EP 48: Peter Reinhardt (Founder/CEO, Segment/Charm Industrial) - Quitting the Software Industry, Dropping out of College and Climate Change

In the 48th episode, CEO of Charm and Ex-CEO at Segment, Peter Reinhardt sits down to talk about his path, dropping out of school to attend Y Combinator, selling to Twilio, and turning his focus to a new idea – Charm Industrial. (0:00) Introducing the Logan Bartlett Show (6:35) Welcome Peter Reinhardt (12:23) Getting to Y Combinator (19:27) Pivoting to the next idea (25:04) Posting on Hacker News (30:36) Pricing your product (39:32) Twilio Acquisition (45:58) Starting Charm Industrial (52:16) Figuring out the carbon offset problem (1:02:46) Where are we compared to where we need to be (1:14:49) Running Segment vs Charm Industrial Mixed and edited: Justin Hrabovsky Produced: Andrew Nadeau and Rashad Assir Executive Producer: Josh Machiz Music: Griff Lawson 🎙 Listen to the show Apple Podcasts: https://podcasts.apple.com/us/podcast/three-cartoon-avatars/id1606770839 Spotify: https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 Google Podcasts: https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5zaW1wbGVjYXN0LmNvbS9zb0hJZkhWbg 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 🐦 Twitter - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show A Saturday morning podcast hosted by Logan Bartlett (Partner and Managing Director at Redpoint Ventures) covering the tech news with his friends and other people with industry expertise. Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 📱 X - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member. Tap follow and enable notifications to stay ahead of the game.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Logan Bartlett?

  Welcome to the 48th episode of Cartoon Avatars and the last episode of Cartoon Avatars. I'm your host, Logan Bartlett, and Rashad, it's, uh, it's over. We are now, if people are listening to this, they, uh, probably by now know, based on the iconography or the, uh, or the intro, or whatever it is, that we are rebranding the show, uh, in my ever-ending narcissistic desire for more, uh, more attention to myself. I, uh, decided to name the show after, after me. We, we were actually flipping a coin of if it was going to be named after Rashad or

• 0:46Logan Bartlett?

  myself, and, uh, I actually made both sides of the coin me, and so, uh, I, I won.

• 0:53Speaker 01

  Yeah, I said heads or tails, and it was just Logan's face.

• 0:56Logan Bartlett?

  Yeah, heads I win, tails you lose. And, uh, it turns out it was, yeah, so, um, here we are. Uh, but I guess with this is a commitment, um, to do another, uh, whatever, 40, 50 episodes. I think we're gonna try to keep going, uh, for, for another year. And, uh, so, yeah, I appreciate everyone hanging in there as we sort of try to figure this stuff out and hopefully, um, hopefully this, this new iteration, new product is something people enjoy.

• 1:23Speaker 01

  It's funny, if you look at like, successful podcasts, a year in podcast time, even though it feels like we've, you know, been through two name changes and a ton of episodes and guests and bookings and schedulings and all this stuff, but it's really nothing, but what can...

• 1:37Logan Bartlett?

  By the way, definitely not nothing. Uh, I, uh, years off our lives, I feel like.

• 1:42Speaker 01

  Right.

• 1:42Logan Bartlett?

  Yeah, yeah, yeah, yeah.

• 1:44Speaker 01

  If I was a listener, I guess a few questions. Why, uh, why the name change to start with?

• 1:50Logan Bartlett?

  Yeah, I mean, we, we sort of came up with it. It was a derivation of, uh, the, the start with Nikita and Zach, right? And it just didn't really mean anything, any, anymore. And, uh, and so, I, I don't know. It felt like a more natural name. I sort of felt silly typing it out at times to people, uh, just like, oh, yeah, the show, this is the name. It doesn't really, you know, mean anything. And so, I, I don't know. It, it felt like there was more brand accumulation to be had, uh, just by associating, uh, myself with it more and also typing it out. I felt a little less silly. Um, I think those were probably the two main inputs into it. And, uh, so hopefully...

• 2:30Speaker 01

  The my name will have the recognition with the name. So,

• 2:34Logan Bartlett?

  Yeah, it actually was. I mean, it wasn't my when I asked for ideas at the end of the year, one of someone actually suggested it. And I I noodled it, talked it through internally and everyone was like, yeah, I think that actually makes a lot more sense. So it was actually a pretty easy thing. I was uncomfortable with it at first, but then I realized it probably was the thing that made the most sense. So,

• 2:57Speaker 01

  Yeah.

• 2:57Logan Bartlett?

  I mean, Zach will definitely come back on. At some point, we'll get Nikita. Now that he sold his company, I think they

• 3:06Logan Bartlett?

  as anyone that's read his tweets have seen, he he isn't to be wholly trusted behind a microphone at all times. And so I think we need to figure out, maybe let them digest a little bit before he comes on and tells part of the gas story. But yeah, it should be, it'll be interesting. We'll keep having other people on.

• 3:24Speaker 01

  No. So we put out 50 episodes to our joke earlier of that not feeling like a lot or it being a lot and Nikita,

• 3:34Speaker 01

  what founded and sold a $50 million business?

• 3:38Logan Bartlett?

  I don't know what it was. Was there any rumors of I didn't? I mean, I know a little bit, but

• 3:43Speaker 01

  I read the Twitter thread of like a bunch of people guessing and all the guesses were between like 25 million and 100 billion. So

• 3:49Logan Bartlett?

  Yeah, yeah, yeah. You know, who's to say what this is worth?

• 3:55Logan Bartlett?

  It could be comparable. I don't, you know, equal equal enterprising. Yeah, he did it. He did that in the amount of time that we've done this. So.

• 4:04Speaker 01

  I guess the other question is, like, besides the name change, is there any other changes to the format of the show in person versus virtual? Things you're trying to do more in the next version?

• 4:15Logan Bartlett?

  I think it's probably going to be more conversations with people in tech. The biggest consistency I got was I think people like hearing the news and all that. I found that. I only enjoyed part of that. And so I think I enjoy the conversations far more with people. And so I'll do more of those investors and founders, ideally more founders and people that have had success, but about parts of the journey that they haven't told ad nauseam, I think is ideally the goal. So welcome suggestions. But I think that's probably going to be not to say we won't hit on topics as they come through. And certainly if crypto ever makes a reappearance into the ecosystem, we'll, I think we'll have to, we'll have to put on, put on the cape and, and the superhero

• 5:00Logan Bartlett?

  mask and come in and do that. But yeah, for the time being, I think it'll be mostly conversations.

• 5:06Speaker 01

  I mean, as a tech podcast with a weekly show, and then something like the SPF thing happens, like you can't release an episode, at least make a comment on it. So.

• 5:16Logan Bartlett?

  That will be a universal rule. If there's tens of billions of corporate fraud that occurs within a tech company, we will, we will dedicate at least one episode to talking about it. So that is a promise from here on out.

• 5:27Speaker 01

  Right.

• 5:28Logan Bartlett?

  So I guess what you're going to hear next is the first episode of the Logan Bartlett Show, the last episode of Cartoon Avatars. A quick plug to everyone, please do like, subscribe, review, all of that stuff, share with friends. We're trying to get the like counts up, particularly on YouTube. So if that's something you could do, we'd really appreciate it. What you're going to hear next is a conversation I have with Peter Reinhardt. Peter was the founder and the CEO of Segment, which he sold to Twilio for $3.2 billion. And now he is the founder and CEO of Charm Industrial, which is in a totally different space, trying to remove carbon from the atmosphere.

• 6:09Logan Bartlett?

  So we talk about a bunch of different things, but go into how Segment was kind of an accident. We talk about him going to the hospital and for panic attacks and all of that. We talk about the

• 6:24Logan Bartlett?

  Global warming in some ways and ESG and all of that stuff. So a really interesting conversation, thoughtful guy, and appreciate him coming on. So you'll hear that now. Peter Reinhardt, thanks for doing this. For people that don't know, Peter was the co-founder and CEO of Segment. Sold to Twilio for $3.2 billion in November of 2020. And now the co-founder and CEO of Charm Industrial. We're in your lovely office today, which is a warehouse. And we'll talk a little bit about what Charm does. I think it's different than Segment from what I could tell. But in doing a little bit of prep for this, so you grew up in Washington. Your initial entrepreneurial experience was starting a newspaper?

• 7:08Speaker 02

  That's right, yeah, high school newspaper.

• 7:09Logan Bartlett?

  Rogue high school newspaper, right? It wasn't the mainstream one?

• 7:13Speaker 02

  That's right, yeah. Yeah, it was not the, it was not the main, main newspaper for the high school. We sort of started it and distributed it in the hallways.

• 7:19Logan Bartlett?

  Was it satirical? Or what was the impetus to start your own like ambitious project like that? Going after the mainstream media?

• 7:27Speaker 02

  I think it was actually my friend Alex Yuli really wanted to do it. And I forget why, maybe it was, maybe it was more edgy. I don't know, we did the whole thing though. We had crosswords and cartoons and it was, it was everything.

• 7:40Logan Bartlett?

  That's a pretty, I imagine decent sized undertaking, actually getting it physically printed and all that stuff. Did you think you were going to be an entrepreneur? Was that just something you stumbled into? Or do you have like entrepreneurial background in the family or anything?

• 7:53Speaker 02

  No, no entrepreneurial background in the family. My, both of my grandpas were ministers.

• 7:58Logan Bartlett?

  Interesting, that's different. It's a different kind of entrepreneurialism.

• 8:01Speaker 02

  Yeah, it's, it's a, you know, you're, you're preaching.

• 8:04Logan Bartlett?

  Yes, yes, yeah, great sales. So you did that, then you went to MIT, studied aerospace engineering, which, so what was aerospace engineering into dropping out and starting Segment?

• 8:18Speaker 02

  Yeah, I actually started with the idea that I was gonna do physics at MIT. And then it felt a little-

• 8:24Logan Bartlett?

  Another easy course load, I imagine.

• 8:27Speaker 02

  Yeah, yeah. Well, I was really excited for Junior Lab, which is where you sort of every few months repeat these Nobel Prize winning experiments. I mean, now that they're known how to be done, they're not that hard, but-

• 8:34Logan Bartlett?

  Are physics and aerospace engineering, those are like the two known as two of the harder undergrads at Harvard?

• 8:41Speaker 02

  They each have these classes that are Weider classes. In Core 16, AeroAstro, it is Unified Engineering. And yeah, you lose half to two thirds of the class.

• 8:52Logan Bartlett?

  And you don't take that to your junior year?

• 8:55Speaker 02

  In physics, it's junior year. With Junior Lab, that's the super hard class. And then for AeroAstro, it's sophomore year.

• 9:02Logan Bartlett?

  Interesting. What's the failure rate of each of those classes? Two thirds is for physics?

• 9:06Speaker 02

  Yeah, I think half to two thirds for both of them. Yeah. But it was fun.

• 9:10Logan Bartlett?

  Yeah. So that's why you dropped out. You couldn't make it. Yeah.

• 9:15Speaker 02

  In my junior year, I felt like the AeroAstro program, I mean, what it's designed for is making aerospace engineers who know how to build jet engines and all those kinds of things. And as I started to look at like what that actually meant, post-college, it was like, kind of felt like it was gonna make me prepared to be GE engineer number seven, working on the latest version of the Blackhawk engine, optimizing like 1 to 2%.

• 9:39Logan Bartlett?

  It's a narrow career path.

• 9:41Speaker 02

  And I was like, you know, it's awesome. I'm glad someone does it, but like, not for me.

• 9:44Logan Bartlett?

  And you actually interned at Blue Origin, which, how long ago is this? Was this 10 years ago? 15 years ago?

• 9:49Speaker 02

  Wow. Maybe 17, 18. I was in high school.

• 9:54Logan Bartlett?

  Oh, wow.

• 9:54Speaker 02

  I interned at Blue Origin, yeah.

• 9:55Logan Bartlett?

  Okay. So this was, I mean, you were, you were early into all this. Now, Blue Origin, for those that don't know, Jeff Bezos' space company. I mean, now it's, I guess, still not mainstream, but SpaceX and Blue Origin are pretty well-known.

• 10:07Speaker 02

  Yeah.

• 10:08Logan Bartlett?

  So you went to that path, and then what took you to Y Combinator segment, all that?

• 10:14Speaker 02

  Yeah, so I had an experience working at the Naval Postgraduate School on a, it was called the Naval Postgraduate School Solar Cell Array Tester. It was a one-unit cube sat, so 10 centimeters by 10 centimeters by 10 centimeters. And I got to write the flight software for that as an internship. And that was super fun, but it was isolated to that one lab. And all of my experiences outside of that were like, oh, my God, government bureaucracy, like, big aerospace bureaucracy. I can't handle this. And then in the beginning of, I guess it was junior year, took this class called Founder's Journey at MIT. And it was a really awesome, simple class. Every week, they brought in a new speaker, who was a founder,

• 10:58Speaker 02

  and they just told their story. And it was super inspiring. And one of the sessions, this guy, Adam Smith, who founded a company called Zobney, and he came in and told his story about how he raised $40 million, and I was like, oh, my God. Like, I was totally in awe and like, super excited about this guy. And afterwards, we were sort of milling around. And my roommate, one of my best friends, Elia, who later became co-founder at Segment, was like, hey, we should ask him back to the dorm for a beer. And I was like, that's, don't do that. That's embarrassing. Like, he's obviously gonna say, no, like, just don't embarrass yourself. And he's like, no, I'm gonna do it. So he walks over to

• 11:41Speaker 02

  Adam, and he's like, hey, you wanna come back to the dorm for the beer? And I was like, yeah, sure. So he like, came, hung out. We had some beers in our, like, janky little college dorm room. And it was like such a, I had put Adam on such a pedestal, and he became just such a, like, real, down-to-earth human. But it was like, wow, this is like, an accessible thing. You can just be a person who becomes a founder.

• 12:05Logan Bartlett?

  He too likes push lights or natty lights or whatever you were passing around.

• 12:09Speaker 02

  Yeah, and, and I mean, Adam is particularly that way.

• 12:12Logan Bartlett?

  Yeah.

• 12:13Speaker 02

  And an awesome founder and like, that was totally mind blowing. And I think it was probably around that time that Elliot, Calvin and I decided like, we should start a company together.

• 12:23Logan Bartlett?

  So this is junior year and you say, we're going to start a company and now you go on the hunt for ideas. And like, like many founders, you, you start with what you know or what's around you. And so that took you to the classroom, right?

• 12:38Speaker 02

  That's right. So we started hacking on classroom software. So it was initially called Bookzor, it was a horrible name that I came up with, and then Classmetric. And the idea was just like, sort of improving feedback loops and building tools for the classroom, since it was really the only thing we knew. And that was what we got into Y Combinator with the next spring. And one of the conditions for Y Combinator in the interview is they're like, are you going to drop out to do this? So we all said yes.

• 13:05Speaker 02

  And yeah, to our, to our surprise, they, they let us in.

• 13:10Speaker 02

  And so we spent the whole summer building Classmetric. The idea was to give students this button to push to say, I'm confused. And the professor would see this graph over time of how confused the students were. We thought it was cool.

• 13:23Speaker 02

  And then we started deploying it in the classroom and it was unmitigated disaster.

• 13:28Logan Bartlett?

  Having the laptop up, I imagine people were not.

• 13:31Speaker 02

  Horrible.

• 13:32Logan Bartlett?

  Yeah. Distracted by everything else that's on the internet.

• 13:36Speaker 02

  Yeah, exactly. So I remember we, at some point moved back to Boston, which is where all the universities were. And so that's where we were deploying it. It was like maybe September of 2011. And I remember standing in the back of this classroom at BU. And we were just counting screens of who was doing what. And I think at the beginning of class, it was like 60% of students were doing something off, off task. And by the end of the class, it was 80%. And like you'll never really know whether that's just generally the case.

• 14:05Logan Bartlett?

  Yeah.

• 14:05Speaker 02

  But it made it hyper visible.

• 14:07Logan Bartlett?

  The path not taken. People were probably doing that anyway, but yeah, definitely. Now, one thing just to back up to, the dropout decision is like, kind of lionized in Silicon Valley, sort of held on this pedestal. I don't think I've ever invested in a founder that's actually like dropped out and gone down that path. What was that? I mean, you made it whatever 20 years of your life, you got into MIT, you're going through this aerospace engineering. Making that decision, were your parents like, you know, WTF, what are you doing here? Or what was that like? The support group around you, was it enabled in MIT that, hey, people had done this in the past and so it wasn't as scary and you can hop back in? Or were you scared shitless to do it?

• 14:51Speaker 02

  To maybe preface it, MIT was more than just like, hey, I got into a school that I kind of liked. Like, you have to understand that almost every day of high school, I wore an MIT shirt. Like, I was like, I'm going to MIT.

• 15:03Logan Bartlett?

  I don't think MIT is many people's safety schools.

• 15:05Speaker 02

  Yeah, but it was like, really, it was really a big deal for me.

• 15:11Speaker 02

  And when I didn't get in early, I was decimated, absolutely decimated.

• 15:17Speaker 02

  So with that kind of backdrop, I think it was kind of a big deal.

• 15:20Logan Bartlett?

  Yeah.

• 15:21Speaker 02

  To leave, but I also, I didn't have that much left. I had like a senior project and like, you know, one or two other classes. Like, I, from a pragmatic perspective, I had basically done MIT, minus a few things. And a senior project, like a company, whatever, these things are kind of interchangeable. So that was kind of my mentality.

• 15:41Speaker 02

  My parents were supportive of sort of like whatever I wanted to do and sort of following my passions. And the key thing is MIT is very gracious about taking leaves of absence. They don't actually let you drop out on a dime.

• 15:57Logan Bartlett?

  I imagine that hurts their US News and World Report or something.

• 15:59Speaker 02

  Yeah, probably, I don't know. But you take a leave of absence. And so technically, my leave of absence actually expired last year.

• 16:05Logan Bartlett?

  Oh, wow.

• 16:05Speaker 02

  So they give you a 10-year window to come back and as long as you were doing something reasonable, I was like, starting a company is reasonable, you can just come back. So I actually think that that policy is quite enabling of people to go try interesting things at pretty low risk.

• 16:20Speaker 02

  So yeah, in some sense, dropping out is high risk, but in another, maybe more pragmatic sense, I actually didn't feel like I was taking a significant risk.

• 16:28Logan Bartlett?

  So you get accepted into Y Combinator, they're like, we like this idea, or we like your guys' background, you're willing to do this. And then the classroom metrics product doesn't have product market fit, quite literally. So what happens then? You see all the screens and how do you guys raise money at that point? Like, what do you do from there?

• 16:48Speaker 02

  Yeah, so we had gotten to demo day, we demonstrated the product, we had a bunch of professors signed up to try it. So I think we raised about 500, 600K coming out of demo day.

• 16:56Logan Bartlett?

  From angels, institutions?

• 16:58Speaker 02

  Angels, yeah. And a couple institutional investors, like NEA and Learn Capital and stuff like that. I guess now this would be like a pre-seed round or something like that, but it was a seed round at the time. Actually, I was raising that round whilst my co-founders had gone back to Boston, because we were going back there where users were. And I was sleeping on the floor of the Codecademy guys, Zach Sims and Ryan Bensky. And it was, they had just launched Codecademy and in three days had grown to 300 and something thousand users. And so they were like the darling of the batch. And so I was struggling to raise this like $600,000.

• 17:37Speaker 02

  And Zach was like, you know, meeting Kostel on his jet. And it was totally, that was, I got so stressed out and like jealous and like, it was horrible, it was frankly horrible for me, self-inflicted, but I just forgot to eat for three days. And eventually, like, you know, went to Chipotle and some new cook or whatever at Chipotle accidentally made me the largest burrito I've ever seen.

• 18:05Logan Bartlett?

  And maybe they just saw you and they're like, this guy needs, this guy needs a major, major burrito here. So Zach's going through that experience. I mean, Y Combinator is such an interesting thing, because the companies I've invested in that go through it, like, You sort of benchmark yourself. You start out benchmarking yourself against your cohort, right? And like the people around you. And then you move to like YC. And then eventually, you need to move to like, hey, you know, there's other companies out there in the world to compare yourself against. But YC is an amazing batch. I imagine it's motivating in some ways, but also really hard to see, like, you know, you don't have this level of product market fit. Zach's getting flown all around the country and people are probably kissing his ass left and right,

• 18:46Logan Bartlett?

  right? Was that like being in that in that moment, did it make you want to stop and just like, hey, we clearly don't have this figured out and go back to school? Or did you, what kept you plowing ahead?

• 18:59Speaker 02

  Actually, I think it was a sense of responsibility to my co-founders that kept me moving forward. Like, we were best friends. We were, I think, more committed to starting a company together and remaining friends through it than we were necessarily to like the idea or anything like that. And so I think I felt a really deep sense of responsibility to Calvin and Ian and like doing right by them. And I had been entrusted to go fundraise. And I was like, okay, I like, I will find a way to deliver.

• 19:27Logan Bartlett?

  So you fundraised on the idea, raised 600K?

• 19:30Speaker 02

  Yep.

• 19:31Logan Bartlett?

  And how long after did you pivot?

• 19:34Speaker 02

  Hmm, maybe two weeks.

• 19:35Logan Bartlett?

  Okay, so, quick.

• 19:37Speaker 02

  Yeah, literally, the money landed and it was like five days later, we were like, we just got back the first results from the classroom and this is a terrible idea.

• 19:43Logan Bartlett?

  You called up the investors and said that?

• 19:44Speaker 02

  Yeah, we called back the investors and we were like, hey, we just, we were super upfront about it. Here's what happened. If you want your money back, we'll wire it back. But otherwise, here's what we're gonna go do.

• 19:52Logan Bartlett?

  What were the points of validation before that? That like, was it just your own intuition? That like, hey, this idea should work? And professors saying like, yeah, that sounds good. And then, because it's interesting to go from, we can raise 600 grand off of it so quickly to like, yeah, no, never mind, right? After seeing the kids in the classroom actually use it. So how did those two things jive?

• 20:11Speaker 02

  So we had a whole bunch of classrooms signed up to try it.

• 20:14Logan Bartlett?

  So demand.

• 20:15Speaker 02

  Universities that had great logos, right? Like MIT, Stanford, BU. But there was a gap to like what actually happens when you put it in the classroom. And so even though there were professors who could be convinced that it might be a good idea in practice.

• 20:33Logan Bartlett?

  Yeah, top-down sale, bottom-up adoption, those can lead to being out.

• 20:37Speaker 02

  And it was like you have demo day and then literally like a week later, the school year starts. So this is all these artificial boundaries that.

• 20:44Logan Bartlett?

  Interesting. So you had interesting time like that actually you could actually.

• 20:48Speaker 02

  If it had been two weeks later, we probably wouldn't have raised. This is like bizarre.

• 20:51Logan Bartlett?

  It's interesting. Yeah. The road not taken. So, so two weeks, you're like, hey, you can take, you ended up offering some people their money back, right? Or everyone their money back and some people took it?

• 21:00Speaker 02

  We offered everyone their money back. One institutional investor who had committed to LPs to only invest in education had to take it back. According to their bylaws, fine.

• 21:08Logan Bartlett?

  Ouch.

• 21:08Speaker 02

  And then another angel investor took it back by choice, which is like, nothing against them. It was probably a reasonable choice at the time. I know another investor who I'm good friends with today and is also an investor in charm. I know wrote it off as a tax loss in that moment. Probably the fastest write-off, but he later rediscovered that we were doing well and has been a great friend and supporter.

• 21:29Logan Bartlett?

  So then you pivoted to an analytics, mixed panel, amplitude, kind of because that was something else that you knew. You were like, hey, we should have figured this problem out sooner. We should have been able to have analytics on usage and not just survey people in the back of the classroom.

• 21:44Speaker 02

  That's right. Yeah. We were like, how janky is this that we have to stand in the back of the classroom to like, understand what's going on? We should be able to figure this out in a web analytics tool. And so we started building that. And it turns out that's a really tough market, really, really tough market, super competitive. I think it's a little bit of like a honeypot idea. Where a lot of technical founders kind of find it interesting and sort of migrate towards it. And it's just not actually a great business, nor a big market.

• 22:14Logan Bartlett?

  I'll defend my former, or I guess investment in Amplitude. They're doing well as a public company, but yes, it is one of those things.

• 22:21Speaker 02

  Amplitude's the exception.

• 22:22Logan Bartlett?

  It's almost like salespeople. Get drawn to like BDR automation or something, right? Like, everyone sort of has this intuition that, hey, I could do this better. And then they go down the path of doing it. I feel like engineers sometimes with like Git or, you know, C I C D. Or, hey, I can build a better VS code or I, you know, something like that. It's like, if it's so clearly in your face, everyone else is thought of that as well. Right? So you guys worked on it for how long?

• 22:51Speaker 02

  We worked on it for about a year. Well, a little more than a year, actually.

• 22:55Logan Bartlett?

  And did you get paying customers?

• 22:57Speaker 02

  We never got a paying, single paying customer for it. I'm not even sure that we actually ever even launched it. We built a lot. We had beta users who were sort of trialing it. And what we found is that we just couldn't, yeah, we just couldn't find the right, couldn't find the right fit with it. I think at one point, we even ran this experiment where we not only had all the charts and everything that you would expect out of a web analytics tool, but we also went all the way to what we called automatic insights. And so we'd literally, it would go through and look for any statistical anomalies and then draw those out and say like, oh, well, like here's what's, you know, here's an interesting insight. And what was fascinating to me is that when people would see it as an automatic insight, they would be like, oh, well, that's obvious.

• 23:41Speaker 02

  But it's 100% the sort of thing where if you had someone build a narrative around it, instead of just presenting it, people would have found it fascinating. And so anyways, we tried a lot. And by the time we got to like December 2012, we were like, this isn't going to work. And the stress level that I was carrying at that point, as I think my co-founders was as well, was like unbelievable. I've never been that stressed. Like I, I think I lost like 10 pounds in two weeks. I went to the hospital multiple times for panic attacks. Like I was, I was, my body was reaching its end.

• 24:17Logan Bartlett?

  And was it just the, I'm putting forth everything I possibly can into this and I'm getting no positive affirmation?

• 24:24Speaker 02

  Yeah, zero.

• 24:24Logan Bartlett?

  Yeah, any progress around this.

• 24:26Speaker 02

  And the culmination was we went, we were like, okay, we're, we're well and truly stuck. We need to go to Y C office hours. And so we. We went down and had office hours with PG. And we were like walking around the little cul-de-sac there. And he sort of stopped and he's like, yeah, so just to be clear, you've spent half a million dollars and you have nothing to show for it. And like, that was, that was the.

• 24:51Logan Bartlett?

  You're like, well, I've been to the hospital twice. So it's a little more than that if you count, yeah, all those bills. Um, yeah, okay. And so, so you're like, this isn't working. We need to stop. And so then the segment story was what?

• 25:03Speaker 02

  So we had a few different ideas that we were arguing about. But my co-founder, Ian and maybe Calvin, I don't know, one of the other guys was like, I think there's a big business behind Analytics JS. And so Analytics JS was this small, open source library that we'd actually started building a year and a half prior, like at the very beginning of Classmetric. And all it did is it sent the analytics data to both Mixpanel and Google Analytics and eventually ourselves. That was it. It was like, I don't know, 100, 200, maybe 300 lines of code. Not much to it. And anyways, he had a vision for it. There was like a, the Analytics JS manifesto that they'd written up. I think we still have a link to the GitHub memo.

• 25:46Speaker 02

  And so they were kind of pitching this as an idea. And I was like, oh God, this is a terrible idea. How do I kill this? Jesus. And so I like went home and I was like racking my brains. I was talking to Eric about how terrible, my wife, about how terrible of an idea this was. And I like went to sleep. I was up all night trying to figure out, I was like, okay, fine. All right, I have an idea of how to kill this thing. Came in the next day and I was like, all right, guys, here's what we're going to do. Let's build a landing page. We'll post it on Hacker News and we'll just like immediately test product market fit. And I was like, this will kill it. And so we did that. And on December 12th, 2012, 12/12/12, we posted it up on Hacker News and it went straight to the top.

• 26:27Speaker 02

  And I think it took us all like thousands of stars on GitHub, thousands of email signups, people reaching out to us on LinkedIn demanding access to the beta. Like it just, on every dimension, it just kind of took off. And weirdly, it was very exciting, but we were all still so depressed from the year and a half of a failure that it took almost like another six weeks for us to start to feel positive about it. We had so much downswing momentum.

• 26:53Logan Bartlett?

  Well, I imagine some of your co-founders too were like validated by, at least they thought it was, this was a good idea. There was a manifesto out there. Meanwhile, you're like, hey, I had these other two ideas and they were wrong. And then I tried to have this third idea killed and I was wrong, right? So I imagine that was probably a weird feeling too, right?

• 27:12Speaker 02

  Totally, yeah. Yeah, I was wrong in both dimensions three times. Both directions three times, yeah.

• 27:16Logan Bartlett?

  And so, I mean, I remember the early days of Segment and it felt from the outside in like you guys just captured this zeitgeist thing that like, there was this product market fit. I almost equate it to like, I don't know, Twitter on the consumer side that like, hey, there was just such viral adoption and pull for it. What did you tap into? I mean, clearly the market was there for it, right? But like, what do you think the inputs into that were that allowed you to so deeply resonate in the valley at the time?

• 27:46Speaker 02

  I think the broader marketing technology ecosystem was like taking off at the time. So the number of tools and ideas that people had for what to do with data was exploding. It's like, send emails, send text messages, like change how ads are displayed in 17 gazillion different ways. Change how you, your onboarding flow works, like study the data in a data warehouse. Like all of these things were like just coming into fruition as cloud services for the first time. And people were wanting to experiment a lot with these different tools and use, you know, all these different things. And it was just a freaking nightmare to install all that. And then what Segment does to solve that is collect the data once and distribute it to all these different places.

• 28:28Logan Bartlett?

  So it enabled the iteration of the nth analytics tool that you're, someone else found the honeypot and decided, I'm going to go build a better mixed panel. And it made it easier for people to test out, like, okay, well, if you want to do it, we don't have to write this in every single time. Segment can be the canonical source of data for all that. And so now you're in this vortex and like the product market fit was there and it just sort of caught like wildfire. And so are you dealing with, how much was product evolution and like the different left and right that you needed to go versus just servicing the demand for what you already had in those initial days?

• 29:10Speaker 02

  So maybe one thing to clarify is it didn't feel like this like, the product market fit moment was explosive, but after that, it did not feel like it just took off. It didn't, it didn't take off in like some kind of exponential way like a Twitter or something like that would in terms of number of people adopting. In fact, if you look at in those early days of like the growth rate of total number of users, it was almost perfectly linear. And I remember PG looked at the graph and he's like, what are you doing to drive this? I was like, we're not doing anything. He's like, are you sure you're not advertising? Cause this looks like you're spending exactly the same amount of money every month, every week. And it's just like perfect line. It's like, no, that's just how it's happening. It's

• 29:51Speaker 02

  like, I've never seen a line that straight before in my life. And so I think in many ways, the story of Segment actually was one of continuous product evolution that increased the value, but the total number of websites adopting it never really accelerated that much. So we had pretty linear adoption of sites, but the sites that were adopting it and apps and so on, companies that were adopting it became larger and larger and the price that they were willing to pay for it went exponential. Like the first pricing plan, I think that we offered was like $10 a month or something. And by the end, by the time I left, not by then, still doing great. By the time I left, the highest price points were in the mid seven figures.

• 30:36Logan Bartlett?

  And you had to learn how to ask people for money, right? Which is, which is a very different mindset. You build this thing and now you're like, well, I gotta go demand people pay. So maybe take through the pricing. I mean, pricing is always a topic with B2B companies in general, but what was the story of walking into Nat's office or whatever it was and demanding higher price?

• 30:58Speaker 02

  Yeah, I think Zambren, Nat Friedman, who later became CEO of GitHub.

• 31:03Logan Bartlett?

  Now seems to run Silicon Valley, I guess.

• 31:06Speaker 02

  Doing all kinds of things, yeah. Anyways, he was running Zambren at the time and they were using the product, but I don't think we're paying anything. We're paying like $200 a month or something like that. And we had just brought in a sales advisor because I was clearly struggling to close our first like enterprise contracts. And he's like, the sales advisor was like, Peter, this product is worth at least $50,000 a year. Like you have to, you have to charge for that. Probably more like $120,000 a year. So we, we go to the, he and I are walking over to Zambren office and just before we get to the door, he's like, Peter, in this meeting, you have to ask for $120,000. I was like, come on, man. Like, that's crazy. They're currently paying like a miniscule fraction of that. He's like, nope, that's just what enterprise software costs. If you won't ask for it, then I quit.

• 31:51Speaker 02

  Okay, fine. So we walk into this meeting. It was great. Now he's really excited about it. He's like, okay, what does it cost to like get the enterprise version or whatever? And I was like, $120,000. I turned beet red. And I was so embarrassed. I was like, didn't know what to do. I was just like, sat there quietly and he's like, okay, well, how about $12,000 a year? And I was like, how about 18? He's like, okay. And like, I was in shock because the 18 was, whatever that is, 150x what we had been charging before. And to him, it was 85% off. And yeah, I was just completely blown away. I was like, there's like pricing on a different dimension. Like, I don't even understand what's going on here.

• 32:34Speaker 02

  And what I started to learn was the difference, which sounds obvious, between value-based pricing and cost-based pricing. And we were completely in a cost-based mentality, coming from open source and like our own time on these things. And, you know, what enterprises pay is based on ROI, is based on value. And your demonstration of that value. And so, yeah, over time, it turns out that the product that we had was extremely valuable. And it got more and more sort of like exponentially valuable as you get into bigger and bigger companies. Because if you're even ZAMRAN, you have a website, a mobile app, and like a web app or something, you have a few data sources, maybe Salesforce. If you are someplace like Nike, you have like a dozen different mobile apps, you have

• 33:18Speaker 02

  a dozen different websites, you have point-of-sale systems, you have a whole bunch of different like sales and marketing tools that are all trying to get interconnected. You have support systems in different countries. Like your complexity of data structure has gone completely exponential. And so the value to Nike of solving that problem is drastically higher than it is for a smaller company. And so I think in many ways, the story of Segment was slowly understanding and delivering higher value into these bigger companies and the price increasing over time to support that.

• 33:50Logan Bartlett?

  What did you learn through that whole process that is, I don't know, extrapolable for entrepreneurs about the process of like finding product-market fit? I've heard you rail on the Airbnb founding story as like maybe destructive to entrepreneurs and how they should actually figure out what's going to make sense in the world or the Steve Jobs version of all this stuff. But like, what did you learn in that process? And what are some of the lessons that you would say for people that are looking to solve, you know?

• 34:22Speaker 02

  Yeah, I think the Airbnb story is like a fairy tale, basically, which is like, well, you have your vision of the world and you just stick with it long enough and like great things happen. And like, that's a great recipe for just like being broke and lonely in an apartment and like not ever building anything anyone wants.

• 34:39Logan Bartlett?

  That's a fool by randomness thing. It's like that survivorship bias of, yeah, they made it, but how many people are crazy?

• 34:45Speaker 02

  Great fairy tale, not a methodology.

• 34:47Logan Bartlett?

  Yeah.

• 34:48Speaker 02

  And by contrast, I think. The, what I've learned is that to pivot quickly, much more like the Codecademy guys, actually, those guys pivoted 12 times in YC, I think, to pivot very quickly and test the value, and this works particularly well in B2B, less so in consumer, but to really test the value, you go and you try to sell it, right? You go and you try to say like, okay, what would this product be worth to you? Okay, I haven't built it yet, but like, will you sign a contract that if I deliver it, you'll pay $100,000? And like, if you can really like, test that value, the process of discovery and sales qualification is effectively the same thing as testing for product market fit. So I actually think sales, or very early

• 35:32Speaker 02

  sales on the search for product market fit are actually very tightly intertwined. And it's a much more repeatable way of actually finding interesting opportunities.

• 35:41Logan Bartlett?

  When you're lost in that journey, how do you keep going? Or what are the points of feedback that you remember along the way? I mean, it was kind of nothing, nothing, and then like, somewhat of a, at least, hey, now we have it, right? But like, iterating to get there, the points of validation that you got along the way, was it just, hey, I'm in this with my buddies, and we're going to figure this out?

• 36:02Speaker 02

  That's right. I don't think we had any real external validation along the way. What was important to us was that we were best friends and working on this thing.

• 36:09Logan Bartlett?

  Yeah, interesting. So the segment journey, you grew quickly as you sort of figured out the pricing and all of that. And then ultimately, $3.2 billion acquisition by Twilio. Along the way, what, any key, I mean, I'm sure hundreds of thousands of key learnings, but anything along the way that was particularly notable that you sort of have brought with you to charm in terms of process or things you would have done differently through that journey?

• 36:42Speaker 02

  Oh, boy. I mean, certainly, certainly the pricing stuff that we just talked about. I think also,

• 36:54Speaker 02

  Sales as a method for actually understanding the customer better. I think it's easy to have this sort of TV vision of sales, which is like the scuzzy salesperson in the used car lot or whatever, who is just like pushy. Like, that's not effective sales. And I think this was maybe best illustrated to me, actually, by our second sales rep, Chris Cerdy. And in the hiring process, like, I was like, we can't hire this guy. It's like slicked back hair, jersey. I was like, this guy's gonna sell to developers? You gotta be fucking kidding me. Like, there's just gonna be like allergic reaction, right?

• 37:34Speaker 02

  And what blew me away was, I mean, the guy crushed his number every year. I think his top rep, basically, almost every year, if not every year.

• 37:46Logan Bartlett?

  He's gonna get a bunch of inbounds on LinkedIn right now.

• 37:48Speaker 02

  Yeah, yeah. And like, I clearly did not understand something, right? Like, the performance did not match my expectations. And so I spent time with him, traveling around, meeting with customers. And what I noticed, he was, he would ask questions, discovery questions, that were like deeply uncomfortable, like deeply uncomfortable from everyone from our side. You know, a customer would be like, oh, well, like, can you tell me a bit more about Segman? He's like, before we get into that, can you tell me why we're here today? And you're just like, that's a little awkward. And the person would be like, well, and they're a little discombobulated. And they're like, well, you know, I guess there's like, we're interested in how to solve our data problems. He's like, why? Like, almost accusatory, you know? And they're like, well, again, taken aback.

• 38:33Speaker 02

  And then maybe start explaining it more. And he's like, but why is that a problem? You know, he's like, this challenging, like, five whys, like, really unexpectedly deep. And they would basically outline the entire ROI case before we even got started as to like, what their actual problem was and how much it was worth to them, maybe not quantitatively, but qualitatively at least. And then the sales process was like kind of a slam dunk after that. And they felt like he actually understood them because everything that he was talking about after that was directly targeting their actual pain points as opposed to our imagination of their pain points. And so they loved him. And so that concept of like deeper discovery, to the point of like awkwardness in the conversation.

• 39:15Speaker 02

  Actually being the basis for like a good relationship between the salesperson and the customer was pretty mind blowing to me. And I think became the basis of what I now think of as how I would search or do search for product market fit, which is much more like a sales discovery motion in that same vein.

• 39:32Logan Bartlett?

  And so what was the ultimate decision? So November 2020, the acquisition was announced. I assume you and the Twilio folks had conversations well before then. Getting off, you stayed on for a little while after, but that decision is I'm sure a very personal one, as well as there's implications for your co-founders and families and the entire company. What was the thought process at that moment in time to like, this is the right time to exit?

• 40:01Speaker 02

  Yeah.

• 40:03Speaker 02

  I mean, in retrospect, it was like, you know, great market conditions.

• 40:06Logan Bartlett?

  Sure.

• 40:08Speaker 02

  But I won't claim kind of.

• 40:09Logan Bartlett?

  Yeah. Impressionists on that.

• 40:10Speaker 02

  Impressionists on that, yeah.

• 40:13Speaker 02

  The real driver for us was that I had seen the market in a very particular way, which was that the data was going to be the center of everything. That was my view. And that by sort of increasing our data gravity over time, everything would kind of slowly accelerate around segment. And, but I saw every customer talk to us about it as their data, as opposed to about how they did their marketing per se, right? It was, these were two separate concepts that needed to be connected on the backend, but were two separate concepts.

• 40:54Speaker 02

  And when Jeff first chatted with me, I think in 2019, it's like a year and a half before the acquisition, he's like, hey, customers want to communicate better with their customers. They want to send better messages. They want to engage with them better. And.

• 41:12Speaker 02

  That's how they're talking about it. And we could build that together, right? With your data and our communication channels, we could actually do the engagement better. And I was like, that's not, I don't think that's a thing. Like, it's really about the data. And if they have the data, they understand they can do all these things. And what happened over the year between that, or the sort of intervening year, was that I saw customers actually start to talk about it that way. They're like, yeah, the data is great, but like, I really want to be able to communicate with my customers. It's not enough to have the data. I actually want to turn it into action. And so, one, that vision became much more appealing. Two, Twilio became a very natural partner in executing on that.

• 41:54Speaker 02

  And that was the product that then, within Twilio, we launched at Signal, I guess a little over a year ago,

• 42:03Speaker 02

  Engage, which is like tying these two things together that way. So that vision was very appealing. You know, COVID was also like brutal. We'd just done a riff.

• 42:14Speaker 02

  So it was, it was the right strategic decision for the company.

• 42:20Speaker 02

  And, yeah, I mean, after the acquisition closed, segment was accelerated dramatically on the sales side, which I think is entirely due to the segment sales leadership, Joe Morrissey, who's now a GP at Andreessen, and Katrina Wong, who's on the marketing side and still at Twilio.

• 42:39Logan Bartlett?

  What, as you're sort of weighing those options, the constituents you have in mind, obviously, there's your employees, your co-founders, your shareholders, all of that. Are you trying to balance, and then at a personal level, like, you know, you're no longer going to get to be the only one that calls the shots in the way that you are when you're an independent standalone CEO, right? Board governance and all that included. But how did you sort of think through, were you just sort of equally weighing all of them together? Did you have a North Star on, hey, one person, you know, one group versus another?

• 43:16Speaker 02

  I put a lot of weight on the team, a lot of weight on the team.

• 43:21Logan Bartlett?

  Does that mean company or co-founders or both?

• 43:24Speaker 02

  Uh, both.

• 43:25Logan Bartlett?

  Yeah.

• 43:25Speaker 02

  But, uh, really like, I mean, co-founders sort of second to, to the rest of the team. I'll give an example of that in a second. I, I do think I also, like personally, I knew that I didn't want to stay in software forever. Like, the reason that I had gotten into software in the first place was, uh, that like, I want to start a company, started a company with my, with my roommates, right? And we like wanted to work together. And, um, I don't know that they were long for it at that point. I think they wanted to do other things. And so my motivation of being like tied to these people was also diminished.

• 44:03Speaker 02

  And like, I knew eventually I wanted to get back into hardware. Like that was where I started in aerospace and like, something about the tangibility, you know? Like here, uh, out on the floor, we're like, we build stuff and I like, got into the field and there's like, you know, bio oil flowing underground, which I haven't gotten to yet, but like, the tangibility of, of what's happening is really meaningful to me and like my day-to-day motivation. And at Segment, it's like a meta analytics data layer that like exists in the cloud and like, you know, electrons are flowing somewhere. And so I, I do think there's a very personal component here that I don't want to discount. But in how we went about doing it, I am very proud of actually of how much emphasis we, we put on the team.

• 44:47Speaker 02

  And not just in the negotiation of it, um, but also in things that we did like eight years prior. So when we were, maybe 2015 or so, we changed the option exercise window to basically be the maximum allowable, which is somewhat common now, was not common at all at the time.

• 45:08Logan Bartlett?

  What is maximum allowable, 10 years?

• 45:10Speaker 02

  Uh, I think it's 10 years, yeah.

• 45:13Speaker 02

  And that one decision of changing the exercise window, I think changed the, the economic outcome for several hundred people from nothing to millionaires. And like,

• 45:28Speaker 02

  To be able to see that outcome for all these people who were not even the it mattered for the people who weren't at the company anymore, but who had been very involved and critical in the early stages of building the company and making it all possible. So to see them have like a significant life outcome from it was super, super meaningful. And anyway, there's like a handful, half dozen things like that that we really fought for in, in how it all played out over the full 10 year arc of the company. And I'm super proud of them.

• 45:58Logan Bartlett?

  Yeah, I appreciate you talking about the personal side of it because from the outside in, I had no knowledge of it, but I, I kind of got the feeling like segment was so is so strategically valuable, right? Like I was an investor in Pendo and Amplitude and Braze and the number of board meetings I had talking about segment in some way, shape or form, you know, it's like, it's a very important partner and also to all those, you know, to a bunch of people could be a potential competitor, right?

• 46:26Speaker 02

  And We always had an option call on going from the data up into any of the communications.

• 46:31Logan Bartlett?

  Yeah, you could go from the infrastructure to the application, right? And, you know, and so it's, it's very strategic real estate that you could go do interesting stuff with. And so it was interesting from a, as someone that appreciates, you know, competitive dynamics and all that stuff, it both felt like it made so much strategic sense for Twilio. It was certainly in retrospect, an amazing valuation and outcome for that. But I, I also kind of got the feeling that you, and now we can talk about this, but had bigger ambitions than being B2B software and just, you know, being the king of, of segment as a $20 billion

• 47:11Logan Bartlett?

  public company. And so it's, I appreciate, I appreciate you saying that because I've, I've heard, you know, People can want to go after other ambitious things, right? Along the way, you don't have to stay a B2B software investor or B2B software entrepreneur. So was charm in the back of your mind as like, hey, I want to do something in climate tech? Or like, what was rattling around your brain at the exact moment?

• 47:38Speaker 02

  Yeah, I mean, the charm story starts in 2015, actually. So in 2015, I tried to buy offsets for Segment.

• 47:45Logan Bartlett?

  And maybe explain offsets, what that means.

• 47:47Speaker 02

  Yeah, carbon offsets. So this is like, you know, I emit by buying electricity and I want to make sure that that has no net impact in terms of CO2 emitted. So I buy an offset that removes theoretically, removes from CO2 from the atmosphere. Now, it turns out in practice, basically all offsets are garbage. And so in 2015 and 16, that's what I learned. And so we went and bought a bunch of offsets. Then I was like, what the heck happened here? And then it turned out like, oh geez, like nothing, maybe it had good ecosystem effects. It was like protected forest in Brazil and Indonesia, whatever. Great, proud of those ecosystem impacts, but like, carbon impact, not so clear.

• 48:23Logan Bartlett?

  And so in you're doing this, like the concept of an offset, you're doing this to be net neutral, that your footprint that you're making by doing whatever it is you're doing as a business is neutral to the atmosphere. And you're doing this as a good corporate steward, someone that believes that not just profit, it's not financially, purely financially motivated for most companies.

• 48:47Speaker 02

  Yeah, that's correct. And I think you can make arguments around employer branding and other things if you want, but I also think it's just like the right thing to do.

• 48:56Logan Bartlett?

  Yes. And so you start going down this path, 2015, 16, hey, Segment, we, you probably don't have as big of a carbon footprint as a industrial manufacturer, but you still are flying salespeople around the country, you still are powering electricity, all that stuff. And so how do we offset this in some way? And so you bought some, effectively bought some rainforest and protected that area?

• 49:19Speaker 02

  Yeah. And the question is like, okay, if you take oil out of the ground and you burn it and you put it in the atmosphere for the next 500,000 years, right? That CO2 is not coming out, so it's out there now. And then you protect a tree for 40 years. Have you really undone what you just did by burning it? No, the answer is no. So.

• 49:36Logan Bartlett?

  And by the way, the, in 2016, are there companies that you're able to go through to do this? Like, who are you interfacing with?

• 49:42Speaker 02

  There are. It turns out, in retrospect, when you go back and, you know, like Berkeley Carbon Trading Group has done an analysis as well. Now a formal, like, academic analysis of what's the quality of those? Like, 95 to 99% are just worthless from a carbon impact perspective. And so that was the feeling that I got when I went and inspected these things more closely. But it's now backed up by the, by the literature as well. And so basically, I was like, uh-oh, there's no good product here. This is a problem. So I started as a buyer. And then in 2016, I was like, you know, this will get solved when Clinton is elected. That's naive on like six different levels, but we know how that election went. And so in 2017, I was like, hmm, well, I wonder if there's a profitable way to do this.

• 50:25Logan Bartlett?

  And by the way, 2016, it would be solved because the government would, like, what, what did you think was actually gonna happen from the government?

• 50:31Speaker 02

  They would regulate, like, auditing and quality that would ensure that these things became.

• 50:35Logan Bartlett?

  It wasn't just gonna be bullshit on the backend.

• 50:36Speaker 02

  Yeah, exactly.

• 50:39Speaker 02

  Again, naive on, like, a lot of different levels.

• 50:43Speaker 02

  Technically, politically, etc.

• 50:46Speaker 02

  But in 2017, then, I spent every Saturday with some friends trying to figure out if there was a profitable pathway to sequester carbon and ideally drive industrial decarbonization. Because now I was starting to learn that, like, you know, electrifying car transport, looks like it's on a pretty good path. Electrifying the grid, looks like it's on a pretty good path, at least technologically. Like, huge amounts of deployment yet to come, but like largely, we kind of see what the solution is gonna look like. Industrial decarbonization, we have no idea. No idea. Like, there are a half dozen at best companies making a legitimate shot on goal for decarbonizing steel production. 8% of global emissions, if we don't figure it out, like... We have to figure it out.

• 51:29Logan Bartlett?

  Your Tesla is not going to matter if we can't figure out all this.

• 51:32Speaker 02

  Yeah, and there has only ever been 100 tons of fossil-free steel delivered ever. It just has not been, it's not a solved problem.

• 51:43Logan Bartlett?

  What percentage, I mean.

• 51:45Speaker 02

  Oh, sorry. Out of 3 billion tons per year, we have one company delivered 100 tons last year. There will be zero deliveries this year.

• 51:51Logan Bartlett?

  Yeah.

• 51:52Speaker 02

  Zero deliveries next year. There are forecasted to be deliveries, I believe, starting in 2026.

• 51:56Logan Bartlett?

  Got it. So drop of the bucket.

• 51:58Speaker 02

  Yeah, nothing.

• 51:58Logan Bartlett?

  So you're spending your, quite literally, nights and weekends. How big of a company, so segment you sold in 2020? You had about 600 people. And so this is as you have hundreds of people, your Saturdays are kind of spent just exploring this.

• 52:12Speaker 02

  On the ramp from 150 to 600.

• 52:14Logan Bartlett?

  150 to 600. And so you're figuring this out and also running a company. And so what did you find during that journey, besides that there was a lot of bullshit and no one was making tangible progress?

• 52:28Speaker 02

  What we found was a very specific pathway that we got pretty excited about at the end of 2017, which was to take waste biomass, so like this corn stover,

• 52:40Speaker 02

  which is like the straw and leaves of corn.

• 52:42Logan Bartlett?

  These aren't spices.

• 52:42Speaker 02

  No, no. So take that corn stover, that corn straw, and cook it. And when you sort of cook it, you get out some effectively fossil fuel replacement, which we'll get more into in a minute, and you get out char, which is like charcoal, it's this stuff right here.

• 53:03Logan Bartlett?

  Yep.

• 53:04Speaker 02

  Sort of a black powder with ash and stuff, nutrients. So that goes back in the soil, and you get at least some short-term carbon storage. And then you decarbonize the industrial process. And so we were like, great, this is a super cool pathway. We're going to get at least some short-term carbon removal, or carbon sequestration, and we'll decarbonize an industrial process at the same time.

• 53:24Logan Bartlett?

  And so, I'm sorry, forgive my simple B2B software investor brain. But so you're doing that, and how does that actually get the carbon out of the atmosphere?

• 53:34Speaker 02

  So the CO2 comes from the atmosphere into the plant.

• 53:37Logan Bartlett?

  Yep.

• 53:38Speaker 02

  As the plant is growing.

• 53:39Logan Bartlett?

  Yep.

• 53:39Speaker 02

  Then some of that carbon ends up in this somewhat solid form of char and goes into the soil. And then the rest of it comes out, now it comes out as bio oil, this liquid.

• 53:55Speaker 02

  Stuff and it then can go be used as fossil fuel replacement in industrial processes like iron making or or what have you downstream. So you decarbonize the industrial process and you end up with some carbon that would have just rotted and returned to the atmosphere that's now stored for a longer period of time. That was the original idea.

• 54:11Logan Bartlett?

  And what did you learn?

• 54:13Speaker 02

  What we learned about two years in is that it was not economical to transport the biomass to the industrial facility. And so this is like a we're getting a little into the weeds here, but like the technicality was like, oh shit, we just can't, you can't physically transport the biomass far enough cheaply enough to make this whole thing pencil.

• 54:32Logan Bartlett?

  And it wasn't one of those things that, hey, with scale or over time, it's going to work. You the lines just didn't cross at some point in the future.

• 54:39Speaker 02

  That's right. Yeah, you could just see it. This is like never gonna never gonna pencil. And so that was a crisis. That was, I believe, in 20, end of 2019. And my co-founder Sean had two breakthroughs. His first breakthrough was that rather than just producing char and a syn gas, which we didn't really talk about, that was sort of the fossil fuel replacement, we could shift the process and produce this liquid bio oil on site. So at the field edge, we would convert it into the biomass into these two, the solid char, which goes back on the field, and the liquid, which then is highly transportable. So now we have a dense, carbon-rich, somewhat energy poor, but fluid that's easy to transport by truck or rail. This solves the economic problem because you don't transport the low-density, hard-to-move

• 55:24Speaker 02

  biomass, and you just transport this super-dense liquid. So all of a sudden, the economics start working in the long run. The problem is now the short run, where like, we don't have a premium enough buyer, right? And this is where the product market fit stuff that we were talking about before of like, how do you find someone who's willing to pay a good price for it? We didn't have someone who was willing to pay a high enough price to get us started for this industrial decarbonization pathway. And this is where Sean had his second breakthrough. So he was trying to figure out, we had made some bio oil, and he was trying to figure out how to dispose of it. And I thought this was like, a little bit of unnecessary goose chase. And I was like, come on, can we just focus on the problem here of like, who's gonna, who's gonna buy the bio oil?

• 56:05Logan Bartlett?

  Yeah.

• 56:05Speaker 02

  At what price? And he's like, no, no, we've made a gallon. It's proper to dispose of these things properly. So I'm gonna go research it. Okay, fine. So he goes off and he comes back like, I don't know, a week or two later, he's like, okay, we can either dispose of it in a disposal well, like injected underground, or we can have it flared.

• 56:24Speaker 02

  And incinerated. And I was like, again, I don't care.

• 56:28Logan Bartlett?

  Yeah.

• 56:29Speaker 02

  Whatever works. And then the next day, I think he comes back, he's like, if we put it underground in an injection well, isn't that carbon removal? Because the CO2 came out of the atmosphere into the plant, into the bio oil and ends up permanently underground. Like, hmm, doesn't Stripe have an RFP for carbon removal? Payments company? Yeah. All right. Let's run the model. See how expensive it is. Holy smokes. It's cheaper than direct air capture. Like the best sort of carbon removal option known at the time. It's like, okay. So we applied to Stripe in their very first round of RFPs. And they made a purchase. And it was like a $250,000 purchase, turned it around in like 96 hours or something like that.

• 57:08Speaker 02

  And we're sort of like, had this major discovery of like, oh, wow, there's a premium market that's willing to pay for the really high carbon value of the buy.

• 57:16Logan Bartlett?

  And who is that? Who's willing to pay for the high value carbon?

• 57:20Speaker 02

  Basically the carbon offset, full circle, full circle back to the carbon offsets market.

• 57:23Logan Bartlett?

  Got it.

• 57:23Speaker 02

  Right. Because like when you pump this stuff underground, it's gone, it's permanent and it's super verifiable.

• 57:28Logan Bartlett?

  Yep.

• 57:29Speaker 02

  And that's worth a premium. And so that's what Stripe and then later Shopify and then later Microsoft were, were willing to, willing to pay for. And so

• 57:41Speaker 02

  basically, and as we were going through this transformation, Segment was also going through its sale. And so about halfway through 2021, it was like taking off. I was like, okay, like, how will I judge myself? You know, if I like, don't go see through a like

• 57:59Logan Bartlett?

  Totally.

• 57:59Speaker 02

  major potential solution for decarbonizing industry and, and carbon removal if I don't, if I don't see this through.

• 58:05Logan Bartlett?

  Yeah. Well, I imagine I'm doing a little bit of math that you left in, you sold in November, you left in summer of 2021. So you probably

• 58:12Speaker 02

  No, no, I left in January of 22.

• 58:14Logan Bartlett?

  22. Okay. Yeah. I was doing some vesting, schedule type stuff, but I imagine this was a, probably staying at Segment would have Probably was a financially lucrative path as well.

• 58:25Speaker 02

  That's correct.

• 58:26Logan Bartlett?

  But this was more of a, yeah, a mission and passion to go do it. And so today, the market as it stands, so you talk about there's Shopify, there's Stripe, there's Microsoft, there's people that are doing this to be good corporate stewards, right? And that's one market. And I assume that's a pretty big market. It sounds like people are willing to pay a fair amount for that. But how do you sort of break up the segments? And there's the kind of carbon offset, you know, all the government aspect of it. So what are the different market aspects here?

• 58:59Speaker 02

  Yeah, we split our go-to-market into three motions. There's the most premium market segment, which is voluntary carbon removals. These are corporate buyers like we just talked about.

• 59:09Speaker 02

  That will help us come down the cost curve into the regulatory market segment. This is regulated markets where it's still corporate buyers, but they're required to buy some form of offset. Like the low-carbon fuel standard in California, for example, creates effectively a cap-and-trade system.

• 59:29Speaker 02

  Or there's the 45Q tax credit, which basically just now does a direct pay for if you put carbon underground, you can get paid for that. So that's the regulatory market.

• 59:41Logan Bartlett?

  And those are mostly like industrial manufacturers? It's anyone that the government has said, hey, you need to do this. You're putting a big carbon footprint out there.

• 59:50Speaker 02

  Yeah, exactly. And this is a very small proportion of the economy today, but presumably will grow. I think there are other interesting forces at work. A huge number of companies have made net zero commitments now, which is that they, by some period in, you know, by 2030 or 2040, 2050, will remove as much carbon from the atmosphere as they are emitting.

• 1:00:11Speaker 02

  And those...

• 1:00:15Speaker 02

  You know, that means that there will be sort of increasing buyers over time as they run through their reductions first, which is great, and then they'll start to need removals to deal with some of the remaining hard to abate sectors. For example, flying people around, that kind of thing. And investors, I think, are on Wall Street now are very dialed in on when a company makes a net zero commitment, are they actually standing by it? And like, that's important for how people have decided to allocate towards, you know, ESG funds and so on. And so there's a lot of pressure for, because people are investing on the basis of some of these environmental claims and emissions claims, for the SEC to create a little bit

• 1:00:56Speaker 02

  more regulation and clarity around, okay, if you make a net zero commitment, how are you doing that accounting? Right? What are your emissions? If people are investing on the basis of these emissions, then there need to be some standards. And so the SEC is, I think, working towards a world where the accounting is more standardized. And I think that that will create clarity and raise the bar for the quality of removals that people are buying to offset some of these things. So I think the voluntary market will get substantially larger, and over time, the regulatory markets will get substantially larger. All of that has accelerated dramatically in the last two years. The third market for us really is the iron making market.

• 1:01:38Speaker 02

  So we can use the bio oil to make iron and make it fossil free. Out of that process, we also still get a CO2 stream that can be pumped underground. And so we still get the carbon removal benefit. Very circular. Why we're excited about it. Yeah, this whole process is.

• 1:01:53Logan Bartlett?

  There's one element of, at least one of the pushbacks I've heard from people is like, hey, well, there's other countries that are emitting a ton and aren't doing anything about it. Can you put that in relative terms for people with the implications of, hey, well, if China doesn't do this, or if Russia doesn't do this, then aren't we just kind of yelling into the clouds by ourselves? What is that?

• 1:02:16Speaker 02

  Yeah, I don't think it's very grounded in data. If you look at the pace of solar deployment and solar production, not only solar production, which of course they're exporting some of. But most of China's solar production is actually for domestic use. And I believe that they have deployed more solar now than anyone else in the world. And maybe even more than the rest of the world combined. Like, it is enormous amount of internal deployment of renewable energy and, and so on in India as well. So I, I'm not sure that that narrative actually fits the data.

• 1:02:46Logan Bartlett?

  Even zooming out like the state of play from a Gantt chart timeline standpoint, right? If we're looking out, like, where are we in a process and enablement to get to where we need to be? With the impact of all the stuff that's going on today?

• 1:03:08Speaker 02

  The carbon removal ecosystem is incredibly nascent. Or I should say the supply side at least is incredibly nascent.

• 1:03:16Speaker 02

  In the last two years, we've seen a total volume of deliveries of carbon removal of about maybe 6,000 or so tons. And that compares to 50 billion tons per year of emissions. And by 2050, we need, according to most of the IPCC analysis, we need about 10 billion tons a year of removal. So we need to go from 6,000 tons over the past two years to 10 billion tons per year by 2050. It's about 70% compound growth for the next 27 years. So the, that's what's required from a climate perspective. And so the growth of the industry that is going to have to happen is, is staggering. Like, it will be a challenge to, to build that many, that much completely new industrial infrastructure. Steelmaking is in an even crazier position, right?

• 1:04:01Speaker 02

  Like I was saying before, there's 100, 100 tons of fossil free steel has ever been made out of 3 billion tons a year. We need to get that to zero by 2040, 2050 as well.

• 1:04:10Logan Bartlett?

  And why, why are those dates picked, 2040, 2050? What is the?

• 1:04:14Speaker 02

  These are just scenarios modeled by, by the IPCC. I mean, you can, there's a lot of

• 1:04:20Logan Bartlett?

  Sure.

• 1:04:21Speaker 02

  Flexible points in, in how these scenarios are modeled, but these are sort of like the most reasonable models.

• 1:04:26Logan Bartlett?

  And so your process as it stands today, how far along the way at full capacity can that take us to?

• 1:04:35Speaker 02

  Yeah, so what I mentioned of those 6,000 tons that have been delivered, Charm delivered 5,500.

• 1:04:41Logan Bartlett?

  High market share.

• 1:04:43Speaker 02

  Yeah, so far we've delivered about 90%. And hopefully it will become a bit more of a moon race here in the next few years. I think there are big oil and gas companies that are building carbon capture facilities in the Permian in Texas. Climeworks is an awesome direct-to-air capture company in Iceland that's building their next 10x scale up. So I'm hopeful that there'll be a lot more activity here. But yeah, we're racing as fast as we can to scale up over the next decade or so. I think the total sort of cap for our North America operations is probably about a billion tons a year, just based on biomass availability.

• 1:05:21Speaker 02

  There's an enormous amount of injection, like rock capacity to accept injection, but the biomass availability, waste biomass availability is going to be our rate limiter. So probably roughly a billion tons in North America will be kind of our limit. And then we look at other operating theaters like India has a lot of biomass and agricultural residue and injection kind of capacity. Brazil, same thing. Potentially sort of Central Africa around Nigeria, both oil and gas producing and large amounts of biomass. So those are kind of like, maybe Australia, those are kind of like the major operating regions that we look at. And I think it probably caps out around like 5 to 10 billion tons.

• 1:06:02Logan Bartlett?

  Okay, so you can get close-ish. If you could wave your hands today, like I assume one of the things you'd want are more entrepreneurs going after, I guess, what are the limiters in the market today? And what are the big changes that you would see? Is it government? Is it entrepreneurs? Is it funding? Is it more corporate buy-in? What are the big kind of limiters that you would wave your magic wand and kind of change?

• 1:06:30Speaker 02

  We definitely need more mechanical engineering talent in going into climate and carbon removal specifically.

• 1:06:39Logan Bartlett?

  And why is that?

• 1:06:41Speaker 02

  These are really hard mechanical engineering problems, right? Of like, how do you design and deploy? What is effectively, if you take all of the industrial infrastructure that we've deployed over the last 100 years, we have to redeploy that in the next 25.

• 1:06:56Logan Bartlett?

  Yeah.

• 1:06:58Speaker 02

  A staggering amount of hardware engineering that has to happen to do that.

• 1:07:03Speaker 02

  And so there's going to have to be a wholesale transition of either generating new mechanical engineering and hardware talent, or transition from other places like oil and gas. But regardless, it's a staggering amount of infrastructure that has to be built.

• 1:07:17Speaker 02

  I think the other is certainly more government support and longer term contracts helps us draw then more investment in and make all these hires and so on. So it can kind of never go too fast on the demand side.

• 1:07:31Speaker 02

  And certainly, we need more corporate buyers entering the space. The Stripe is the first sort of RFP in the space has now morphed into what's called Frontier Climate, which is an advanced market commitment. They've raised about a billion dollars to purchase carbon removal. But that's a drop in the bucket. We're going to have to be buying something like 100 billion a year by 2050. So, you know, a billion over 10 years needs to grow by whatever those three orders of magnitude. So we need more.

• 1:07:59Logan Bartlett?

  Stripe leading the way on this, or Shopify, or Microsoft is, what is unique about those companies that they've been the ones to be out in front on this? Is it coming from, I assume it's not customer, I mean, they all sort of service same customers as other businesses that don't do this. Is it the employees? Is it just the leadership at the top? Is it some combination of the latter two?

• 1:08:22Speaker 02

  I think there's a key constraint, which is they all have relatively small footprints.

• 1:08:26Logan Bartlett?

  Yeah, I guess, mostly planes and electricity, right? It's probably easier.

• 1:08:29Speaker 02

  Like, if you're in a big industrial company, your footprint is too big to play with these kind of premiums. So they have relatively small footprints, like profitability or close to it. They have cash flow to sort of play with these things.

• 1:08:42Logan Bartlett?

  Good businesses.

• 1:08:43Speaker 02

  Yeah, great businesses. Financial services is probably another category that I think is gonna start making moves in carbon removal purchases in the near future, or has started already.

• 1:08:56Speaker 02

  The other thing I do think is leadership at the top that recognize that this is gonna have to happen, and they can play a catalytic role in helping get it off the ground with like a relatively small amount of money in the scheme of things. And I think cultures that have a rigor of, an analytical rigor, to identify that actually most of these carbon offsets are not doing anything. Two, that we really need these super high quality

• 1:09:28Speaker 02

  carbon removal processes like bio oil sequestration, or direct or capture, or enhanced weathering, or ocean alkalinity enhancement. And yeah, I think that kind of, and I guess the foresight to see the trends that are happening and say, wow, by 2030, we might be required to be net zero, right? I mean, that's hard to imagine now, but like six years ago, it would have been impossible to imagine that people would even be spending this amount of money on carbon removal. So like, flow forward another seven years. If we're all required to buy carbon removal to be like, at least on the march towards net zero, there literally won't be enough capacity. So if you're a really smart buyer, you start getting close to the suppliers to be first in line to buy that capacity.

• 1:10:11Speaker 02

  And I think there's a lot of sort of strategic early mover relationship building and supply chain building that's happening as well.

• 1:10:19Logan Bartlett?

  So is that, is that the big case? I guess if you were making the case right now, the sales pitch to whatever, Adyen, that competes against Stripe, or I don't know, Big Commerce that competes against Shopify, or whoever it is.

• 1:10:35Logan Bartlett?

  What are the cases that you make to them to do it now, rather than like, because the economy's worse than it was six months ago, or a year ago, right? And so people are being asked more about their bottom line and spending more on, you know, a cost cutting. And riffs and all of that stuff. And so as you make these sales pitches to to companies like is that is that one of the big ones is hey, this might be an inevitability. And so get in line now. Is it hey, you have a bigger purpose than just pure financial profit now? Like, what are some of the the things that you tell, you know, sitting across the table from a leadership of another company?

• 1:11:15Speaker 02

  I I mean, we certainly walk through our capacity. I mean, again, charm is like we started deliveries two years ago, two years, three days ago, and no one else has started deliveries yet.

• 1:11:27Logan Bartlett?

  Yeah.

• 1:11:28Speaker 02

  Or at least claimed any deliveries yet. So it's a severely capacity constrained market. Like if you if you even if you wanted to buy at whatever premium, 50,000 tons this year, it doesn't exist. So like charm is sold out through 2025 or so. And with new contracts were supplying that will continue to get pushed out. So if you're a company that's thinking like, oh, you know, I'd like to start like making a net zero commitment and start to do something like you're already multiple years behind, right?

• 1:11:59Speaker 02

  And, you know, other companies that are maybe starting to build a prototype, like I pretty much guarantee they're not going to have capacity before then either. So as that timeline starts pushing out, yeah, that's a that's certainly if you intend to buy this in the future, then like it's not. It is so supply constrained that I think smart buyers are jumping on it on it faster. There's also a key thing on price here, which is.

• 1:12:23Logan Bartlett?

  I was about to ask about pricing because I mean, if supply, demand, like you could probably, I know you won't do this, but you could probably charge exorbitant amount for this for the people that want to cut the line, right?

• 1:12:34Speaker 02

  Yeah, we probably won't do that. But the the what we do with our prices, we have what's called the most favored nation clause. So we everyone pays the same price currently at $600 a ton. And if when we lower our price in the future, everyone will get dragged to that new price. But the people who committed earliest at the highest price point will get an additional kicker proportion delivery below that. So it's actually you get the best price by committing now, which is very helpful to us because then the committed contract allows us to go to cheaper fundraising and not only of equity, but also of debt and so on to actually finance building these machines.

• 1:13:13Logan Bartlett?

  ESG as a term has become politicized or loaded. What's your view on that as a, I guess, as a term? Does it need, is it the right branding? Does it need rebranding because of? It seems to also mean a bunch of things and also mean nothing. Back to your point about like the nature-based offsets and some of those things. What's your perspective on that?

• 1:13:38Speaker 02

  I mean, first it's an acronym, I forget, for environmental, social and governance?

• 1:13:42Logan Bartlett?

  Governance, I think.

• 1:13:44Speaker 02

  And everyone kind of keys on the first word, which is environmental. And they're like, oh, well, this is about companies that are doing environmentally good. But I think actually that when you look at the detail of the criteria, the criteria are much more evenly distributed across those three things. And the bar in environmental is not actually that high. And so what that means is that oil and gas companies lean very heavily into doing a lot by those criteria on the S and G side, in particular on the governance side, I think, and just like end up scoring very highly. And you look at this thing that you're sort of keyed on environmental, and then you look at the score of an oil and gas company and you're like, this can't be right. And it's not right as compared to what people have in their head as to what it's measuring, right?

• 1:14:23Speaker 02

  So I think relative to expectations, the ESG criteria are pretty off-base. You know, in managing our own capital, like personally, like we don't use the indexes. We have gone to greater lengths to like figure out how to invest in the companies that we think are actually having a positive impact on the environment. But yeah, there's a huge disconnect between what people think those criteria mean and how they're actually measured.

• 1:14:48Logan Bartlett?

  Now, what, sort of taking a step back between your two experiences to date, like what have you learned, commonalities and interesting differences? And I mean, I'm sure there's an infinite number of them, but as you sort of compare segment to charm and hardware to software and B2B versus, I mean, I guess you're still B2B, but B2B offsets as the case may be. Are there any particularly interesting kind of things that stand out in your current experience versus your former one?

• 1:15:25Speaker 02

  There's a lot that's the same. You know, if you go through like finance, HR, recruiting, sales, marketing, like a lot of it is the same. Yeah. The most fun difference for me is that when we get to share pictures of what we do, it's like really cool stuff happening in the field, you know? It's like gritty, there's like actual people doing, you know, like real things out in, out in these physical operations. Maybe a more interesting kind of like strategic shift for me has been like software development versus hardware development. Two things are obviously different, but some of the ways in which you can accelerate, each of them are like not as you would expect. So in software, for example, if you want to go faster, you like ship more frequently, right?

• 1:16:07Speaker 02

  You're just like, okay, we're going to get down to like all the continuous integration, continuous deployment. Like we'll ship hundreds of times per day. Great, works super well. We'll add all these unit tests and everything. This just like fundamentally does not work in hardware because you have shipping times. You order a component, it takes like at least overnight for it to get there. And then it takes you like a little bit of time to do some kind of basic quality control, integration. Like you just like physically cannot move around this, this material as fast as you can with code. And so what happens is, and for more specialized parts, you end up with lead times of months or weeks. And so you just literally can't ship incrementally like that.

• 1:16:48Speaker 02

  And so what it leads to is, well, you would still like to pack more learning into the same period. So how do you do it? Well, one way is to parallelize. So we end up with at different times, a lot of parallelization in different places. Where for example, we are parallel tracking, purchasing waste bio oil that we inject. So we can learn about the subsurface. We're parallel tracking that to buying off the shelf pyrolyzers that make bio oil. So that we can practice 24/7 operations, practice biomass supply chain, practice hiring operators, maintenance, training, insurance, all kinds of stuff. And we're parallel tracking designing and building our own pyrolyzers to come down the cost curve. And so by parallel tracking these three things, we don't have to wait for like our own machine to be

• 1:17:32Speaker 02

  sufficiently good enough to generate the bio oil, to learn about the 24/7 operations, to have enough bio oil to test out the injection for the first time. And so we end up with a lot of parallelism in different places that, you know, we try to pinch off and narrow the choices eventually, but that sort of parallelism, I think, is a new motion and sort of, I guess, unique as to how to accelerate hardware.

• 1:17:55Logan Bartlett?

  Yeah, it's fascinating, the process relate, I mean, we're sort of coming back to the old original manufacturing, lean manufacturing and all that stuff back in the day, but yeah, we've, we've gone so far down the software rabbit hole of optimizing those things that we take a step back in the venture landscape. Have you found, has there been an uptick that you've seen of people interested in hardware since you've kind of gone into this? And have you had more outreach for entrepreneurs trying to learn how to go about it, investors that are interested in investing in this space? Has that changed notably since you, since you started down this path?

• 1:18:32Speaker 02

  For sure. I think in 2018, the watershed moment was the IPCC report that showed that we were going to overshoot and needed, you know, 10 billion tons of removal by 2050. So that was a watershed moment, I think, for a bunch of people of getting into the space. I think that's when Stripe kind of started doing their thing. That's when Charm started, et cetera. I think also, obviously, the collapse of software technology valuations in the last couple of years or year or so has obviously made people pick up their heads and kind of look around. So I think that those two things of, software has become a little less appealing and climate has become a lot more urgent and sort of raised its, raised its profile.

• 1:19:15Speaker 02

  And I think the balance of those two things has caused a lot of interest in, in getting into climate. I think people feel a lot more purpose.

• 1:19:22Logan Bartlett?

  Are you optimistic about the next five years in this space and then where we're going to go over the next till 2050? Are you pessimistic because there's not the sense of urgency there needs to be? What's, what's sort of your overall sentiment?

• 1:19:38Speaker 02

  I'm quite optimistic. I think if we, if we look back over the last five years, there's been a massive shift and hugely like optimistic trend line. And if we carry that forward over that period of time, I think, I think there's a lot to be optimistic about in, in terms of solving some of the key challenges that we've outlined now of industrial decarbonization and carbon removal. I think there will be the next set of challenges. You know, my, my son is five now and I think around 20, 2040, 2050, he'll be the same age that I am now. And I guess 2050, he'll be the same age as me. And he'll have his own set of challenges. My, my wife is working on, on the methane part of this problem, which is going to be its own whole issue to deal with.

• 1:20:23Speaker 02

  So there's, there's a, you know, there's all kinds of issues with, with PFAS and like all kinds of other environmental issues. So I guess I'm optimistic that we will solve the challenges that we have dialed in on now of carbon removal, industrial decarbonization, you know, renewable grid, electric transport. Like, I think we'll solve those parts. There'll be new issues and it'll be for them to figure out.

• 1:20:44Logan Bartlett?

  Yeah, well, good. Well, Peter, thanks for, thanks for doing this. This was great.

• 1:20:52Logan Bartlett?

  So that'll do it for the 48th episode of Cartoon Avatars and the first episode of the Logan Bartlett Show. Thank you, everyone, for listening in. Thank you to Peter Reinhardt for joining. Thanks to Rashad and Justin. Hope everyone has a good weekend and look forward to seeing everyone back here next week for another, another episode that I'll trust you'll enjoy. Have a good weekend, everyone.