The Entrepreneurs for Impact Podcast: Transcripts
#119
Carbon-Negative Materials and $100M+ of Prior Startup Exits – Bryan Hassin, CEO of DexMat
PODCAST INTRODUCTION
Chris Wedding:
My guest today is Bryan Hassin, CEO of DexMat, a next generation climate tech materials company that transforms carbon from an expensive environmental problem into high-value, high-performance nanomaterials targeting two to three gigatons of GHGs reduced through its solutions. In addition, Bryan is also the former Co-founder and CEO of Third Derivative, the world's largest climate tech accelerator, which is catalyzed over $500 million of investment in over 100 gigaton potential climate tech startups. He's also the former Entrepreneur In Residence at RMI, a serial entrepreneur with over $350 million of exits to date, and the Independent Director at Pyrophyte Acquisition Corp., a climate-focused SPAC with a 210-million-dollar market cap.
02:34
In this episode, we talked about why this company stood out from the 2,000 plus he reviewed while at Third Derivative. The role of $20 million of non-dilutive capital into this venture. The importance of big ass goals. Not being the smartest person in the room because if you are, as they say, then you're in the wrong room. Playing to win versus playing not to lose, they're different. Hypothesis testing and its role in his startup journeys. Why drop-in replacement are magical words. The distinction between the first and the best markets to go after, not the same.
How his sabbaticals played a role throughout his career. His favorite non-business, non-climate books and why they matter to climate tech, including one anti-recommendation, the first on the pod. Thanks, Bryan. Why we need to ask, what would need to be true in order for X, Y, Z to be possible? In a sense, how do we have a beginner's mind, not experts mind, the latter being very good at saying why things will not work. Speaking from personal, hopefully past experience. Anyway, lots more. Hope you enjoy it and please give Bryan and DexMat a shout-out on LinkedIn, Slack, or Twitter by sharing this podcast with your people. Thanks.
PODCAST INTERVIEW
Chris Wedding:
Bryan Hassin, CEO of DexMat, welcome to the show.
Bryan Hassin:
Thanks Chris, great to be here. Long time listener, glad to be on the other side of the mic.
Chris Wedding:
Yeah, hear, hear. What is also nice about having you on the podcast is that it's part of our relationship in that, here you were in the RTP area of North Carolina for all these years where I am, then you had to freaking move for me to be like, “Oh, I should meet Bryan. Oh, wait, he was here, what?” Anyway, many circles, you're on the show, now a friend. Anyway, glad you're here.
04:41
Bryan Hassin:
So, I fully agree that the universe works in weird ways, but very glad to be connected and very glad for our friendship and collaboration over these last couple of years.
Chris Wedding:
Sweet, okay. Let's go right to a fun stat that we talked about before pressing record. In your work at Third Derivative, gigantic climate tech accelerator program, 2,000 plus deals you all looked at. And this one caught your eye as having the potential to remove two to three gigatons of GHGs just by the company, not the sector. So, those are two big ass numbers I think with the technical term there, Bryan. So, dot, dot, dot, where do you want to take that conversation, Bryan?
Bryan Hassin:
Well, I mean, we can start maybe from a position of necessity. I mean, if we're going to build the sustainable, prosperous, and equitable future, we need to be dealing in big-ass numbers. We need to be aspiring for big-ass numbers. We need to be taking big-ass swings, big-ass shots on goal. And so, I spent a lot of my career trying to find those shots on goal, trying to take them and hopefully in this case, really hit it out of the park.
Chris Wedding:
Now, I think some listeners could be thinking, “Look, man, those sound like numbers too big to be true.” We would both readily say, yeah, maybe, but let's swing for it from a techno economic kind of analysis perspective possible to get there. And also, you're not like, what age do I pick here to not be super offensive? You're not a 21-year-old newbie, right? I mean, I love 21-year-old newbies and if you're listening, God bless you all.
My point is, you've been around the block. You've started a few things. They've turned out well. So, tell us about maybe your path a little bit such that the listeners are more confident in that big potential you referenced.
Bryan Hassin:
Sure. So, Chris, I've really spent my career as a climate tech entrepreneur, so building, leading and scaling disruptive tech ventures, trying to build a sustainable, prosperous and equitable future. Originally in my career, these were more software focused ventures. My background was in computer science, electrical engineering, but over the course of my career, evolving into more and more hard tech, deep tech.
Mostly US ventures, but a couple of ventures in Western Europe, East Asia and East Africa. Mostly startups, but a couple of corporate spin outs as well. Over the course of that career I had some failures and learning experiences along the way, but had some pretty good successes too, created about half a billion dollars US worth of exit value.
Then I've also taken a few sabbaticals over the course of my career. So, I took a year off to study global leadership because I thought the energy transition was a global challenge, and I really wanted to beef up my own skills there. I took two years off actually to teach entrepreneurship at my undergraduate Alma Mater, Rice University, which was an incredibly rewarding experience to pay forward all the mentorship that I've been blessed to have in my career.
Then most recently, I've spent two years as the Co-founder and CEO of Third Derivative, which rapidly became the world's largest climate tech innovation ecosystem. There, we mobilized more than half a billion dollars in a more than a hundred hard climate tech ventures in just the two years that I was there. So, very proud of the impact that we have there and hopefully are continuing to have and will continue to scale up. But you could probably tell I'm bright-eyed and bushy-tailed and always seeing the possibilities, but I have the greatest success in my career when I'm partnered up with people much smarter than I am, who can pressure test my ambitions, rein me in or redirect me, et cetera.
08:30
I certainly was doing that at Third Derivative where I was surrounded by the folks at RMI, hardcore climate policy wonks and techno economic analysts, et cetera, keep us focused, but also in this case. So, DexMat is the name of the company. It's short for Deus Ex Materia. The solution comes from the materials and the people I'm working with have forgotten more than I will learn in my lifetime about advanced nanomaterials and chemistry and physics, et cetera, are one of our patents actually as a Nobel Prize winner on it, et cetera.
So, these people know their stuff and we've been around it every which way and we've got a pathway to two to three gigatons. Now, there's a lot of risk that we want to achieve it, but it's definitely possible and shame on us if we're not taking that, as you said, big ass swing.
Chris Wedding:
Love it. Let's go back to the prior ventures. You mentioned some successes, a measly half a billion dollars of exit value, but also lessons learned along the way. So, maybe tell us a couple of lessons, things that hindsight 2020, you might've tried something different.
Bryan Hassin:
Yeah. I mean, we’ve definitely got enough material for many podcast episodes. Maybe I can just focus on one. We learn a lot more from the failures than we do from the successes for sure. I had a venture in the mid to late 20-teens. Actually, as well I was living in Chapel Hill, just round the corner from you, really cool venture. Behind the meter demand management for non-residential buildings.
So, we could install some IoT devices. We can measure power everywhere. We can control it dynamically. One of the cool features was we could turn plug loads. So, things plugged into the walls into essentially dispatchable batteries. Actually, I'm really proud, at one point we helped keep the Texas grid online during a summer heat wave. Obviously, that's a very sensitive subject as the Texas grid completely failed a couple of winters ago and people died. I mean, this is life or death stuff, not just saving a few cents here. At scale, we could have built the largest virtual power plant in the world, so 55 gigawatts of dispatchable load, but we didn't hit that scale.
We proceeded a little more conservatively. We only raised a little bit of money. We operated more like a bootstrap small business than a really ambitious big ass swing as it were. We had a mod of success. We had a soft-landing acquisition, but we weren't shedding blood and sweat and tears and time. The one thing an entrepreneur can ever raise more of for a mod of success, we're trying to go for the big win. And so, one of the big lessons that I take from that is that, if your ambitions are big, you've got to play to win, not play not to lose. If you understand the distinction.
Chris Wedding:
Yep.
11:24
Bryan Hassin:
So, being a little too cautious, a little too trepidatious, we actually eliminated some of the options and possibilities for us. But the corollary I think is you've got to surround yourself with people who are also playing to win. Frankly, I was completely misaligned with one of my co-founders and our CFO, who was just much more risk averse than I was. It caused lots of tension, it caused lots of slowdown, it caused us not to pursue some things that could have been helpful for our growth. But by the way, that tension was there for years while I ran the company and it was obvious from pretty much the very beginning.
So, a third lesson is that, when there's an issue, you've really got to pick your head up and confront the problem. I played American football up to the university level and I have a tendency to put my head down and say, “Oh, I can just power through this and we'll get to the other side.” Sometimes you're really better served by going back to the huddle and calling a different play, and should have done in this case. But the output though, was also recognized through this experience that there were significant structural barriers and challenges to commercializing, deploying and scaling up really hard climate tech. That's what led me to co-found and lead Third Derivative as well.
Chris Wedding:
Yeah. One thing I either hear or want to hear in that is, if you have bigger goals, it actually may be easier to achieve them. As in like, maybe you're more motivated than you would be with a less ambitious score, or maybe you're able to attract more slash better talent because your target is higher. For those listening, Bryan is shaking his head vigorously.
Bryan Hassin:
Yeah, I think there's essentially two equilibrium points. There's go big or go home, risk failure, put it all on the line and then there's protect your downside, but limit your upside. We found ourselves in an in-between state where I was really wanting to go big, but we were operating in a way that wasn't really compatible with it. And a lot of that was due to misalignment on our senior management team.
Chris Wedding:
Okay, so we've teased listeners for a while now. Let's get into the details. What is DexMat?
Bryan Hassin:
DexMat is a climate tech moonshot. We're building the sustainable materials economy of the future, displacing massive industries worth trillions of dollars responsible for gigatons of CO2 emissions. So, industries like steel, aluminum and copper. We're displacing them with advanced carbon negative materials.
So, I have to be very clear. You had my neighbor here in Boulder, Colorado, my neighbor, Sandeep, on recently with Electra and they're making steel green. I love that they're doing it and I love everyone else who's making these metals, these dirty materials green, but we're not making them green. We're making them obsolete. We're building an entirely new future on industrial revolution scale innovation. We're pretty excited about it.
Chris Wedding:
Okay, so let's just pick one of those, aluminum, let's say. How does you-all's advanced materials focus make aluminum obsolete?
14:31
Bryan Hassin:
Maybe, let me just back up a little bit. So, what we actually do is we take carbon nanotubes today produced with hydrocarbons. We split off the hydrogen, that's great, the hydrogen can go off and displace emissive fuels with clean burning hydrogen. Then we use the carbon as carbon nanotubes, we spin them, we process them using a wet fiber spinning process, which is similar to Kevlar, for example, into a macroscopic material, a fiber that has a significant fraction of the molecular properties of carbon nanotubes. So, stronger than, lighter than, more flexible than, more corrosion resistant than, more conductive than, all of these dirty incumbent materials, including and especially aluminum, and it's in a fiber format.
So, it may not be obvious to you. If you're like me and you're not a PhD Nobel Prize winner in material science, like some of the people in our company, it's not obvious how something that looks like a spool of thread can displace something like aluminum or steel. But actually, a massive amount, literally massive amount of the world's materials start in this fiber format, so about a third of global aluminum production is in this wire format. Almost all of copper production is in a wire format. Even hundreds of megatons of steel. If you've ever been on the Golden Gate Bridge, you’ve seen these huge bundles of steel wire and cable that are holding it up.
So, whenever there's a materials revolution, there are innovations in construction techniques. For example, we used to build bridges when we were using stone with arches underneath, and then we were able to start using new construction techniques like suspension bridges once we invented steel. So, that'll be the case here as well, but it's important to recognize that even without innovations and new form factors, innovations in construction techniques, there are hundreds of megatons and hundreds of billions of dollars of today's market of steel, aluminum, and copper that can be displaced just with a drop-in replacement of this amazing material that's better in just about every way, except it's much more expensive. And we're working on that.
Chris Wedding:
For now.
Bryan Hassin:
For now.
Chris Wedding:
Let's go to business model and then let's go back to the origin story if you will. There is this production of carbon nanotube, a fiber or thread, let's say as an input. Is you-all’s model to actually rev up and produce this? Is it to be IP player that licenses it out to a network of manufacturers? What does it look like?
Bryan Hassin:
So, our working hypothesis today is really to scale up production that we will continue to own and scale up, and one of the major reasons for that is then we can really push it. Like we can really push the scale up, we can really push the cost down. As I mentioned, our competition is really these dirty incumbent materials. So, the commoditized materials like steel, aluminum, copper, but even specialty materials like carbon fiber and Kevlar. Again, we're just better at all these different materials properties, except cost. So, we're about three orders of magnitude more expensive than those and we're producing in incredibly small quantities.
17:42
Those materials are also entrenched in existing supply chains, so it's helpful that we're a drop-in replacement. So, we can drop into supply chains without having to revamp the entire supply chain, without requiring new machinery, et cetera, that's helpful, but the cost is still going to be issued for a while so that's why we're making a choice.
We could build a great business being a niche provider of ultra-premium materials for very high-end applications, very expensive materials. We can make a lot of money for ourselves and our investors, but we're not going to have gigatons of impact that way. So, we're proactively scaling up, proactively reducing the cost so that we can reduce the price. And even though it hurts our margins, it massively expands the set of materials that we'll be able to displace. The applications where it can displace and ultimately the gigatons of impact that we can have.
Chris Wedding:
Part of what you bring up is the question of, what game are we playing or what mountain are we climbing? Obviously, this relates to your business strategy, but it can also relate to our career choices as well. You're picking a different game to play, right?
Bryan Hassin:
Yeah. Just because I have an MBA, I have to think in two-by-two matrices. We're moving from one quadrant of a two-by-two matrix of incredibly low volume, incredibly high value into essentially the opposite quadrant, and that's a hard move to make. It's going to require probably billions of dollars of investment over time. Again, our motivation in maintaining ownership of the manufacturing process rather than licensing it out is then we can drive that investment. We can drive up that scale curve and down that cost curve with speed and purpose, rather than relying on others who might not be quite as motivated as we are.
Chris Wedding:
True. Just to stress two other things you said, one was our working hypothesis. I think oftentimes founders, CEOs are expected to have just super high conviction clarity. Those are different, of course and so look, when you're at a company at your stage, you figure it out. Lots of hypotheses to go test and I think someone said before, don't be emotional with data, it's objective. It's just telling you something and you get it and you change course, your hypothesis was right or wrong.
Bryan Hassin:
But of course, if someone's or data are telling you something, you've got to be listening in order to hear it. Yeah, what's the expression, strong convictions, loosely held? I think that applies really well to early-stage startup. I look at early-stage ventures as learning machines. Their primary job is learning, rapid iterations, testing hypotheses cheaply and quickly as they can, but they've got to be moving. They can't be sitting around just reading books all the time. The learning comes from moving quickly and real collisions in the marketplace. And so, that's going to be a shift for DexMat.
DexMat's actually been around for a few years. It's raised a lot of non-dilutive funding, but it's really been, I would say, more academic and then by me stepping into the CEO chair, it's a pivot. It's a commitment here that we're committing to a much more ambitious narrative, a much more ambitious pathway from small scale premium materials to aspirational transformational climate tech. A lot of learning on the way.
21:20
Chris Wedding:
Yeah, I think it's well said. Another thing you mentioned was that your product will be a drop-in replacement, which again, for those listening that are working in the material space, a drop-in replacement, I'm not sure how many words that is, maybe it's three words. Anyway, three magic words versus recreating what dozens of companies in a supply chain do or are asking dozens of companies in a supply chain to do something different, which is hard, impossible, one of those two. So that's a good lesson, I think, for listeners as well. Yeah?
Bryan Hassin:
I mean, you can probably do it, but yeah, it’s going to be hard for sure. Also, putting my investor hat, because I had to put my investor hat on to decide to invest my time and myself into this venture. As an investor, you always look for macroscopic trends that also support what's happening and can I answer the question, why is this in the right place at the right time?
I think fortunately I've been in plenty of ventures that were in the right place at the wrong time, usually before their time. Then you see 10 years later, someone come and do the exact same thing and they really succeed, and there've been a few trends here. One is the materials that we're producing and even the input feedstocks, the carbon nanotubes have been undergoing decades now of rapid cost downs, so actually at a steeper curve than solar. And so, suddenly they're at an inflection point where you can build these macroscopic materials that actually are tenable by customers. They're not just completely outlandish, unobtainable or anything like that.
The other is that the properties have been improving. So, we've been following what we call Pascal's Law, so that we've been doubling the strength and conductivity every three years almost like clockwork. And so, finally, the macroscopic materials are good enough that one kilogram of our material can displace 10 kilograms of steel. And so, that closes some of the cost difference, for example.
Organizations and people are suddenly more interested in the carbon content of their materials than they were even just a few years ago. But one of the key things is really the fact that we've invented a manufacturing process and a material that drops into these existing supply chains. For example, depending on construction, we can make these materials either incredibly stiff or incredibly flexible. And so, if they're incredibly flexible here, but your listeners can't see it, but I can show you it's like a spool of thread and it can literally drop into industrial textile machinery.
You're in North Carolina, there's a strong heritage of textile production there as well. And so, without having to reinvent the wheel, without having to invent new machines, our material can be sewn into shirts for wearables. It can be woven into meshes to be used as a substrate or a matrix for composites for the fuselage of an airplane, for example. You're absolutely right. That makes a huge difference.
If you're trying to disrupt, if you're trying to transform an industry, there's enough work to do without having to transform up and down the entire supply chain. When you can drop in, it definitely reduces some of the friction in that process.
Chris Wedding:
Yeah. Stepping, I guess, up in elevation for a second, what you just described, I want to piggyback that with the conversation I had earlier today with the CEO of a company called Keel Labs, K-E-E-L. They're creating fiber for textiles, for clothing, out of kelp and just relocated from Brooklyn down to Durham as everyone should do, wink, wink.
24:54
Sometimes, well, actually, most days my wife, we will ask each other, “How was your day?” Often my response is like, “Amazing.” And maybe if the kids aren't around like blank, blank, amazing. It’s conversations like these, the new possibilities that sometimes sound like science fiction.
Hey, back to the ground level now, you mentioned earlier billions of dollars of investment required and I think for some listeners, they may be thinking, “Well, gosh, you're going to have to give your company away to raise billions of dollars through the corporate entity,” which is probably not the way you would do it. How do you think about dilution and different entities and corporate versus project finance and so forth, to bring in the kind of capital that you're imagining?
Bryan Hassin:
Yeah, so we definitely think about it in terms of a capital stack with many different flavors of capital along the way. We think it will require billions of dollars, but it's not like it's billions of dollars of all seed stage, equity capital or anything to that effect. So, I said, we just closed our first equity round of funding. We just closed a seed round of funding, just a few million dollars led by a major corporate investor, but also, we have some financial VCs in there as well.
They have the capacity to follow on in additional rounds of equity funding if we do that, but before that, DexMat's really built on the backs of more than $20 million of non-dilutive funding. So, it was about $15 million invested into called the basic science before it’s spun out from Rice University. Then DexMat has attracted about $5 million in non-dilutive funding with a pathway to much more since spinning out.
As we scale up, as we prove out first of kind to plants and then second of kind plants, et cetera, we ought to be able to attract more debt financing and project financing for those plants. There's increasingly capital available. Jigar Shah is doing amazing work, I think in the LPO, bearing a little bit more risk than maybe just the financial markets would on their own, instead of providing a little bit of certainty to motivate additional financiers to step in.
So again, call it a working hypothesis and I'm sure we'll learn a lot along the way and we'll pivot and we'll zig and we'll zag, but our expectation is that we will probably raise a couple or a few more equity rounds of funding, but they'll be heavily leveraged by additional flavors of capital that don't require us to give up the company.
That said, I also have to be clear that our priority isn't to obsessively and greedily clause much of the equity for ourselves as we can. Our priority is to build and scale this transformational venture to the gigaton scale impact that we believe it can have as quickly as possible. We may face some trade-off decisions at some point in that journey, in which we say, “Look, we could keep a little more for ourselves, but move a little bit more slowly, or we can attract more capital right now, we can spread the wealth around a little bit and actually move a little bit faster.”
We don't make that decision until we have to make it, but my bias is certainly that we would make that in favor of moving quickly. That's a key value of the company and certainly, you know probably better than I do, better than most, that if we can reduce the pathway to gigatons of impact by years, I mean, that has a measurable impact on our ability to maintain a 1.5 degree aligned future, measurable impact on the impacts and effects of climate change to all communities, but especially most marginalized communities, most vulnerable. So, I would say not only do we have a bias toward it, I might even say we have a responsibility to make that decision to optimize for speed and purpose.
28:39
Chris Wedding:
Well, I'll make sure this podcast only goes to entrepreneurs, not to investors who are like, “Sweet, let's take all their freaking equity.” That’s well said.
Bryan Hassin:
Look, if we're going to disrupt and completely displace trillion-dollar industries, investors are going to make a lot of money, no matter what flavor of their capital there is. No matter whether they get a little bit or a lot or at this stage or that stage, there's going to be plenty to go around. This is a very abundant future that we're working toward.
Chris Wedding:
Well, as is said, a small percentage of a large number is also a large number.
Bryan Hassin:
A large number. Yeah.
Chris Wedding:
You mentioned earlier, Jigar Shah formerly at Generate, now LPO, so the Loan Program Office at DOE for listeners, changing, underwriting criteria to put more money to work a little earlier as you noted. The non-dilutive funding, 20 main bucks, what were some of the sources? Like SBIR or NSF or what?
Bryan Hassin:
Yeah, so DexMat actually began its life as a spin out from a US Department of Defense grant. And so, actually a lot of DexMat’s early funding has come from different defense agencies in the United States. We've a lot of funding from the air force and from others. You might imagine that having material that is stronger and lighter and more flexible, more resilient, more fault tolerant, more corrosion resistant is really helpful in the aerospace sector, but we're rapidly growing beyond that. We’re not a defense company by any stretch of the imagination, but we’ll forever be grateful for the risk and support that they took and provided for us in our very early stages.
More recently, we've been getting a lot of funding from the Department of Energy, from ARPA-E, and actually, I say with this pivot from being, call it a materials company to being a climate tech company, we'll continue to try to develop sources of non-dilutive funding and support, but to expand our aperture a bit from materials and defense to climate supportive sources writ large.
Chris Wedding:
It also makes me wonder, how many other spinoffs from maybe DOD Tech have other use cases in an entirely different sector, if you will? I mean, obviously climate tech versus the original intended purposes. Anyway, exciting, I think. I'm going to ask you a question back on the many potential industries which you seek to disrupt all very, very large industries. How do you decide which to target as your beachhead?
Bryan Hassin:
I mean, it's a good question. I'm the type of person who never says that's a good question, because I hate qualifying someone's questioning ability, but it's a good question that we're wrestling with right now. It's part of our use of proceeds from this round is really by the end of this round to have a really cogent hypothesis of G to M, go to market prioritization, sequencing, et cetera.
31:41
Right now, we think of everything in terms of three phases. Today, we're in this very niche phase where we're providing material for very niche applications with ability to tolerate an incredibly high and ultra-premium price point. As we scale up and cost down, though we really ought to enter competitiveness in much more commoditized, electrically conductive applications.
For example, let's take aviation as an example. So, right now, we're being used for electro-thermal de-icing. They essentially sew our material into the wing of a plane, run a current through it, it creates heat and then instead of having to use all these really toxic chemicals, it de-ices the plane and actually does it much faster and less expensive. But we're not going to have gigatons of impact just with a little de-icing application.
So, as we grow and as we scale up and cost down, we should be able to displace actually all of the electric cabling throughout the plane and that's literally tons of cabling.
And so, then not only are we displacing dirty materials with our carbon negative materials, but we're actually lightweighting the plane as well. So, it can go farther on less fuel, could be an unlocking mechanism for electric aviation, which is really struggling with power to weight ratios, et cetera. But then as we really scale up and really get down to cost parity with the equivalent amount of these existing materials, then we really get into structural applications. So, then you can make the fuselage of the plane out of our material.
Today, planes are mostly made out of carbon fiber and Kevlar. So, similar fibrous materials, but ours is conductive. You can actually eliminate the entire layer of copper they have to put underneath that carbon fiber and Kevlar to protect it from lightning strikes and just use our material more. It saves tens of tons in that case as well. So, it ends up being stronger, lighter, more corrosion resistant, et cetera, but then it also has this massive light weighting as well.
Now, is aviation going to be the right beachhead market for us? I mean, that's a long product development cycle, probably not, but we have a similar three-phase approach in automotive as well than in other areas. Power transmission lines is an area that we're increasing adoption in as well and it's going to be incredibly necessary as we hashtag electrify everything.
And so, replacing some of the steel cores and then the aluminum conductors with our material, which is stronger and better conductor than both of those in ways that not only makes the status quo better, but also that allows you to build power lines with much higher tension and towers much farther apart, which dramatically decreases the cost and reduces the likelihood of a sagging line leading to a wildfire, et cetera. So, they're kind of first and second order, even third order effects there as well.
But I have to be clear, it's almost at the realm of speculation when we think about the path of marketing. So, a lot of our use of proceeds is really building out the commercial team for the first time. The team so far has really been scientists and engineers. And so, we're doing market analysis, segmentation, a lot of customer development, market development to really kick the tires and test out, which are the markets that are really ready for this today? Which are the markets that are going to be ready tomorrow, but we need to start laying the foundation for? Which are the markets that they'll be around once we really don't need them anymore?
34:54
Chris Wedding:
I mean, look, it was a totally unfair question. How do you answer that in like four minutes? You don't. I think just to highlight, it's super difficult to pick and you can't pick all. And the other maybe is the first opportunity, the first yes you get is often not the best or the best mountain to climb, let's say.
Let's switch as we do from the company to Bryan. Let's start with, tell us one or two things you strongly believe and those can be business or not business. Actually, not business is a little more entertaining and they often translate to business I think too.
Bryan Hassin:
Yeah, and there's a lot of overlap actually. Certainly, for anyone who's designed their life the way I have, which is to be spending my business, spending my life working on things that I believe in deeply, that I'm motivated, I'm passionate about, this is a topic that becomes more salient to me every day and every news article that I read or tweet that I read, et cetera. If we fail to build the sustainable, prosperous, equitable future, and obviously I'm an incredible optimist and I believe we'll succeed, but if we fail, I think it will be due to a failure of imagination and courage, I would say.
So, I grew up in the space industry, I grew up around amazing inventions that taught me that anything is possible. It's not a coincidence that I chose to attend Rice University where I had the opportunity to play football on the very field, in the very stadium where GFK gave his famous moon speech. We choose to go to the moon, not because it's easy, but because it's hard and that to me is really important, but if you have language, it’s very important. So, you've got to have the imagination to imagine something that seems impossible, but then you've got to make the choice to actually go out and do it.
And in this field of climate, in climate tech, in climate policy, there are so many really smart people. In some cases, I think maybe a little too smart for their own good. They're so eager to tell you, based on their depth of knowledge, why something won't work. What we really need for a problem of this magnitude and urgency is people thinking about how something could work.
At third Derivative, we were born and incubated through RMI. And so, RMI is full of really smart people and they would publish a report saying, this can work and this can't work. And we, at Third Derivative would be with our boots on the ground, looking at entrepreneurs and ventures, “Well, actually, it looks like this can work.” Then it was good partnership because then we could have a bi-directional flow of information.
I mean, to bring it to business, I mean, that's what we're doing at DexMat. We're not asking, how can we make steel a little bit greener, we're going back to first principles and imagining a future unconstrained by these dirty centuries’ old materials. And we're making the choice to do this massive scale up and cost down.
And so, it doesn't have to be climate. It doesn't have to be business, but the best of humanity comes at the intersection of imagination and courage. That’s a deep held belief of mine, something I try to impart to the people around me, whether my family or my teams and certainly something that I've tried to live by with varying degrees of success.
38:23
Chris Wedding:
I'm imagining those responses from folks that are very smart, they're experts, but they're finding ways to say, “No.” It's like, “Well, it won't work because of,” versus a reframing is “Well, what if.”
Bryan Hassin:
What would need to be true in order for this to work? Exactly.
Chris Wedding:
Even better.
Bryan Hassin:
And it’s funny, you have those conversations and you ask those types of questions or those types of reframes and you get some very smart people thinking a little bit more
laterally and thinking a little bit outside of the constraints of the status quo that they're used to, and they come up with some really amazing things.
Chris Wedding:
It's true. How about if you're hanging out with your younger self, Bryan, give us some advice you’d pass to him to be, take your adjective, happier, more effective on this journey?
Bryan Hassin:
Well, first I’d tell him to enjoy the period of his life where he really had a lush head of hair. I say that as I'm sitting across from you, the long-haired monk and me with my shaved head.
I've always been a sprinter. I was a sprinter on the football field, I was a sprinter in career, I always want to be out there ahead of everyone else, doing something first. I started my first serious software venture while I was still in university, I took over my first CEO role at 24. But just as a consequence, I made a lot of mistakes. I did a lot of bumping around like a pinball learning a lot through the school of hard knocks and I'm not sure that was all necessary.
I may have been better served by spending some time working for someone else or someone’s else who really knew what they're doing and really having the humility to learn from others rather than just going out there and doing it all myself. Maybe a corollary as well is, not just having the humility to work for others, learn from others, but to ask for help as well.
We were talking about this before I think you hit record, but there's so much in this entrepreneurial space of chest thumping when you ask someone how it's going, “It’s going well, we're crushing it,” et cetera. I mean, you know the entrepreneurial journey is challenging and can be lonely, et cetera. Chris, I'm sure you know from the cohorts that you run, that the best learning and the best conversations really happen when founders open up and are vulnerable with each other. Sometimes they're content learnings and sometimes they're just psychological, just feels great not to be alone, but there's someone else who's experiencing that same thing.
So, I wish I'd learned that a little bit earlier in my life and felt less of an obligation to be wearing a persona that was always successful.
Chris Wedding:
You should have been that vulnerable football player, right?
41:03
Bryan Hassin:
That's right.
Chris Wedding:
Hey, let's talk about habits and routines. Look, we're recording this in January, it is the season to be rethinking these things. Whether it's daily, weekly, monthly, describe some habits that keep you healthy, sane and focused.
Bryan Hassin:
Sure, let me describe maybe a couple tried and true and a couple that I'm experimenting with because as you say, it's January and it's the time for new experiments. I learned a while ago that I'm a moving meditator. I don't have a lot of success when I try to sit still and meditate, but I can do some of my best thinking, have my best epiphanies when I'm doing yoga, or when I'm running or I'm out on the trail, what have you.
And so, I found myself recently falling into a pattern of always listening to content while I was doing those things. I was trying to catch up on all my podcasts or what have you. As a consequence, I was cheating myself out of this great thinking time, this great meditation time. So, now I'm having a lot more success and having the discipline, A, to do those activities earlier in the day, so they can help get me in the right frame of mind for the rest of the day and B, not distracting myself with content, but really freeing up my mind for epiphanies.
The second, I've got, I think we all learned this during COVID and remote work. If you want something to happen, you've really got to protect it, put them on a calendar and I've had a lot of success putting it publicly on my calendar. Like this is the time that I'm going to exercise. This is the time that I'm going for a run. So, not only does it protect my time for that and my priority for that, but it also communicates that to my entire team.
It's one thing if you say, “Hey, at this organization, we value work-life balance,” whatever, but it's another thing if the CEO has got it on their calendar, it provides implicit permission for everyone else to do that. By the way, it doesn't have to be exercise. I'd put a nap on the calendar as well and be very glad for it.
Couple of experiments that I'm running right now. I just started using software. Actually, you may know Aaron Houghton, he was an entrepreneur out of UNC Chapel Hill, had a couple of big successes, but found himself still struggling with anxiety. So, doing a lot of mental health work for himself as a founder and then saying, “Hey, well maybe other founders could use this as well.”
So, he’s got an app called Founders First that's a habit development and mental health app for founders or employees of early-stage companies. I'm enjoying it a lot so far, so jury's still out, early-stage experiment, but Founders First so far seems to be pretty cool.
Second, this is an idea I had while we were driving over the holidays to visit family and I was listening to greatest hits, songs that I really love, including a bunch of songs that give me chills or bring me to tears. I’d get so energized when that happens, so I'm trying to start the day, every day with a song that gives me chills and/or brings me to tears and just set my mind state right as I try to go out and do something really inspirational. Try to start off really inspired. So far that's a lot of fun. We'll see how that goes with the experiment as well.
44:06
Chris Wedding:
Moving meditation, like that. I was just saying on a podcast recently, there is science saying we do think better when moving. Now, some would argue, “Well, are we supposed to be thinking while meditating?” I mean, kind of, potatoes, potatoes, right? Your comment about always squeezing in content, I can totally relate. It's like, all right, I'm going to the restroom. Well, I got to put a podcast in to go to the restroom. Dude, it's like three minutes.
Bryan Hassin:
That really resonates with me. Yeah, it really resonates with me.
Chris Wedding:
But it's like by analogy, if your paper's already full of notes of color, how are you going to write new stuff there? You need the blank space to have those. Oh boy, we can go on and on here. Let's go to the next one, only because of time. Let's talk about recommendations, Bryan. So, books, podcasts, tools, quotes, what are two or three you think folks who are listening might benefit from?
Bryan Hassin:
So, first let me give you a spicy take. Almost everyone on every podcast that's climate related who asks for a book recommendation will recommend Ministry for the Future and I explicitly—
Chris Wedding:
What do you mean?
Bryan Hassin:
…de-recommend it. I don't recommend Ministry for the Future. I think it's got a very evocative opening chapter and then I find it to be frankly boring after that. It has some interesting technological ideas, but then it says, “There's this one great,” I won't spoil it, but, “There's this one great thing that we did and that saved everyone.” I don't think that's really the way things are going to work out, but it does paint some interesting pictures of solutions that could be out there.
I think for a more compelling thing that gets you to the same place, I really like The Expanse series. It's a hard sci-fi series set in space. Space, the first frontier, or maybe not the first, maybe underwater was, but the great frontier where sustainability is really important. Reading The Expanse series, that's where I first learned about cell cultured meat, for example, and a number of other technologies that actually now are starting to play a really prominent role in the pathways for climate tech.
From a leadership standpoint, I spend a lot of my time thinking about how is my leadership going to be a force multiplier that helps us achieve goals. I'm a big fan of the work of George Kohlrieser, his original book, Hostage at the Table, because he was a former police hostage negotiator, applying some of those principles to psychology and leadership. Then I think his more recent book called Care to Dare, it's all about secure base leadership and how as children, we're programmed to take risks, to risk pain. Like learning to walk, we might fall down because we know that we've got a parent or a caregiver who's there to pick us back up. We've got a secure base nearby.
It becomes so ingrained in us that even as adults, if we want people to take risks, we need to make sure that they've got a secure base on which to take those risks and take those big ambitious swings. So, it's important for you as a leader to create that environment for your people. It's also important for you to create that environment for yourself if you want to be a big, bold, ambitious leader as well. So, love that work.
47:20
Podcasts, I’m going slightly off climate topic. Big shout-out to Azeem Azhar’s Exponential View podcast. A lot of our work at Third Derivative was trying to think, how do we exponentialize the work that Third Derivative is doing? How do we exponentialize the work that many of these promising technologies could have? And obviously that's a lot of the work that we're doing now at DexMat as well. And so, Azeem does a great job of staying on top of the technologies and the trends that are happening, really help you see around corners of what's coming next.
But if I could leave one thing that I think is really important for ambitious climate change makers too, it’s going to get out of the climate sphere and get out of the self-help books and the business books, et cetera. It's really just to keep yourself inspired by reading really awesome fiction.
So, I talked about imagination and courage and so for me, I need to go back frequently to books that inspire my sense of imagination and courage. And so, I go back frequently to The Hobbit, The Alchemist I love, I'll go to Calvin and the Hobbes, just an incredible childlike sense of adventure and magic. If you're like me and have small kids, there's a lot of opportunity to do double work here because the number of the animated films out there have these themes. Moana is one that I love.
Now, it's also one of the songs that I listen that give me chills, like the How Far I Go song, where she's imagining a future out beyond her island and she has the courage to go, take the bold risk to go out beyond the barrier reef, et cetera. By the way, it's all in the name of sustainability, I find it so resonant.
Chris Wedding:
If only there were a video to accompany the hand motion along with your enthusiasm, Bryan.
Bryan Hassin:
My Italian heritage will come out [crosstalk – 00:49:08].
Chris Wedding:
Yeah. That's right. You mentioned that, “Yeah, well, you asked for two or three, I'm going to break the rules. I'm an entrepreneur.” Ring's very true at our last climate CEO retreat, as I try to gather the talking CEOs back to the agenda, back to sit down, didn't listen too well. And one of them was like, “Yo, Chris, the reason we don't listen is because it's a bunch of entrepreneurs. We make our own rules, baby.” I was like, “I know, but I’m trying to help.” Anyway, well said. Hey, let's wrap up here. Final words, Bryan, this could be call to action, who do you want to hear from, that kind of thing, what you got?
Bryan Hassin:
By the time this episode airs, we should be public with the announcement that we just closed a round of funding. We'll be hiring like crazy. My approach to building a team is generally less focused on the specific roles that we think we need today, because by the way, those will change tomorrow, and more focused on just building an incredibly talented team. So, we have a strong bias for humility, curiosity, diversity of perspectives and experiences and networks, and certainly mission alignment and objectives. So, we'd love to hear from people who are inspired by our mission and want to be part of it.
50:23
We're also already hearing from funds about a potential next round of funding. So, if there are investment funds that like to completely disrupt some incredibly dirty industries and have the imagination and courage to support such a transformational startup, we'd love to hear from you. Maybe also in the interest of not just putting out requests, but achieving some karmic equilibrium by putting something out there as well, let me share a piece of advice that one of my sales mentors gave me a long time ago. I've been finding it very useful recently as we've been closing a round of funding and as we’ve been negotiating deals, et cetera.
In any negotiation, when you get to yes, when you get to the outcome that you're looking for, shut the fuck up and get out of there because if you keep talking, the only thing you can do is move away from yes. You can't make it more yes, the only thing you do is put the yes at risk. In a podcast when I've been talking a lot, you talk a lot about having two ears and one mouth, practicing the art of silence in this specific case might be appropriate way to end it.
Chris Wedding:
Well, I think the reason I have podcast guests is so that they talk a lot and I talk a little. So, mission accomplished and also good advice and a hilarious phrasing as well. Hey look, Bryan, thrilled that you found DexMat, thrilled that Third Derivative is crushing it and hundreds more companies to be scaled there. Look, man, rooting for you-all’s success.
Bryan Hassin:
Thanks a lot, Chris. We'll take all the rooting we can get. We'll take all the luck we can get. You know as well as I do, the path to success is nonlinear. It often has a lot of luck. It often has a lot of serendipitous connections from people who are rooting for you, et cetera, so we'll take them all. Much appreciated.
Chris Wedding:
Hear, hear. Cheers.
Hey there, it's Chris again. If you want more intel on climate tech startups and investors, please join the thousands of other founders, investors and world changers who have subscribed to our Substack newsletter at entrepreneursforimpact.com. Also, I'd really appreciate it if you took 90 seconds to leave a review on Apple Podcasts or give us a five-star rating on Spotify. This feedback is the number one way to draw more attention to the inspiring climate CEOs and investors I get to interview here. All right, until next time, keep on fighting the good fights.
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