all the, , pharma players, they're all expanding bio manufacturing capacity already, right? Because it's profitable when it makes economic sense. [00:21:20] Everybody's gonna go after it. In fact, , I was talking just recently with someone who, , commercialized Bio BDO and, , successfully from DuPont, [00:21:30] and that was the whole thing.

Veronica [00:21:30] He said the, story when they looked at it was bio was the most economic pathway to get to what they wanted, and that's why it made sense. Now [00:21:40] they're very, very successful. So it's very, very important to find lucrative markets so that you can actually build a [00:21:50] business.

Karl [00:21:50] So you would say that, you know, , going after the biggest opportunity is a red flag. ,

Veronica [00:21:56] When your cost structure or that technology is not [00:22:00] mature to the point, and obviously, you know, software was cost so low. Now you do wanna go after the biggest market, but it's timing. When do you go after the [00:22:10] big market? What kind of risk you are taking? So you need to actually understand the risks that you're taking.

Veronica [00:22:17] And taking too many risks [00:22:20] all at once is not a good idea because you're not gonna execute well.

Erum [00:22:24] So. In this report, you've documented three occurring market fit errors. So let's dig into that a little bit. [00:22:30] So underestimating manufacturing costs is one, two targeting commodity markets instead of profitable niches is two, which you just mentioned.

Erum [00:22:38] And then three is [00:22:40] overestimating adoption without supply chain validation. So which of these is the most suc, seductive trap for founders and why?

Veronica [00:22:48] I think I'm gonna repeat myself. I think [00:22:50] going after the biggest market because the people are trained to think, oh, I'm gonna pitch how big the opportunity is.

Veronica [00:22:57] Right? That is one of the most seductive ones. , [00:23:00] But I'll mention another one that I think is one of the reasons why they underestimate manufacturing, which is people forget, this is one of the [00:23:10] reasons I moved to Houston. People forget how important downstream is. Most of the biology, 'cause a lot of these scientists are biologists.

Veronica [00:23:19] They [00:23:20] go figure out, oh, I can get the biology so cheap and I have this high concentration of this thing. So it should be pretty easy to [00:23:30] get it out without really looking at understanding that full process cost and understanding what is the downstream that's actually required. And there are also [00:23:40] sometimes even the impurities in your.

Veronica [00:23:44] Or in whatever is important for downstream manufacturing, [00:23:50] if you have impurities that they don't know how to handle, it is very difficult to be adopted. Those are things you don't learn unless you understand [00:24:00] manufacturing, unless you understand that downstream. So. Those are skillset, I think, , it's generally missing and not being [00:24:10] thought through and which is one of the reasons I'm here in Houston, like I said, because guess what?

Veronica [00:24:15] There's a concentration, probably the highest concentration of downstream process [00:24:20] engineers here in Houston, and they could really partner. With the biologists and make it commercializable. And I think that that's one of the [00:24:30] biggest gap that we need to fill to also successfully commercialize industrial bio manufacturing.

Karl [00:24:37] Yeah, I agree. Now, you had mentioned, and [00:24:40] you right about this in the report, the fact that, you know, Apple's iPhone, when it came out it was a $600 phone compared to Nokia's $100 phone. You [00:24:50] mentioned that Tesla. Tesla started off with a Roadster, very high-end product. These are not commodity plays and we have heard, you know, [00:25:00] of companies that they're, they try to go after that same kind of strategy, you know, go after the niche, the high end. But how do you think bio-based material company should think about that [00:25:10] luxury entry point before going after mass markets?

Veronica [00:25:13] I think, , there's also another philosophy that I kind of subscribe to is, [00:25:20] as we talked about risk, we are much more interested in higher value replacement of existing. So, , more we call drop in chemicals. [00:25:30] Then, , really novel chemicals that are higher value. The reason being, as I mentioned, the supply chain [00:25:40] to it integrate a novel molecule in terms of going into final product is actually challenging, [00:25:50] and that requires a lot more engineering and know-how into incorporate a new molecule into the downstream.

Veronica [00:25:58] Even more downstream [00:26:00] into actual products. , And that often is a very, very long time, and it could take 20 years to commercialize a truly novel [00:26:10] molecule incorporated into products you're in. So instead of doing that, really working on dropping chemicals, higher value of chemicals that [00:26:20] right now, like for instance, in personal care, we're seeing more and more demand for bio-based ingredients.

Veronica [00:26:26] The government is banning, , petroleum-based food diet, [00:26:30] so in food ingredients and other things. Now, , there's opportunity to look at those existing markets where you could have [00:26:40] a bio solution. That could be even more cost competitive as well as better for human health. And those are our markets, I think are more lucrative for people [00:26:50] to look at as a initial market to go after.

Veronica [00:26:53] And then as they validate their technology and understand, and in industrial engineering terms, we call it, [00:27:00] when the process is in control, which means you understand your manufacturing process, now you can, you're ready to scale to the deck scale.

Erum [00:27:08] Yep. And let's talk about in this report [00:27:10] that. You flag CapEx overrun.

Erum [00:27:13] So spending all the money and then scale up failures. That have buried many of these promising companies. [00:27:20] Right. how would you advise startups to start small and prove big without falling into the capital trap?

Veronica [00:27:27] Well, this is where like, I think, , very different [00:27:30] from scaling software. , The playbook here and just like, think about building a house, like that's what I like to use an example, right?

Veronica [00:27:38] , You do not wanna build your [00:27:40] house when you don't have. All done your wiring, your, , every, almost every part of the house already engineer before you start [00:27:50] building because you know how expensive it would be later on to try to change it. And this is where scaling these type of technology is very different.

Veronica [00:27:58] 'cause the [00:28:00] manufacturing of it is not something you could, I proved that I could do kilograms. I'm gonna now do hundreds of thousands of tons and build a plant on it. It's [00:28:10] not. It doesn't work that way. , Like software, we can just throw it on. So there's a lot of knowhow. [00:28:20] Built and thought through and tested.

Veronica [00:28:23] So, you know, it's hard to know what you don't know, but at least you know the risks and you have a good [00:28:30] handle on what might be the risks of having a mitigation plan. And this is where I do not encourage startups to try to build their own plant when many of the [00:28:40] failures was because these startups were trying to build their own plant.

Veronica [00:28:43] I think it's much more important to partner. With someone who knows how to build a plan, who built [00:28:50] plants before. And that commercial partnership is really important. This is also why we believe working with a corporate to start at that [00:29:00] process. And we have a portfolio company, , that already announced a partnership with a large chemical player that they will be the people to build the.

Veronica [00:29:09] Plant, [00:29:10] they'll license the technology. So there are some alternative arrangements or partnership that you could look at. To work with existing players, first of all, [00:29:20] and in addition, you de-risk the construction. You also de-risk your capital because with large players now you have other ways of [00:29:30] financing that plant.

Veronica [00:29:31] Because large players usually are public companies or much more credible bankable companies. They can access much cheaper capital to build it as [00:29:40] well instead of equity. So equity doesn't have to take on the risk. Those are things I think. It's really important for startups to think through how, instead of [00:29:50] thinking about I'm gonna do everything, you, and in fact you mentioned it, this, it's much more important to think about all the partnerships that you could build and leverage [00:30:00] people's strength to get there and not try to do it all by yourself.

Karl [00:30:04] Yeah. I, I couldn't agree with you more. And I mean, I think we're seeing it, , we're seeing more of this because there is [00:30:10] more opportunity to partner, particularly on the bio manufacturing side. Maybe early days that wasn't as easy as it is now. And , as you said, corporates, you know, are probably more willing to [00:30:20] do those kinds of partnerships and maybe take on some of the costs, , you know, that is associated with building a bigger facility.

Karl [00:30:25] Now this is in stark contrast to Silicon [00:30:30] Valley's, you know, fast moving low CapEx model, which doesn't work for Biomanufacturing. What's the alternative? How should patient capital be structured for these deep tech capital [00:30:40] intensive ventures?

Veronica [00:30:43] , I think there are three things for them to think about. One is the, because the scaling is [00:30:50] very different. It's not kind of a smooth curve, it's more of a step function we built. Test and then we get to this scale. Now we can [00:31:00] replicate a plan at this scale. To get to the next scale. We need to take some time to plan it and test it and make sure we're okay.

Veronica [00:31:08] Then we plan it, then we [00:31:10] build it. So it's much more of a staircase kind of growth. , It's important for capital to understand that. Understand in that [00:31:20] staircase, what are the risks that you're taking out? Not to say the top line's, not the top line revenue, but it's the risk you're taking out in, in [00:31:30] that when it's flat on the revenue, but that those steps you're taking, so you're prepared to get onto the next.

Veronica [00:31:36] Step up step, , step up. That's one thing. Second, I [00:31:40] think, , it's also thinking about how do you create, as you derisk, how do you really leverage capital variety of sources of capital, [00:31:50] right? There's, , as we talked out, there's asset. Because we're building asset, therefore you can actually access leasing arrangements or , [00:32:00] project finance if you have offtake agreements.

Veronica [00:32:02] Those are all non-diluted fundings. Don't just think equity, equity is one of the sources. A lot of [00:32:10] other sources of capital you could. Leverage and partner with other people. And the last thing, actually, it's kind of an interesting one, that we [00:32:20] are in a point of in time we talk about America, is about making things again, where Industrial Reindustrialization of America there is [00:32:30] actually increasing government funding and especially from DOD and four of my portfolio companies are actually, , have some DOD level [00:32:40] funding.

Veronica [00:32:41] That we are wanting to have domestic capacity on these strategic chemicals. So I think there is, , opportunity to leverage that, [00:32:50] those undiluted dollars from a government as well. There's an opportunity to deploy significant capital, create that economic case in terms of [00:33:00] work drops and economic development argument to access those and used to be hard.

Veronica [00:33:06] And, and a lot of people prefer not to get government because [00:33:10] you're actually ENC converted by this and that. , But that happens in research. But in these CapEx type of, , credit vehicles, this could be really [00:33:20] accelerating the growth and, and actually de-risking the equity capital. , So I think that's a really interesting source to work with

Erum [00:33:28] government.

Erum [00:33:29] [00:33:30] So let's talk about this report again, because I really appreciate the fact that I had. Varying perspectives and it could be helpful to different people from founders, [00:33:40] biotech innovators, people that look to purchase biofuels or specialty chemicals, platform chemicals, and , and of course investors, right?

Erum [00:33:49] There's investors that are [00:33:50] very interested in getting into this space and. They, they have capital and they wanna spend it. And founders themselves wanna be able to bring along the right [00:34:00] investor. So the report talks about the need for smart money, which you mentioned earlier. , So smart money investors who bring more than cash.

Erum [00:34:07] So what distinguishes an investor [00:34:10] who really supports a company from one that accidentally writes its obituary? Still sticking to the Halloween theme here.

Veronica [00:34:17] I like to think, , one of the things, , I. [00:34:20] Like to kind of make an analogy, right? It's like in sports we have baseball, football, , soccer, they're all sort of sports, right?

Veronica [00:34:29] [00:34:30] But the playbook is very different in terms of how you play, right? And venture is the same thing because it's different tech. So it's really important, I think, for [00:34:40] this particular space, for people who understand how manufacturing scales. Not people who scaled Ali [00:34:50] software because it, like I said, it's very different from scaling software and it's also, I think, , really important to [00:35:00] understand.

Veronica [00:35:01] Silicon Valley, there's a thing about velocity and pivoting and, and thinking that's like a huge advantage. I don't debate [00:35:10] that velocity is important because you wanna see execution, but the type of velocity that we're talking about, , as I had mentioned, right, it's about. [00:35:20] What risks are you taking out in some cases?

Veronica [00:35:23] Is that velocity in revenue or velocity? How quickly you pivot because if you didn't think [00:35:30] through, like we said, building that house and every time you pivot, it's a very expensive pivot in hardware. So, , you know, we say, you know, , if you [00:35:40] plant it well actually, . The execution will be a lot smoother, so sometimes it's about taking the time.

Veronica [00:35:48] And that's where you don't press [00:35:50] for velocity on maybe what's visible, but making sure, helping them to de-risk so that when they execute it's smooth and [00:36:00] then, then you are actually using that capital much more efficiently and , it actually creates better return.

Karl [00:36:07] You know, before I ask the next question, Veronica, I want to pick up on something [00:36:10] you said, because you said you, I I, I'm not gonna summarize it the right way, but you said something about hardware.

Karl [00:36:16] Do you think that like, , is, is, you know, this kind of [00:36:20] biomanufacturing more analogous to hardware manufacturing than it is, , pharmaceutical manufacturing? Is that an analogy that maybe needs to be made?

Veronica [00:36:29] I think [00:36:30] so. And I, I think it's, , I mean. Pharmaceutical, , is different in the sense. I, I would say it's more analogous to maybe, , [00:36:40] large scale manufacturing because we are talking about.

Veronica [00:36:43] Hundreds of millions of tons. And we're not talking about just a few thousand tons, right? Pharmaceutical, one of the nice things about [00:36:50] pharmaceutical, I think we did a rough back of the envelope to inoculate everybody in the world like COVID. , 13 billion people, 13 billion [00:37:00] shots, three shots of a person.

Veronica [00:37:02] It's, you know, you're talking about a few thousand tons of vaccine. That's it. A couple thousand tons. You don't need a whole lot of material, [00:37:10] but the, the, the type of chemicals and things that we're talking about, you're talking about at least hundreds of thousands of tons, if not ultimately these commodities we're [00:37:20] talking about hundreds of millions of tons, right?

Veronica [00:37:22] So the order of magnitude's much, much more different. And when you get to that kind of word of magnitude, the [00:37:30] manufacturing excellence and efficiency becomes, , very, very important. And, , and designing a manufacturing, , plant, if you will, , or process [00:37:40] for that kind of scale is a science on its own.

Karl [00:37:43] Yeah. , It's super interesting, like, I think the analogy we've heard is that all [00:37:50] biopharmaceuticals, you know, wouldn't even fit. An Olympic sized swimming pool, like that's the volume, and yet the value is like orders of magnitude. You know, [00:38:00] it's like $600 billion. It's some enormous number. , So volume is what makes it interesting.

Karl [00:38:05] You know, you're using very small amounts of these proteins or therapeutics, and yet the [00:38:10] value is so great and industrial biomanufacturing is very different. So failures which the report talks about can feel like ghosts [00:38:20] that haunt founders. , What are some of the specters of the past that you still see lingering in biotechs or investor decks?

Karl [00:38:29] Are founders [00:38:30] learning from the graveyard or do you think they're still repeating the same mistakes?

Veronica [00:38:34] I think some founders are starting to learn. , There are definitely still that [00:38:40] I'm seeing a general. Less so. I mean, people are, are moving away from a general platform to say, my molecule can [00:38:50] do everything right.

Veronica [00:38:51] They are starting to focus on what is the market and the value that my technology can help. So we're seeing some [00:39:00] changes in that and people starting to drop that platform idea and realizing that's not really a good pitch because that means. You don't [00:39:10] know what you, what you can do with your technology, actually, , the, , the, the challenge that we're seeing is still, I would say the downplaying of [00:39:20] DSP.

Veronica [00:39:20] I still see that quite often people say, oh, I can get biology to work, and, , they don't, they, they're still not thinking through the full [00:39:30] downstream, underestimating the cost of that. There is still a lot of, in terms. Especially from lab to manufacturing, because part of it is [00:39:40] they, , we're seeing people trying to improve the technical economic analysis.

Veronica [00:39:44] , But building a plant and when you have a plan, you have insurance and other things that [00:39:50] needs to be incorporated into those analysis that. Basically when you're a lab, you don't need to think about, those are tend to be things that still overlooked in their, even in their [00:40:00] technical economic analysis.

Veronica [00:40:01] So the, , there are still things like that that's un, that basically underestimates the actual competitiveness [00:40:10] of the technology when it turns into a commercialized product. , We're seeing it's, it's getting better, but , , it's not quite there yet, I would [00:40:20] say. . The, , last thing, like I said, there's still quite a bit of mentality that I see, and this is talking about people again, is that.

Veronica [00:40:28] I build it, they will come. [00:40:30] And that just isn't going to work. Right? And you have to work with other people and not recognizing that ego problem, I think [00:40:40] is something we really need to work at. , For a lot of these founders to understand, you need to build a team and where they're not [00:40:50] good, how to build a team that's complimentary and then helps them to expand.

Veronica [00:40:53] It's not about. Focusing on the technology, it is about how do you build the right [00:41:00] partnerships? How do you, do you risk the scaling that's gonna make you successful? And so you don't ha, it's one men show is not gonna be [00:41:10] what's get funded and they, you know, I have founders who points, oh, that they don't have the right technology raise, raise this much money.

Veronica [00:41:16] How come I have a better technology? I can't raise them. Well it's [00:41:20] you. It's just that simple, right? Because you can't build a team and so nobody believes that. You know, even in, we use sports and it takes a team. We need a pitcher, [00:41:30] we need a, you know, baseball, we need, we need the base. Second baseman, shortstop, we need catcher right there.

Veronica [00:41:36] There are different roles on the team, and if you can't build a team, [00:41:40] you're not gonna be successful. We can't win baseball with just a pitcher.

Erum [00:41:45] Yeah. Yeah. I, I love that. I think it's something that we see too. , You know, a company is [00:41:50] people and you know, your team is your, your internal team. But you look at the team as you know, there's external team members, like you're saying, like the strategic partners.

Erum [00:41:58] Look at your customers, a part of your team. They're the [00:42:00] ones who are going to be using your product. They're the ones who need it to be a certain way in order to love it. And so, . So I just love that fact that you're pointing that out. , You know, it's not, it's not just technology is [00:42:10] the, it's not the the thing that's doing the sales, right?

Erum [00:42:11] It's, it's people and how you position it. I mean, that's what we talk a lot about, , at messaging lab. , But I will say that this report wasn't all doom and gloom. [00:42:20] Yes. Even though there are some challenges, you know, and that there has been, you know, these failures, quote unquote, , in the graveyard. , The report really ends on optimistic note.

Erum [00:42:29] It says, you know, [00:42:30] there's no better time to invest in industrial biomanufacturing. So, so can you tell us like what makes this moment. Different from the hype cycles that have filled the graveyard [00:42:40] in the past, and how do we ensure that this wave doesn't end up as graveyard 2.0? Hopefully we're not writing another report next year.

Veronica [00:42:48] I think there's three fun [00:42:50] fundamental changes in the market that's helping us. We talked about the cost and the speed, and so the cost is even lowered from the last two decades, right? And then it's [00:43:00] exponential, so it's not just, you know, a few, , it's not even 10 x, we're talking about a thousand x.

Veronica [00:43:06] Things like that. So that's one so the cost is coming down [00:43:10] the second thing I think it's really worth noting is. i think green Premium as we talk about it, doesn't exist and I, I would argue health premium does exist, [00:43:20] so increasingly consumer are becoming more aware of all these chemicals, microplastics, forever, chemicals. All the [00:43:30] negativism associated with petroleum based chemicals, even the government starts to take action.

Veronica [00:43:35] Right? We we're looking at rfk, starting to talk about make America [00:43:40] healthy again, and so we're gonna ban petroleum based food die. So the industry is going through a a, a consumers going through a [00:43:50] recognition that. For my own health own, I want choose a healthier alternative, and that's a bio-based alternative that could be better for me.

Veronica [00:43:59] So [00:44:00] there's a demand in the market and there is a premium, actually. In fact, more and more people I talk to are looking at the labels and start to say, well, there's too many things I can't [00:44:10] pronounce. I don't wanna buy it. , So that is happening. So you have prices, actually. You have a market that's demanding it before.

Veronica [00:44:18] I think we're trying to create a green [00:44:20] market for people to want it. Now there is a market, the consumer actually want it, and there's increasingly more people willing to pay a premium for it, and the cost is [00:44:30] coming down. So now there's an economic case. It's actually a profitable market and we are seeing, , niche players who are leveraging this [00:44:40] biopolymer and they're profitable.

Veronica [00:44:41] They're growing. So now capital at the end of the day is looking for returns. So it is now actually [00:44:50] profitable to enter this market. And finally, like I said, I think we as a country start to realize. We need to make things make, [00:45:00] because if we don't, we are at the mercy of some countries that are not very friendly to us, that we could have serious issues.

Veronica [00:45:08] Right? Over [00:45:10] 50% of the chemicals are produced by one country, and we all know what that country is, and that's not a friend of ours. So, , I think there's increasing [00:45:20] awareness that we need to, for supply chain resilience, for our national security, we need to have domestic manufacturing. Guess what? [00:45:30] Who wants to bring the dirty, old petrochemical back that like creates, can carcinogen and all that kind of stuff?

Veronica [00:45:38] No, and [00:45:40] Biomanufacturing is a truly option for getting to these chemicals without toxicity. The process is not toxic, so I think. [00:45:50] Increasingly, the government, all the funding that's supporting the Reindustrialization of America is also available to further de-risk [00:46:00] some of the first of its kind plants, right?

Veronica [00:46:03] And that's gonna make it more attractive for people to take risks where capital, private capital, to unlock, to take [00:46:10] on the risk of I, I think now the general economics. A case for bio manufacturing, just starting to develop that it becomes an [00:46:20] attractive sector to be deploying capital.

Erum [00:46:23] Yeah. Yeah. And I would say like what are your thoughts about this fourth area of why we should be investing in industrial [00:46:30] bio manufacturing on the innovation side of higher performance molecules?

Erum [00:46:35] Right. We can have some novel experiences with products if they, , [00:46:40] can be, man, many bio manufactured. , I'd love for you to comment on performance too, because I, I know that you've worked with some amazing companies.

Veronica [00:46:47] , I think performance is gonna come [00:46:50] next. That's like what I, I believe it's still gonna take a little time to prove higher performance because.

Veronica [00:46:57] Like I said, higher performance, the [00:47:00] downstream takes a while to adopt. So I think it's the next, if you will, as we build the first set of these and get these first set of [00:47:10] molecules out there and, and to bio manufacture to prove that it is economically return and the next step will naturally be higher performance.

Veronica [00:47:18] And that's, that's something [00:47:20] that, you know, I kind of believe.

Karl [00:47:22] What, what do, what do you think the future looks like, Veronica? If we look 10 years? , In the future, what does a re resurrected bio [00:47:30] economy look like to you? What needs to rise from the grave to make bio biomanufacturing truly scalable and sustainable?

Veronica [00:47:37] I hope there's more. I think what [00:47:40] is gonna be really interesting is. One of the things you guys mentioned, like bio economy just becomes part of the economy that just like bio-based chemical just becomes a [00:47:50] natural part of set up. We talk about petrochemical, where we talk about chemical, bio-based chemical becomes the chemicals that we use every day.

Veronica [00:47:58] So we really, and in [00:48:00] fact there are already a lot of biochem based chemicals that we use today. It's just they're not known. Biobased chemicals. Right. And, and in a lot of [00:48:10] food ingredients in fragrances, , things like that, it's already biobased. But, , more and more we hope a lot of the materials that we use becomes biobased [00:48:20] and in, in the end that people just don't talk about biobased.

Veronica [00:48:24] They're just, these are just materials when we know, and they should be from bio-based materials [00:48:30] because they have provide humanity with the greatest benefit.

Erum [00:48:34] Yeah. Yeah, it's interesting the term bio-based, because, you know, in the world of personal care and beauty, [00:48:40] they look at like plant extracts as bio-based, but we're using it in as, you know, bio manufactured, like being manufactured.

Erum [00:48:49] And so I [00:48:50] think it's, , it'll be interesting to see on the marketing side how we navigate the difference between extracted, you know, , plant-based tracted versus [00:49:00] value manufactured. And how we educate the consumers to know the difference, because you can have a plant extract that has all sorts of things going on.

Erum [00:49:07] , I know like oak moss, , is like an [00:49:10] allergen to, people. And there are certain things that are endocrine disruptors, which is like a big thing to mention. Microplastics, people are starting to look at, , eat, , endocrine disruptors or eds, I guess is a short one for it. But, um, it's, [00:49:20] it's something that I think we should talk about.

Erum [00:49:23] As we talk more downstream in sales, , which, , we'll love to chat about with you on that front too.

Karl [00:49:29] Okay. So now , We're gonna [00:49:30] get into the fun part of the interview. , I know you've just been waiting for this. You we're gonna get into the quick fire questions here. I'll go first. , Veronica, what's one outdated [00:49:40] idea in Biomanufacturing that you wish the industry would finally lay to rest?

Veronica [00:49:44] I think biofuel, we should just stop talking about biofuel and focus our energy. Maybe [00:49:50] eventually we'll get there, but right now let's just not.

Erum [00:49:52] Yeah. Okay. Well then I'm not gonna ask the next one because I know your answer, which was biofuels, biomaterials, or bioplastics. Which sector [00:50:00] will rise? From the grave first.

Erum [00:50:01] Actually, it's a different question.

Veronica [00:50:03] Yeah. I think biomaterials could be the first one actually because, , I think people are looking for alternative [00:50:10] waste of materials that are not toxic so that they can be comfortable. We can, when we're wearing clothes or whatever, that we know it's, there's no [00:50:20] microplastic going off to the environment that's gonna go back to our bodies.

Erum [00:50:24] Yeah. Yeah amazing.

Karl [00:50:26] What's the biggest horror story you've seen in Biomanufacturing?

Veronica [00:50:29] [00:50:30] Hmm. Interesting. , I think, , I would say. There were a lot, I mean, we saw definitely in the last wave is [00:50:40] companies that went public without revenue. that I think really destroyed this industry, right?

Veronica [00:50:46] Because I think, , once you become a public company, you get [00:50:50] coverage, you get a lot of more visibility and, When you default or you become, uh,, that is not a great example for investors to look for [00:51:00] and it doesn't help the industry very much. Right. So to me, I hope we do less of that and , have more profitable companies that can [00:51:10] truly show.

Veronica [00:51:11] We can make money for investors.

Karl [00:51:13] Yeah. I wonder, I mean, sorry, before we go onto the next one, I just wonder if that's like a legacy of biopharma because, most biopharma companies that go [00:51:20] public, they don't have revenue. It's an expectation based on a pipeline. Mm-hmm. Which is perhaps a pipe dream.

Karl [00:51:27] There's, so we've come across so many of [00:51:30] them during the course of my career where it's just like, you know, man, you could have waited a little bit longer, but you had to go public.

Erum [00:51:37] Yes, yes. Yeah. [00:51:40] Yes.

Veronica [00:51:41] Yeah, I think, I think, , for, definitely for industrial bio manufacturing because the scale that we're talking about is so [00:51:50] different that you need to make sure that they overcome the manufacturing.

Veronica [00:51:55] 'cause the manufacturing is when the rubber really hits road is when you actually have a product.

Erum [00:51:59] [00:52:00] Yeah. Amazing. All right. Okay. Here we go. Two more. Here we go. All right, so one industry term you'd love to bury forever.

Veronica [00:52:08] Synthetic biology.

Erum [00:52:09] [00:52:10] Oh, alright. snap. Wow. We're gonna talk to John cumbers about that too.

Erum [00:52:13] 'cause we, okay. I'm a big fan. I'm a big fan of, , removing it or changing it. 'cause people don't, they think synthetic, they think [00:52:20] biology. Think Terminator 2. Yes, yes. TT 2000 or whatever. So,

Karl [00:52:26] yeah. Okay. If the bio industry were a monster movie, , Veronica, would [00:52:30] it be Frankenstein, Dracula, or the Blob? And why?

Veronica [00:52:33] , Dracula, because, we'll, rerise, you can't kill us.[00:52:40]

Erum [00:52:41] Unless you have garlic or sunlight

Karl [00:52:44] or a wooden steak,

Erum [00:52:46] there's a lot. Or it's very hard to kill. Yeah.

Karl [00:52:49] Yeah. [00:52:50]

Veronica [00:52:50] We'll keep coming back.

Erum [00:52:51] Yes. Yeah. We'll keep coming back. Oh, this is amazing. Oh, I loved it. , Thank you so much for writing that report. I feel like, , a lot of people needed to read it. They [00:53:00] needed to hear it.

Erum [00:53:01] And, you know, failure isn't a horrible thing. sometimes we need to see someone took a risk, someone made decisions, they tried, and we know that that's not the way to do it. [00:53:10] And so we really appreciated they took the time to look at the industry from that lens and share it with everybody.

Veronica [00:53:16] And for better and for worse, people should know Tesla isn't the [00:53:20] first electric vehicle company. It's the 27th. I think someone counted for me. , And so being the first isn't necessarily the best way to [00:53:30] go after market anyways. And failures paved the way for success. So this is why we think this is also the best time to pick because there's so [00:53:40] much expensive lessons learned now we can be so much better and smarter at attacking it.

Veronica [00:53:45] Amazing. Amazing. Yeah. And then since this is a

Erum [00:53:48] Halloween episode. Whatcha are you gonna be [00:53:50] for Halloween or doing anything for Halloween?

Veronica [00:53:51] I am actually going out with, my little niece and, , she's dressed up as a, a princess of mermaid. , So Oh, nice. We're gonna go [00:54:00] trick or treating.

Erum [00:54:01] Oh, nice.

Erum [00:54:02] That's fun. That would be a lot of fun. You can see all the candy that we should replace with. Or bio manufacturer dies at least. [00:54:10] Yes. Yes.

Karl [00:54:11] Yeah. , Well thank you so much Veronica. It's been such a pleasure to have you come back on. , We will put the report in the show notes. We've been sharing it with people.

Karl [00:54:19] I think [00:54:20] we've written about it. We think it's very important for others to read. We've mentioned. Episode, which is a report on reports, and we're looking forward to talking to you and continuing this [00:54:30] conversation. So can't wait to have you on Grow Everything again.

Veronica [00:54:33] Thank you very much. I really appreciate it guys.

Veronica [00:54:36] This has been fun. AD LAB

Erum [00:55:12] . Alright. Carl, what'd you think about that episode?

Karl [00:55:16] Veronica makes so many good points and the report I think is very much worth [00:55:20] reading. it speaks to a lot of the topics that we talk about here on Grow Everything, I think one of the big ones that Veronica mentioned is that. People still don't [00:55:30] know how to introduce their technology to the market. They often think that the biggest market is their right market. That might not be the best market. And she did make the point, and [00:55:40] we've heard this before and we've said it before, that, you know, sometimes it's better to go after the niche market.

Karl [00:55:44] The one where you can make more money like Tesla did with a Roadster. , It might be smaller, [00:55:50] but it allows you to prove your technology. It maybe allows you to create some pilots with people. And I think that that's just a welcome reminder that, people should think about.

Erum [00:55:59] , , [00:56:00] yeah, the whole idea of scaling, like you don't need to go from zero to 100, right? go to zero to 20, find that niche market, then scale to that level because that's super scary, [00:56:10] raising a whole bunch of money and then spending that money on things that.

Erum [00:56:15] You may not need. And it's like before you scale your infrastructure and your technology, [00:56:20] scale, your relationships and understanding of the market, get buyers before you even start putting steel on the ground. You know, like let's just [00:56:30] take a beat and figure out like, can we get buyers first?

Erum [00:56:34] What do they actually need? And then start scaling your technology. If. [00:56:40] Because you'll know exactly what your customers are looking for, whether they are business customers, like if you're selling within an industry or you're selling into the consumer market, you can talk to [00:56:50] people. We have all the tools, we have podcasts, we have social media surveys.

Erum [00:56:55] There's so many ways to get in front of large groups of people and making it sound easier [00:57:00] said than done. But it's also hard raising, you know, hundreds of millions of dollars. So what hard thing should someone do first? You know, that's the question.

Karl [00:57:08] Yeah, and I mean, I think it's [00:57:10] instructive to go back to the report because it also goes back to what Bill Morl had said a while ago.

Karl [00:57:16] , You know, that failure is not usually the science [00:57:20] and, , in the report, team at First Bite makes the point that 80% of failures targeted low margin commodity markets like biofuels and platform [00:57:30] chemicals. Where bio manufacturing can't compete with petroleum incumbents, at least not yet.

Karl [00:57:36] And so it's not that the science has been wrong in [00:57:40] these failures, it's just that scaling, , biomanufacturing is challenging and it's different. And so you better be scaling for the right kind of [00:57:50] end product because if you can't make a profit off it, it's not necessarily gonna be a good thing to try to scale to, you know, millions of leaders.

Erum [00:57:56] Yep. Yep, that's right. And [00:58:00] the whole idea, at least in the world of Biomanufacturing and other products, is like, there's that finished product and there are so many variables in that. And that finished [00:58:10] product, Veronica, refer to that as downstream processing. We, I mean, oftentimes in Biomanufacturing we refer to getting to that, you know, final phase that, I don't wanna [00:58:20] call it the last mile, but the last 10 miles.

Erum [00:58:23] that requires a lot of economics to be done and people downplay. It's like, all right, we're gonna focus on the first part of the [00:58:30] innovation and then we, um,, can focus on that. the rest is going to be easy when it's just, maybe it's easy, but it could be costly. So it's figuring out how to get those costs down, , which [00:58:40] something that, , you can do using a lot of tools out there.

Erum [00:58:43] , Veronica mentioned. , The techno economic analysis. There's also the lifecycle analysis to understand [00:58:50] sustainability, , amazing tools. And there's some that are publicly available. , We can link to those in the show notes. And if you're someone that wants to play around and think, you know, you have an idea and you wanna do some [00:59:00] calculations on, it's a great tool to use.

Karl [00:59:02] I would just like, end on a positive note regarding both Veronica and the report because the report does end up optimistic. [00:59:10] And you know, she says there's no better time to invest in or focus on Biomanufacturing. And at the same time, you know that we're putting this [00:59:20] podcast out.

Karl [00:59:21] The latest Chinese, you know, 15 year plan came out. And since the 1980s, China has consistently elevated the role of biotech in their five-year [00:59:30] plans. And the latest one, the one that just came out as we're recording this, really talked a lot about self-reliance and innovation, and biotech was one of the things mentioned.

Karl [00:59:39] The way it's [00:59:40] mentioned reminds me of what we talk about all in this, a lot on this podcast that, you know, biomanufacturing allows you to localize manufacturing, it allows you to be innovative. It's a [00:59:50] very high tech manufacturing, , method. It requires a certain kind of infrastructure. And, , if you're gonna distribute biological manufacturing, then [01:00:00] you have to connect those things digitally.

Karl [01:00:01] So there's a lot of opportunity there and I appreciate that. , You know, Veronica mentioned it. We can see that the Chinese are saying the same thing.

Erum [01:00:09] Yeah, [01:00:10] yeah. And hopefully the US is listening. I mean, we need to get out there. We gotta talk to more people. Hopefully get more listeners, you are listening.

Erum [01:00:18] You the listener listening right now. Please [01:00:20] share this so people can understand that we need a rally. We need to rally around by manufacturing. It is a great tool to use in order to have products made locally. That is [01:00:30] the, theme I guess you can say of, you know, this administration America first. So.

Erum [01:00:34] Let's leverage that and figure it out. I mean, , it's again, easier said than done, but [01:00:40] I think, we can connect the resources. You, the listener can connect them. It's all about connecting together, , different resources we have in the United States and there's a lot. [01:00:50] And to be able to, just manufacture things locally.

Erum [01:00:53] So. Hopefully we can be a part of that. Carl. I mean, I, hopefully people are listening. , It's scary if they're not. I gotta [01:01:00] continue with the Halloween theme because what are we doing this for? We've been doing it for three years. Yeah.

Karl [01:01:06] Yeah, exactly. I just wanna do a self [01:01:10] plug. I'm gonna be appearing at TEDx Boston on November 16th.

Karl [01:01:14] It's the second day of a planet action focused TEDx. There's a couple people who've been on the [01:01:20] podcast that are gonna be there as well. , Our friend Julia Marsh will be there, Chris Mason, local here in Brooklyn. And Ginger, , Dozier, who's been on the podcast two [01:01:30] times are also gonna be appearing at this TEDx along with yours truly.

Karl [01:01:34] And I can talk a little bit about what I'm gonna be highlighting when I'm there. On the next episode.

Erum [01:01:39] [01:01:40] Ooh. Okay. All right, cliffhanger. We'll stay tuned and hear more about it, but, , excited for you, Carl. And don't forget to give a shout out to the Grab Everything podcast.

Karl [01:01:48] I won't. [01:01:50]

Erum [01:01:50] Great. It's,

Karl [01:01:50] it's in the bio already.

Karl [01:01:52] Oh,

Erum [01:01:52] perfect. Great. All right, well thank you everyone for listening to the Grab Everything podcast. Please like, subscribe if you're watching this on YouTube. [01:02:00] Hello, I'm waving to you. Thank you so much. Yeah, please

Karl [01:02:02] subscribe on YouTube and leave a comment. We actually got a really great comment. Last week.

Karl [01:02:07] Should I mention that? Yes,

Erum [01:02:08] please.

Karl [01:02:08] someone who said that we're making [01:02:10] the world a better place. So it warmed my heart and , they didn't really, it was hard to say to know who that person was, but it really, you know, your comments mean the world to us. Thank you.

Erum [01:02:19] Yes, yes.[01:02:20]

Erum [01:02:20] And for those that just like to get information in their inbox so you can review it on your own time, we do have a substack as well, so we're getting out there. So whatever [01:02:30] channel you prefer, we're there. If we're not. Let us know. We'll get there. we'll get you this content wrapped up nicely in a little package delivered directly to [01:02:40] you, so just give us a shout out.

Erum [01:02:41] But thanks again for listening.

Karl [01:02:44] Thank you. And , that's the pod.