Trump, Saudi, & Adam Neumann’s obsession with cities + BioFluff CEO Martin Stübler | E1712

0:00Hey, everybody, welcome back. It's gonna be a great week five great episodes of this week in startups then i'll do an all-in so i'm still at six a week and still trying to get out on that mountain to do 90 minutes of skiing a day yes i broke 30 days last year's record was 40 days today i'm going to try to uh do this quick show and then i'll get out on the slopes with my daughters but some really important news at the top of the show we're going to talk about the obsession with building cities and saudi arabia joining that fray with uh something they're doing called the line it's basically a giant wall walled city why is this coming up well on friday there was a little um reported on perhaps nobody reported on it video that was released on the internet it's only got 900 views and it's ben horowitz and mark andreason two of the greatest entrepreneurs and investors of our time obviously from andreason horowitz with adam newman the real estate savant who brought you we work and is now doing a company called flow uh that is going to be you know uh living and working for young people and maybe owning some ownership in your home?

1:01Well, the three of them did a talk at Saudi's startup conference in Miami, and they were effusive in their praise of Saudi Arabia. What does this mean for our industry? Is this the beginning of another long relationship like the one we have with China with massive investment in the US or the one we have with Russia? And then what are the dynamics of a deep, meaningful relationship on a business level and a startup level and an entrepreneurial level with an authoritarian country. We've had this happen with Russia, Saudi Arabia, and China. So let's have that discussion. Let's have a candid discussion.

1:32Then we do a fantastic interview with the CEO and founder of a company called BioFluff. What does BioFluff do? Well, they are a plant-based bar for the fashion industry. It's a fascinating conversation of how they figured out how to find this opportunity. It's going to be a great show. Stick with us. This Week in Startups is brought to you by Coda is the all-in-one doc for teams. If you've got a stack of niche workflow tools, or if you're buried in docs and spreadsheets, Coda is the doc that brings it all together. Startups can sign up for free at coda.io slash twist. Mercury, where innovation meets peace of mind.

2:09Now more than ever, startups need a safe place to put their cash. Mercury offers a simple way to manage bank risk and protect every dollar, with up to$5 million in FDIC insurance and a money market fund. Visit mercury.com to apply in minutes. And Revelo. Looking to affordably scale your product development with global tech talent in U.S. time zones? Hire vetted remote developers in Latin America with Revelo. Get 20 % off for the first three months at revelo.com slash twist. All right, everybody. Welcome to Monday. It's a little bit of a slow news day, but there is some news about Andreessen Horowitz and adam newman formerly of we work uh working apparently in collaboration with saudi arabia and their public investment fund the piff so uh there was on friday a conference that mark and recent ben horowitz the top two people at uh and recent horowitz obviously and adam newman spoke out at a conference in miami it's called global priority summit it's organized uh by a nonprofit that's backed by saudi arabia aka the kingdom's public investment fund that's their 650 billion dollar sovereign wealth fund and growing i believe indrescent horowitz and newman discuss the possibility of launching newman's new startup flow in saudi arabia the video on youtube only has 900 views which is peculiar i'm wondering why this didn't get a lot of coverage in our industry uh but uh here are some uh clips from it and we'll discuss saudi arabia and their impact here in Silicon Valley as we go through this story.

3:50So Adam Newman and Ben praising Saudi Arabia as a startup country in this 49 second clip. It's amazing because I've been meeting a lot of Saudi entrepreneurs. I've been meeting them for a few years, but I've been meeting a lot over the past year. And I've been hearing more and more, I'm moving back to Riyadh, I'm moving back to Riyadh. And I asked the entrepreneur, why? Why are you moving back? And I said, what are you talking about? It's the most exciting place on the planet right now. And I want to live where the action is, the more I think about it, the more Saudi almost feels like a startup.

4:19And Ben, we've talked a lot about what makes startups startups, but that's the feeling I'm getting right now. You know, we've spent quite a bit of time in Saudi and people, well, what do you mean it's a startup country? And it actually, it's funny because it starts with Saudi has a founder. Now, you don't call him a founder, you call him his Royal Highness, but he's creating a new culture. He's creating a new vision for the country. He's got like a very exciting plan to execute. and then the people in the country are fired up to do it all right yes uh so you're not a founder in saudi arabia your royal highness obviously and uh here and this is interesting because i've never heard anybody in silicon valley really um talk about saudi arabia as a center of startups i'm sure there are tons of startups there but this seems like a new effort uh and it's quite notable to get ben out there speaking you don't hear him speaking all that often these days the same with mark so here's another excerpt from the talk uh 72 second clip and i'll talk to you on the other side you know when i walked in at first i was like wow this really feels like it but will it really behave like a startup and it's interesting because mark wrote a piece called it's time to build a while back and when he wrote it and it was about like we have to kind of build in america and i would say probably 50 people in the u.s government reached out to mark to talk to him about it and then absolutely nothing happened like nothing and then when I was in Saudi in October I had lunch with Princess Freema and she said you know we're really excited we're going to be a first-class country we're going to build our own supply chain we're going to do our own things and I thought wow that's exciting we'd love to be part of that and so when I came back I met with his excellency Yasser and I said hey you know we've got a supply chain we'd love to be part of it, we'd love to bring it to Saudi.

6:08And he said, let's go. And within a week, and this is a week ago, within a week, we had a half a dozen like really interesting meetings set up, and we're off to the races. And in April, we're bringing our companies out to Saudi. And that's what a startup feels like. So when we talk about Saudi as a startup, that's what we mean, you know, and that's why we're kind of we're so excited to bring flow here and then flow to Saudi as well. yeah that's also how authoritarian countries work um if you live in an authoritarian country and you have a beautiful home it's been in your family for 300 years and they want to build a railroad and your home is in the line of that railroad your home is now um confiscated by the state and we see this countless times uh imminent domain makes it pretty easy to be able to um yeah build infrastructure of course and if you have an authoritarian figure whether it's jinping uh or mbs you can move faster that's true um but you also don't have all that democratic process maybe you don't have uh environmental concerns maybe you don't have people who are poor or underrepresented being protected in any way and i guess that's uh the rub here uh now there is uh a certain growth mindset that mbs has and saudi arabia has that is notable uh they want to transition off of oil they understand that's happening and they have an unlimited bankroll to do that so it is an interesting fascinating thought uh process to think well how do you do that and i have some friends in the film industry and i noticed they all were in saudi arabia last year uh or yeah it was probably at the end of last year or the beginning of this year and uh having a great time and you know in these incredible tents and going you know doing buggy racing in the desert and incredible dinners and it turns out the movie industry uh is being embraced in saudi arabia for the first time so they're actually having movies there and they want to bankroll movies and so this is something the united states is particularly good at if you look at silicon valley uh you look at real estate you look at finance and you look most of all at hollywood hollywood is a very attractive place to come and and in some ways Silicon Valley is the new Hollywood.

8:21So if you are in one of these countries that's trying to make a splash and you have cash to invest and you're going splashy cashy strategy, you can see that with China's relationship with Hollywood for the last 20 years. Before that, we start with Japan's relationship. They had a lot of money available because their manufacturing boom, and they bought Columbia Pictures, they bought Columbia Records, and I think they even bought half a Def Jam. They bought a ton of assets here, and they had gotten very involved in Hollywood, right and to this day i think sony pictures still owns paramount so if you follow the history there uh this is this sounds to me like the starters pistol for a similar relationship to what we did in china over the last 20 years so it's probably instructive to look at the relationship with china the good that came out of it and the challenges that came out of it we created a pretty significant rival there uh with a lot of resources especially in terms of human capital uh and they're still an authoritarian country so they might do things like take over hong kong and get rid of all the democracy in hong kong and replace all the judges and then they might want to do that in taiwan so this is a very controversial topic of i'm being candid inside of the halls of power do you engage with authoritarian countries knowing that it could blow back at you pretty severely knowing that there are human rights concerns and that there's a disjoint between the human rights we see here in the united states and the human rights we might see in the kingdom uh where it's still illegal to be gay as just but one example and so if you are an employee of um a company uh like adam newman's new one i wonder like would adam newman feel comfortable sending his gay employees from flow to the kingdom to operate there right and then you could have a blogger uh who writes something and is caned in uh the kingdom right where caning is still a part of punishment there especially for speaking out against the kingdom so this is very complicated issues and every time the deeper your relationship the more you're going to have to be ready to answer these questions and tim cook is the perfect example of it tim cook has done um i think a pretty great job of deflecting the issues apple has around suicides uh working conditions etc in their factories and in fairness every time that happens uh he has to answer for it and then this great dance occurs where they make things a little bit better for the factory workers in china so this is perhaps one of the great moral questions of our time engagement uh or speaking out and isolating uh dictatorships and ones that don't hit basic benchmarks of human rights that maybe we consider standard in our country and then there's a contingent that who are we as a country to tell another country how they should morally act well i think the universal declaration of human rights is a pretty good starting point eleanor roosevelt wrote that and the un passed it a bunch of countries signed it we all try to live up to it uh even our country doesn't because we still have the death penalty here in many states and we have some cruel and unusual punishment most people would argue that being put in the shoe being put in isolation solitary confinement for 23 hours a day is cruel and usual punishment.

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12:41That's right. Coda.io slash twist for a$1 ,000 sign of credit. And this offer is so generous. I want you to take advantage of it right now because I don't know how long this absurdly generous offer from Coda will exist. Coda.io slash twist for$1 ,000 in sign up credits right now. But this is kind of notable to get the big guns out to then go talk about Riyadh and Saudi Arabia and these glowing terms is unique for this moment in time, I would say. All right. And here's another clip from Adam Neumann about Flow. that is his real estate startup, and the opportunity they have in the kingdom. I said to Flo, and I was talking to Mark and Ben, we're going to build a future of living.

13:25It's a little hard to build a future of living in New York City because New York City is already built. But to really build from zero, you need infrastructure. And if you could, what's happening in Saudi right now, they're dreaming up cities. You're starting from scratch. And that's unbelievable because you can apply the right technology and the right energy from the first day. And as we were talking before, and maybe we'll talk about that a little bit, not forgetting for a moment the soul. It's institutions like this that are actually going to change the world. And it's leaders like his royal highness that are actually going to lead us to where we need to go.

13:56And it's entrepreneurs that are ready to have the courage and bring the soul and the technology together into one that I'm really excited about. This is a really interesting point here that Adam Neumann, who I believe is a bit of a savant when it comes to real estate and communicating i know that he's got a uh i know some people have criticism of him and many of those are valid but say what you will he thinks big he executes at a high level and he is a branding marketing and communication savant just a complete virtuoso when it comes to those things and this concept of new cities is incredibly appealing this is uh like a mind virus when you say new city everybody's brain the neurons just light up and any intelligent person, especially the ones who have been to the TED conference and in any of these elite halls of power, starting from zero and building a city is the height of entrepreneurial madness and vision.

14:58Literally, being able to create your own society from scratch, whether Walt Disney did that with the Disney theme parks, he built some of his own cities, essentially towns, buying a town, like you see these YouTube folks, influencers who buy a small town and then try to rebuild it. This is like the siren song of entrepreneurship in some ways. The siren calls you to the rocks. It never seems to work. But in a major place like Saudi Arabia, yes, you could pop up a city. And remember, even Peter Thiel, right? So if you go down the list of crazy entrepreneurial visionary thinkers, Peter Thiel's up there, right?

15:34And he wanted to build a seastead, right? He was going to build a society that was not part of any society. was past the whatever hundred miles of a nation's uh territory out in the ocean and then they wouldn't have to pay taxes or they come up with their own system and this is what is very appealing there's that project called the wall i believe uh which is super dystopian where they're going to build a wall through the desert and the wall will have everything you need in it it looks like a prison slash shopping mall but you can get pretty creative when you have a lot of land an unlimited budget uh and uh no absolutely no regulation to stop you i can understand why adam newman is absolutely enthralled with this and in fact trump started talking about this and i think this is going to be part of trump's uh victory and i'll say it right here i think there's a there's a great chance i might put it at the majority chance now that i think trump is going to win the presidency i know this sounds crazy coming from me but uh yeah i think he's he's he's got a clear path to victory and he calls he called for a contest i don't know if you uh this this also is another story that's one of the reasons you should listen to this week at stars is because we find stories that are super important that other people aren't covering and so this saudi story is super important because if ben horowitz and mark andreason absolutely champion uh saudi arabia that means it's okay for everybody and in fact in the kind of uh dogged race between venture firms and capital allocators once one major one takes money from saudi arabia let's say or from china from whoever it is a russian uh you know oligarch and or a person from russia with a large bankroll um from an oligarch anytime those folks come in and they disrupt the game here and then the people who don't take money from them are at a massive disadvantage so i think what we're going to see here is saudi arabia this is the grand courting of silicon valley and this is the dry run mbs had come to uh did a tour and there's a famous picture we can pull it up of mbs with mark andreason a bunch of other leaders visiting facebook this is before the murder of khashoggi um the washington post correspondent who was brutally murdered um by saudi arabia and the kingdom so this and i think everything about saudi arabia kind of went quiet after that now here we are two or three years later i think they're going to try to reboot this process and if it seems like here i wouldn't be surprised if the big announcement is going to be that there's going to be a uh an andreason horowitz kingdom fund uh look for that announcement shortly and when the kingdom fund is launched then it's going to be uh yeah all hands on deck to court uh saudi arabia but the second part of the story is this is the city part and i think we should sit there for a second and this uh trump story that was covered in politico um he's calling for a quantum leap and he released a video and i don't know this video was his for these freedom cities and this concept um i'll read a little bit about it here past generations of american pursued big dreams and daring projects that once seemed absolutely impossible they pushed across an unsettled continent and built new cities in the wild frontier actually where i am now lake tahoe donner pass they transformed american life with the interstate highway system magnificent magnificent it was and they launched a vast network of satellites into orbit all around the earth trump said in this video but today our country is law has lost its boldness under my leadership we will get it back in a very big way if you look at just three years ago what we were doing was unthinkable how good it was yada yada yada uh and i think this is like a grand plan that people would get behind this revolution of like say a carless city or a city that was very walkable that was very affordable and uh here's a quick video of the wall i'll sportscast it for you as you can see it looks uh incredible inside it's got this uh greenery this looks actually just like decker's apartment in blade runner or it looks like coruscant in the star wars films if you're familiar with very vertical versions of cities and i guess if it's a wall there is a path in the middle then two walls facing each other with an open uh you know roof or maybe perhaps a cover on the roof that opens up and then of course the top of it is a giant walking forest so you get to have a forest on top of a wall of apartment buildings apparently and this um he's got the elysium i guess vibes to it blade runner vibes and this thing would race across the desert and have a high speed uh some sort of high speed rail or you know hyperloop inside of it and you could travel along the wall and a billion people could live in it and i think that's like kind of where society is getting to can we build something that a million people could live in a billion is obviously crazy that's like talking about coruscant or one of these sci-fi films and so i'm sorry they they don't call this thing the wall they call it the line the line is uh what they call it so uh will that become a reality who knows but i could see it being kind of interesting you could build a wall around saudi arabia and nobody could come in and out um would have a dual uh you'd have a dual purpose to it okay here is a cul-de-sac a startup here in america that is building uh walkable bikeable cities no car cities your car would be on the outskirt of the city this looks like a walking mall like a town like the third street promenade in santa monica the dominion um which is an open air kind of mall uh and living space already in the austin area i think north austin is where it is and so you're starting to see startups do this in america on a small scale and the concept it's pretty obvious you don't you and your family could just come downstairs and walk to dozens of restaurants it's quite charming european like living in florence or something uh except or even denmark comes to mind because they have these incredible bike lanes and so when the city becomes no car then pedestrians children bikes come out in droves and of course you would have you know the since it would be a bike design city you could bike to dinner or bike to shopping and they would have places for you to put your bike and then there was a project at google called sidewalk and i think that got shut down but google was doing a smart city project in Toronto.

22:05And I don't know if they spun it out or what the eventual outcome was, but they ditched it. They were going to do it in Portland, they were going to try to do it in Toronto. I think, you know, trying to do this in a major city just resulted in, I think, just too hard to execute on. And the vision was to do sidewalks labs was going to really be based on data back when big data was what people were obsessed with not ai not energy but big data the idea was oh how could you optimize the city for people walking around so i don't know you were walking home from work and your house would turn the heat on or the air conditioner make it the right temperature because it would know where you were between those two things or your reservation you would know where your bicycle was you're on the way and then they'd have your table ready shopping would be automated but a lot of the stuff that was in sidewalk labs which was going to be you know better parking and you know better building materials all of this stuff kind of started to happen independently so the big vision of the big city became postmates and uber eats and doordash as well as joe jebbia's new adu project or blockable investment we have in modular homes that stack.

23:20So a lot of the concepts that were bundled into smart cities became broken up and now they're Tesla Powerwalls or they're an on-demand service. As a founder, ensuring that your cash is safe is priority number one. And the$250 ,000 FDIC limit is just not enough for most businesses. We all know that. So let me tell you about Mercury. Through its partner banks and sweep networks, Mercury customers can access up to$5 million in FDIC insurance. That's 20 times the per bank limit. These sweep networks protect your deposits by spreading them across multiple banks, right? It's really clever, really simple, but hard to execute on.

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24:32So in Mercury Raise, they help founders connect with investors like myself and then, you know, boost their fundraising. So here's your call to action. head to mercury.com to join more than 100 ,000 startups that trust Mercury for banking. If you're interested in Mercury Ray's programs, applications for both seed and series A are open from April 3rd to April 20th. Disclaimer, Mercury is a financial technology company, not a bank. Banking services are provided by Choice Financial Group and Evolve Bank and Trust members FDIC. But this is the siren song. And I think it's worth it's notable and worth watching both in the presidential race, if Trump were to make this one of his major talking points, this would be incredible because retirees who vote, young people who are increasingly voting and having a hard time finding a place to live, and everybody in between who's suffering with housing costs, you could say, hey, we're going to build 10 of these.

25:22And he's a real estate developer. I hate to give Trump advice, but this would be one of the greatest pitches ever. i know real estate we have a housing crisis you can't find a place to live i'm going to make the best development ever these are going to be done by our government with private uh you know um companies and we're going to build 10 million more homes and he's going to be the greatest most beautiful safest cities right and so you start weaving in safe cities and then you start going up against the uh democratic cities and say hey you can live in san francisco in new york and get killed or he can live in one of these trump towns and these trump towns these trump cities these trump topias the trump topias are going to be so uh safe and they're going to be so beautiful and no homeless people and no drug addicts trump topia could be like his path to the white house all right so we'll keep an eye on the saudi arabia story uh i would think this is going to be a very much a china story and maybe we can learn some things from that relationship of how to use our influence and build healthier relationships maybe with autocratic kingdoms authoritarian countries i you you all know my position on human rights i'm passionate about human rights i do not know the right answer because for every example of holding the line with a dictator and saying hey we're not going to we're not going to do commerce with you things don't get better necessarily for people in the short term and then when you have engagement things can get better in the short term but it can also enable people and you have a situation like the uyghurs so because hollywood the nba and apple bent the knee to china then that enables them uh to say okay we can do commerce with the united states and we can also uh you know have this holocaust happening with the uyghurs and i don't say that lightly uh anybody who's jewish has looked at the situation here and many jewish people have looked at and said this is holocaust level genocide and they use that term to warn the world of what's happening to the uyghurs their systematic annihilation of uh you know an entire population it's pretty dystopian and dark the precursor to that was the fact that we didn't hold the line with them but you also have a half billion people in china who probably came out of abject poverty and started working in factories and a middle class emerging so So things maybe could have been even worse if we didn't engage.

27:49And this is one of the great moral questions of our time. And it's one that I am not qualified to answer. And maybe we could ask Sam Harris what he thinks. He's a great moralist on these issues. Should you engage and make people's lives better and build bridges with authoritarian regimes to try to make things better? Or should you hold the line and say, hey, we're just not comfortable doing business if you're going to make it illegal to be gay. and then we can't have our gay people working in the in this country and partnership right these are very challenging issues next up is martin stubler he is a really innovative founder he is the ceo and co-founder of biofluff what is biofluff it's a company that's focused on creating plant based fur for the fashion industry and we discussed biofluff's business model their strategy how he came up with the idea and how he's working backwards going high to low just like elon did with the roadster eventually to the model three hundred fifty thousand dollar car to a forty thousand dollar car and eventually maybe a twenty or thirty thousand dollar car he's doing that with fur he's going for the high end and then eventually this ethically uh produced no harm produced fur could be available in uh you know even the most affordable clothing objects and it's quite luxurious uh to have these fur mittens and if you could do it without harming animals why wouldn't you.

29:07It's a great interview. It's great to see how he triangulated around this opportunity. Stick with us. Ravelo helps US companies to build and scale software engineering teams quickly and easily. And Ravelo provides world class full time remote tech talent. Don't think of Ravelo as a quick one and done hiring platform. Nope, they want to partner with you and help you build a strong remote team of developers for the long term. With more than 300 ,000 tech professionals, Ravelo has the largest online platform for U.S. companies to source, hire, and manage remote engineering from Latin America, according to Ravelo.

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30:28And look at this client list, Style Seat, Earnest, Spark Cognition, Shippo, and many more. So head to revelo.com slash twist and mention twist to get 20 % off. That's R-E-V-E-L-O.com slash twist for 20 % off. All right, everybody. Welcome back to the program today. I am talking with Martin Stubler. He is the CEO and co-founder of BioFluff. What is BioFluff doing? Well, they're making plant-based fur technology, of course, for the fashion industry. Their mission? To become the biggest supplier for all environmentally conscious, high-end fashion brands and replace animal fur and synthetic fur with plant-based fur.

31:10Martin, welcome to the program. Thank you, Jason. It's a pleasure to be here. Stubler. Did I get close to the pronunciation there? Stubler? That was close. It's a German name, so I would probably say Stubler. Stubler. Yours was pretty close. yes okay where where in germany are you from you're from frankfurt you're from munich berlin where german people probably would not approve of that but i'm from austria but oh we are off of the german language i would say you're you're a fan of that schnitzel with the spetzel on the side yeah is that one of your favorite dishes there not very much it's a very I would say famous national meal here in Austria, but being, yeah, not very into.

32:00Oh, you're vegan. You're vegetarian. I take it. It's a mixture. It's a mixture, but probably mostly vegetarian, man. I dream about that. I dream about that. Viener schnitzel and that's spetzel. You ever have the spetzel? Spetzle. Yes. Spetzle. Is that how you say it? Spetzle. Yes. Spetzle. oh so good so good uh if you ever find yourself in germany i highly recommend it all right i learn something new here on the program every day it all comes whenever i travel it's just about the food all right so we all know why fur is um at least fur that is purposefully grown for clothing it's uh kind of horrible right factory farming and then you're murdering all these animals for clothing that we don't need and then there's of course byproduct people are eating steaks anyway you get the leather from cows that i think is less reprehensible it would have been thrown away anyway um but let's talk about what you're doing because i thought synthetic fur was a-okay and was fine but is there a problem with synthetic fur and then how did you come up with the idea for biofluff yeah i i would say synthetic fur as a as a material is already a step in the right direction biofluff was not founded as a synthetic fur biofluff's origin surprisingly enough is in a tannery so when i was yeah so when i was working for a bay area company here a bay area company that was focused on mycelium ladder i was sent to europe that was early early 2020 to help them implement the process in a tannery in spain and i was planning to be there for about two weeks in week two coveted and i stayed in this tannery for about a year and a half explain what mycelium is in this regard i mean i know that's fungi if i'm hearing you correctly yes correct um mycelium is the underground root system so to say the underground root network of fungi of mushrooms whereas the fruiting body is usually the part that's edible above ground and every fungi has a huge network of usually white mycelium fibers underground and these fibers can be used in very advanced biotech applications to produce food but also leather products really you can make leather products from the mycelium and these mycelium fields can be over from what i understand uh hundreds of miles and they all communicate with each other you're starting to see this come up in science fiction uh there was one of the star trek series made it a core series arc that mycelium networks were communicating with each other and they do seem to communicate with each other in some way i should think the last of us also kind of the new zombie flick on hbo kind of taps into this phenomenon um so you go to this tannery where they're trying to use mycelium to make leather and you make some discoveries explain so replacing cowhide with mycelium that is already one step in the right direction i believe but during my time there i was just exposed to not just cowhide or mycelium processing but also to a lot of fur animal processing.

35:28And coming from the biotech field myself, I was never exposed to fashion or anything close to fur. I would not wear fur items myself. But being in this tannery and being stuck there for over a year, basically, yeah, showed me this is still a thing. Like people are still tanning animals to create animal fur and to use it in fashion applications. So I thought to myself, well if we have a really innovative and cool replacement product for for cowhide for leather then why is no one making an innovative and sustainable replacement product for animal fur plastic fur being already one step in the right direction but the problems with plastic fur are manifold there are so many environmental concerns about having for example microplastic pollution come off the main fabric or the end of life cycle scenario where currently all plastic furs are not recyclable and need to be probably either burned or put in landfill ah so yeah we've had some other founders on the show who are working on recycling of clothes but if it's plastic there's probably very little chance of doing that okay so we have a trend that's going on you identify this trend hey people are making alternative we have you know mock chicken we have people trying to make sustainable fish um you know that are printed in uh basically labs with slurry so this is all happening and you discover fur as a possible item that could be optimized whether it's the plastic for obvious reasons we don't want to have microplastics in the ocean and then in the fish and then in our bodies nor in landfills so how do you go about going from that to figuring out a solution Well, step one was to identify the problem.

37:22And it was very obvious to, after talking to industry experts or people in the fashion industry, that no one is really happy with the current solution. The current solution being either animal-based, coming along with all the problems that animal-based materials, but in particular fur has in terms of animal welfare. But then also the alternative did not seem to make people very happy. And we're talking here about polyester or acrylic-based faux fur. That's aka plastic fur. So after talking to people in the industry, identifying, hey, you have these two options and none of these two options make you happy.

38:02How about we create a third option, an option that's completely plant-based and even biodegradable as an end-of-life cycle scenario. and that's when i first discovered hey people are people are listening up they're like trying to understand oh how could we use that like how would that fit into our supply chain for example so from i would say conversations with these people the most important part that i took away from my early weeks and month of research was how can we make this fit seamlessly into a fashion brand supply chain. Got it. So how is it made? It's it's plant based. So am I to believe that some plants are grown and then in some way processed so that they don't degrade and then are made into fur?

38:52What's the actual process of making this? Yeah, thank you for asking. We're not able to dive too deep into the process. But at the moment, we are using a variety of different natural fibers that we then assemble into a fur-like material. And the finishing aspect or the finishing step is the most important one. That's also where our secret sauce lies. If you, for example, ever touch the fur of a dead animal, I don't say you should, but in case you would touch the fur of a deceased animal, the fur is rough, the fur is very coarse, and only through this tanning process the the fur gets the shine the soft softness and the shimmer that it's known for in fashion so we are drawing from a similar technology where we developed a similar technology to tanning technology but specifically for plant fibers whereas animal-based hair is usually keratin based our fibers are cellulosic got it but the process is similar got it yeah because we obviously cotton linen uh these don't come from animals and then you have hemp right so people are using hemp to make certain things i guess bamboo is used in certain parts of the world to make clothes but i guess the question is um how does it not degrade um or does it naturally grade degrade over time i mean obviously it's not like an apple where it's going to degrade in a couple weeks but what's the is there a shelf life issue because it is plant-based or is there some way to make it resilient or is it using some of those more resilient fabrics i guess

40:36so a good comparison i always tell people is just imagine an organic undyed cotton t-shirt we're not using cotton or any similar fiber but just imagine a t-shirt like this and the way you would use it you would probably wear it wash it dry it and then keep it in in a stack ready for the next time the same can be done with our material our material does not biodegrade itself or basically by wearing it or using it properly but once this particular example cotton t-shirt would come to an end of life cycle scenario then the material can be simply degraded in an let's say industrial composting facility or even in home home composting got it And you don't come from the fashion industry.

41:22You do come from a chemical background or anything like that. What's your background to make you uniquely qualified to do this? Well, what's the background that would make me uniquely qualified to create plant-based fur? That is one of the things in venture capital we talk about is sometimes it's good to have an outsider. So the fact that you're not a fashion person makes you an interesting person to do it because you can just look at the problem with fresh eyes and not having a bias, I guess. yeah we've we've yeah to my to my background i'm i studied agriculture focused um plant agriculture okay or plant breeding and second or i started a few things but basically in a nutshell it's agriculture then biotechnology chemical engineering and plant-based bioeconomics as these like four four small verticals and they seem to to work pretty well to invent something like plant-based fur as yeah there's there's a huge bioeconomic aspect coming into how we design biofluff and there's chemical engineering coming in in terms of how we process the material so so yeah let's talk about the actual cost of doing this um how much does fur cost if people we're going to buy i guess chinchilla or fox these are animals that are specifically bred and then murdered uh killed in order to make fur doesn't seem like that would be too expensive but there has to be some cost of processing it and i guess they have to get to a certain age in order to have the fur be viable um how much does it cost for faux fur i think they charge per square foot is that how they do it in the in the industry per square foot or something then how much are you able to do this because economics does matter or it doesn't matter because for a high-end brand you know if it's gucci or somebody or you're doing somebody high-end they actually probably the cost of the fabrics isn't that large a percentage overall to the cost of the item so let's talk about the economics of this because economics do matter in some cases and they matter less than others correct economics do matter even in let's say impact investment scenarios.

43:38Biofluff is not an impact investment. Our economics make total sense and we're currently squarely between animal fur or the price of animal fur and the price of synthetic fur. I believe synthetic fur is sold by the yard. The yard is a weird measurement but it's approximately 10 to 12 square foot. So I would say material costs vary widely. If we start with very affordable polyester faux fur or plastic fur the costs are probably more like one to five dollars per yard whereas if we're going towards high-end fur and with high-end fur i mean let's say a combination of polyester and acrylic fibers to imitate a very specific animal hair then the price is probably closer to 10 to 20 dollars per per yard and yeah biofluff is currently right between these two price points being placed exceptionally well for the new luxury material with fur animal fur of course um being now yep canceled or basically and some of these are incredibly expensive like lynx uh i think is the highest price in my research of all of these furs they only use the belly of the animal and they use 15 of them to make a jacket so you have to kill 15 lynx and i think it's thousands of dollars in materials how would you say your material today currently feels compared to elite materials uh sable chinchilla mink whatever um and could a person tell the difference faux fur your organic plant-based fur and then the real deal murdered animal fur so maybe we should start with our material first because that's what what i know best our material currently is from a hand feel perspective and hand feel is really a test that people do in fashion or in the tanning industry to really assess a material so on the hand feel test our material is currently as soft as comparable synthetic furs and we have um plans and we have experiments currently planned to reach the softness level of mink fur that's our target so the highest the highest softness i think you mentioned sable before or yeah um chinchilla fox all of that stuff comes to mind yes all of these are very very very soft fur i believe female european winter mink is one of the softest i've ever i had to touch just to compare them to our material and it's still softer it's still softer by i would say a long shot but then we're not competing really with animal fur because animal fur is going away anyway brands are already preparing to be complete the animal fur free within the next few years and i cannot speak of course for brands but that's what we are hearing when we're talking to bigger brands and behind the scenes so for them the discussion is now which plastic fur are we using or are we using organic plant-based fur as a replacement product how do i know this is crazy uh for me to ask but if these things are becoming indistinguishable and i would believe with science and technology you should be able to make fur that is better than in nature because you have the ability to change nature at a rapid pace whereas nature has evolution or i guess you could do bioengineering on you know some foxes or chinchillas but that sounds awfully expensive and probably would take a long time so how does the market of a person walking down the street with a fur collar you know in new york how do people know if it's faux or if it's real or if it's vintage because there is a discussion today about hey if it's vintage hey that seems okay to buy it why would you throw it away um and and so is there like some little logo they put on people's clothing or a way of distinguishing it so that people who want to signal please don't throw red paint on me please don't think i'm a horrible person i'm using yours and have you thought about that yes of course um coming from from my personal background coming more from the people that are let's say yeah maybe against fur and maybe throwing something um this was one of the primary concerns when i started this company like are we going to create something that people will not like because they will identify it with an animal they will identify it historically with what has been harvested from killed animals and we designed this primary concern into the product from the very onset.

48:38So BioFluff will be distinguishable from animal fur as well as from synthetic fur by doing a simple hand feel test. We are planning on having two product attributes, let's say being present in the material at all times. It's number one, a natural roughness or a natural hand feel that is different from animal fur and also very different from polyester or acrylic-based fur. And number two, biofluff is completely anti-electrostatic. So this is one simple test that we recommend all our customers. If you touch polyester fur or any sort of faux fur, it will charge naturally. And if you rub it against your hair, your hair will probably be standing up in the process.

49:25Whereas natural plant fibers do not charge. and this is also a handful property that people can distinguish that you can use to distinguish and there's no industry test there's no industry test or standard this seems like a huge mistake like why doesn't why don't the people who've elected to stop using real fur say if you see this logo on um you know the lapel right when i get these nice isa jackets i have one of them it's a really beautiful jacket they put like a little logo on it so i can make sure people know that i have an east i a jacket and then uh you know i spent two grand on or whatever it costs i think it's more but i got on the discount rack um so shouldn't there just be like a little logo that's like a heart or something and lets people know hey don't throw red paint on me the industry never came up with that like a fair trade stamp or something good good housekeeping seal of approval maybe you could come up that's a really good question yeah maybe we should add this to our product features i think you should just yeah get together with somebody if it's an organic thing you could make it like i don't know an apple or something or a bamboo shoot or something something some logo to do that so how do you go from making this as an experiment to getting your first customer um obviously these big brands uh in fashion do not want to be on the wrong side of history i think you're pointing that out that they're kind of discontinuing it maybe people in europe or china or some other markets feel differently about this i would suppose there's different cultural standards around this so how do you go from this prototype uh very innovative one uh to maybe becoming more into industrial scale right in terms of manufacturing and how do you get a partner to buy into this i would think that they're open to new ideas but explain how you go about that as an entrepreneur if if the idea itself is captivating and fascinating to industry players it's usually easy to start a conversation about hey what are you using now or what's your what's the best and most sustainable material that you're using at the moment and from discussions around what they are doing there's usually some knowledge to be extrapolated from in terms of how we can design the new order scale or scale the process for biofluff so for us we had a lot of customer interviews and a lot of also interviews with industry partners and biofluff is currently not owning any facilities but we designed the process to be completely outsourced to different key industry players across europe for example so for us it was completely key to understand what is currently done what is the best practice for the current best material and then to start from there to design our process around these parameters or even with partially with these machines and i believe this is something that biomaterial companies are sometimes getting getting wrong because they're spending so much energy in creating a new process, a new innovative process to create something like, yeah, there are multiple biomaterials out there that are very, very cool.

52:45But it's then hard to scale this material at an industrial level. And no matter how high the quality, no matter how good the material, if it's not scalable, if it's not scalable at economic, with specific economic values, then brand partners will not buy in and so how did you get your first customer you have a customer now i understand yes we are we're currently in co-development agreements with a variety of different luxury brands and co-development is basically the brand comes assesses your material they decide this is super cool but not quite ready to be put on the market so they start a co-development with your with the startup basically and work with you to fine-tune specific product parameters great so you're underway and this is all interesting timing uh people may not know this but this year california became the first u.s state to ban the sale of animal fur products um on january 1st 2023 a law came into force that makes the production cell donation of fur illegal EU is also getting in on this 20 other countries have voted to ban fur farming pretty you got a lot of wind at your back in terms of if people want to have this solution they're going to need an alternative yeah and we're definitely feeling this dynamic or this drive basically from the brand side a lot because brands that were not open to the solution a few years ago are now hey how what's what's your stage can we steal with you can we buy your material how ready are you to to go to market so in in this particular case i would say fur is the only biomaterial or the only let's say alternative no matter if we're talking about the alternative protein space or other biomaterials that is outlawed on a legal basis by states like california and i'm not sure but i've heard that also new york has banned the import and the wholesale of animal fur on the same date so january 1st 2023 and you can do this for 20 a square foot or something or you produce it for less than that but you're going to sell it for 20 bucks a square foot or something like that so a jacket takes 10 20 square feet i'm not sure how many how much waste there is when you make something but if you were to make it if you were going to make a full-on fur coat out of this what would the cost of the materials be is that 10 feet or five feet square feet it really depends on the size of the the garment of course but we are we're currently working with brand partners to create let's say simple showcase garments for for fashion for runways for runway collections and we're estimating between um 10 and 20 square foot per garment got it so 200 400 for like a full-on fur jacket which means if you were to just do the fur hood or the you know inside or something it could be less to have it just around your uh lapel or something like that uh which is quite reasonable considering doing that with chinchillas or foxes or whatever it would be low thousands of dollars probably in all cases so you're going to be half the price or something or a third of the price is that what you did we try to be yes we're trying So it's really hard to compare our material to the price of animal fur because animal fur is auctioned bi-annually in, I believe, in Hong Kong and in Denmark as well.

56:21So the fur price is set for every season for every fur type. Yeah. This is also a big disadvantage. When brands are working with BioFluff, they know the price, they can plan ahead, and they really know how much BioFluff will cost them this season, next season. That's crazy. fur is auctioned off and yeah i guess they do it by harvest or whatever so it's like a crop in a way and it can vary that means it can vary based on demand and if people are young people do not want to wear this this is gonna you know paradigm like they say paradigms don't die people do the the paradigm of people willing to wear this obviously boomers you know and the greatest generation they wore fur curts i remember my grandmother had one it was a prized possession my mom probably would be less inclined my wife would probably be not super interested she's gen x and then i think millennials and gen z would have zero interest in this so this is basically the tail end of the fur industry it's ending either way it's it's really if consumers are not purchasing this product industry is just very fast and the fur industry is going down um in in many respects that's also one reason why we're not marketing biofluff as let's say a fur but we want to have it playful we want to have it as a as a luxury element we can also envision it in many fantasy colors recreating for example fantasy beasts or other fantasy animals that never existed but we can play and fine-tune our platform what's an example of a fantasy animal you're going to do like uh you know unicorn fur or you can do like our favorite is the our favorite is of course the unicorn fur that yeah has never been harvested in nature but biofluff is absolutely able to recreate unicorn fur in its precise texture physical haptical appearances and yeah fantastic and so were you able to raise money from this from traditional investors did you go to the emerging sustainability, ESG, climate type investors, seed funds, because material science kind of falls in between a lot of different venture fund mandates.

58:38So I'm curious how your fundraising went as an entrepreneur, and how did you frame it for them? Because it's hard to know, this isn't software, so it doesn't necessarily have the highest gross margins like software does, and it requires a lot of physical research and production. So were you able to get venture capital is interested in something as physical to produce like this um biomaterials are always a hard sell compared to software for example sure the in this case in in the fur case the the legal record or the legal trend globally is just pointing really clearly in one direction so we were able to get um venture capital money on board last year we've raised half a million last year to create this early industrial prototype.

59:22And we're now raising a second round around 2.5 million to really scale this industrial prototype to a full-scale industrial manufacturing plant. Amazing. And are you doing this in the Bay Area? Where are you basing this plant at? Will you be making this in the United States? Are you going to do it in Mexico or in Asia? Where are you planning on putting manufacturing for this? our goal is to or our beachhead market is the european luxury market so our our typical brand partners are located in paris or in milan and for these brands having having worked with them in the past for these brands it's really important to get european made raw materials so they're able to or they're willing to pay a premium for example to get italian leather or i see or french fur so we're following this trend and we're this is basically what biofluff is doing all along like we're trying to understand industry trends we're trying to understand what do brands like and then we adjust our process accordingly so at the moment biofluff is 100 made in italia wow so if you can say even though it's not actual leather it's faux and it's organic the fact that you could say it's you know it's created in italy will create that aura and be part of that ecosystem and be part of that rich tradition in milan what a brilliant idea wow so you're literally trying to be in sync with their ethos to make it easier for them and remove friction see you're a smart founder i got to give you a little credit you're not trying to change the game on the field you're not trying to change the rules you're trying to just slide in there and just make it a very easy breezy option they can order leather from tuscany or wherever it comes from in italy or you can order you know this new you know biomaterial also made in it and i bet you the italian government which is super pro entrepreneurship right now would love to invest in your next round i think that's where you'll get your next investor so are you living in milan now as you build this company i am i'm currently living in the bay area but i'm in milan every other month so wow we hate you italy is a great place for manufacturing but it's also a great place to raise money and build yeah well we collectively i speak for the entire industry hate you for having figured out a way to spend so much time in italy for your company absolutely brilliant these biomaterials are going to be a big thing huh we're going to see this in all aspects of our lives new biomaterials just really changing the world huh yeah it's it's not so many brands are not putting this let's say on on their website or somewhere but a lot of big brands we've spoken to have internal agreements and also agreements between brands that are for example forcing them to switch to a completely plant-based or at least to a completely recyclable materials by 2030.

1:02:28So yeah, there's a huge potential for biomaterials, especially biomaterials replacing animal products or replacing current plastic products. Amazing. All right. Well, listen, I really appreciate you sharing this vision and I assume you're hiring and then you're always willing to take meetings with investors if you're a founder. So where can people reach you or learn more about what you're building? the best way to reach bio fluff is on our website we have a type form just fill in your information and we will get back to you as soon as possible and it's a bio dash fluff.com uh so b i o dash yeah b i o dash f l u f f dot com uh and uh i assume your first name at bio dash fluff.com were you able to get the first name at your own company you're martinet all right everybody uh Great job.