The Entrepreneurs for Impact Podcast: Transcripts
#124:
Microsoft-backed Bio-cement and Bio-concrete from Algae — Loren Burnett, CEO of Prometheus Materials
PODCAST INTRODUCTION
Loren Burnett: We use biology. We use algae in a stimulated process called biomineralization, which is the same process that nature uses to create coral reefs and seashells. It's biology making minerals, and we are able to convert that to basically a zero-carbon bio-cement and zero-carbon bio-concrete. Concrete is the second most used material on earth, second only to water, and it's responsible for 8% of our CO2 emissions on an annual basis. So, we are completely focused on taking that number down to as close to zero CO2 emissions as possible.
PODCAST INTERVIEW
Chris Wedding: Welcome to the Entrepreneurs for Impact podcast. My name is Chris Wedding. As a former environmental private equity investor, four-time founder, climate tech CEO, coach, and professor, I launched this podcast to share the entrepreneurial journey, practical tips, and hard-earned wisdom from CEOs and investors tackling climate change. And if you like what you hear, please leave us a review on your favorite podcast player. This is the number one way that listeners can learn more about the climate CEOs and investors I interview. All right, let's get started.
My guest today is Loren Burnett, Co-founder and CEO of Prometheus Materials. Inspired by the composition of coral and seashells, Prometheus Materials combines microalgae with other natural components to form an ultra-low-carbon bio-cement and bio-concrete. In addition, Loren is a former co-founder, CEO, COO, or CFO for companies that have raised nearly $200 million in funding, where he led one IPO and 17 mergers and acquisitions and achieved five exits netting shareholders over $375 million in gains.
In this episode, we talked about what he's learned from building six companies. How he got the carbon bug, if you will, the inspiration to work in the climate space. The relationship between his company and biomimicry. The origin story for the company, including five years of university research with Department of Defense funding. How they plan to produce one gigaton of greenhouse gases per year when they're at scale.
His unique approach to getting his technology to market in contrast in how other low-carbon, concrete, and cement companies are doing so. Their top three customers and investors, including Microsoft. What it takes to get their new product approved by local and national building codes. The importance of knowing thyself so that you can trust your gut instead of accidentally listening to your irrational fears. Why Crossing the Chasm is his favorite startup book. Their long-term vision that uses biology to manufacture far more than biocement and bioconcrete and a whole lot more.
03:10
Hope you enjoy it and please give Loren and Prometheus Materials a shout-out on LinkedIn, Slack, or Twitter by sharing this podcast with your people. Thanks.
Loren Burnett, Co-founder and CEO of Prometheus Materials, welcome to the podcast.
Loren Burnett: Pleasure to be here. Thank you for having me.
Chris Wedding: We're going to get into the details of what of course you all do, but I think it'll be interesting for listeners to know this is your sixth company. They’re not small companies and the fact that you've had $375 million worth of exit gains for prior investors. So, all I can say is, I'm super pumped you're dedicating that experience to sucking carbon out of the world.
Loren Burnett: That's something that's extremely important to me. As you mentioned, I'm a serial entrepreneur. This is my sixth company. I can't stop starting companies and taking them from ideation through a successful conclusion. That's something that's just part of my psyche at this point.
One of the last companies that I was involved with, e-Chromic Technologies, we were focused on electrochromic windows, which was ultimately we were reducing air conditioner usage, which reduced electricity usage, and therefore, CO2 and carbon. That's really where I got bitten by the carbon bug. And so, I am just completely focused now on working with companies and creating companies to reduce CO2 to the atmosphere. We've really hit a critical point in climate change, and we need to be making changes as quickly as possible.
Chris Wedding: Hear, hear. All right. So, what's the elevator pitch, Loren, for Prometheus Materials?
Loren Burnett: We use biology. We use algae in a stimulated process called biomineralization, which is the same process that nature uses to create coral reefs and seashells. It's biology making minerals, and we are able to convert that to basically a zero-carbon biocement and zero carbon bioconcrete. Concrete is the second most used material on earth, second only to water and it's responsible for 8% of our CO2 emissions on an annual basis. So, we are completely focused on taking that number down to as close to zero CO2 emissions as possible.
Chris Wedding: I think when most folks think about algae, holding it in their hand, let's say, they don't immediately think, “Oh, let's make cement and concrete from this green, flimsy or maybe slimy substance.” Where did the idea come from, Loren?
Loren Burnett: So, it started with four professors at the University of Colorado, and they got involved with a research project with the US Department of Defense. Basically, DOD wanted to see if there was a way to create protective structures basically, in the middle of the desert and on beaches. They knew they couldn't fly concrete in because it was too heavy and they knew that they didn't want to truck it in over potentially long expanses of hostile territory. So, they wanted to see if they could use biology to create some sort of protective structure and material. And over the course of five years, the professors came up with this process of using algae.
06:45
This is just standard natural algae that you might find in an ocean or a lake, or even on the side of your fish tank and stimulating the process that's very standard in nature called biomineralization. That's how coral reefs and seashells are created in nature and they, over five years, created this process to make a biocement and bioconcrete. What they realized after they had succeeded at this was, they had also created a zero-carbon concrete and that's a very big deal.
Chris Wedding: We can think about companies that focus on cement and companies that focus on concrete, but not often do we hear them doing both of those things, the binder and the final product with the aggregate, if you will. Maybe say more about how you all chose to focus on one versus the other, which came first, where they both developed simultaneously?
Loren Burnett: Yeah, it really was fairly simultaneous in the sense that, as we were going through or as the professors were at that point in creating the biocement, then just extending that to adding aggregate and sand and a couple of other natural ingredients to create a bio concrete was a very natural extension. But the real key ingredient, secret ingredient was to create the bio cement.
Chris Wedding: Right. Well, I can imagine if there was a DOD use in an area full of sand, I can't imagine which part of the world that might be and that you've got plenty of aggregate, you just need the binder for that, you know?
Loren Burnett: Correct.
Chris Wedding: All right, so it’s becoming increasingly common, thankfully, for professors to co-create businesses, but that's not always been true, and often it's hard for all sorts of reasons for professors to start businesses. Maybe it's not part of how they're rewarded on their path to tenure, or maybe the licensing from universities can be, shall we say, tricky. What was that process like maybe for you all as a team and/or working with UC Boulder to get this from academia to a venture-funded hyper-scaling product company?
Loren Burnett: Well, this is the fourth company that I've founded that was based upon licensing technology out of either universities or research institutions such as the National Renewable Energy Lab. Each institution is very different in terms of how they go about that process, how they reward the professors involved with it, and how that works from a licensee's standpoint. What I found with the University of Colorado was that they had a very advanced process where they had really boiled it down to three different options of how you could go about this. All of which were very fair, I think, to both the university as well as to the licensee, which was us. And so, we chose a particular one and went through the process. Frankly, the licensing process was the easiest of any of the four that I've done.
09:53
Chris Wedding: So, in my work with dozens of climate CEOs, more than once it comes up, how do you structure a good relationship or a good license deal with the holder of the IP, often being universities? Given this is your fourth, any tips for what makes that process smooth where both parties feel like they're winning?
Loren Burnett: Well, that's the key right there and this is my philosophy in business overall, is every agreement that you go into has to be a win-win. If it's not a win-win, it's not a successful agreement and it won't last that long. It will be problematic. So, the options that the University of Colorado put forth from which we could choose were all win-win options and it really comes down to what works specifically for your business model. So, whether you want to pay higher royalties and have a lower ownership on behalf of the university, or have the university own a greater percentage with much lower royalties. And that really is just a function of your business model as well as your business objectives going forward.
Chris Wedding: Makes sense. Yeah, two big levers to pull on. Say more about the customers, whether they're pilot now or whoever they will be, what's the profile of the customers? Why do they say yes?
Loren Burnett: So, what we've done is, we are working with strategic partners that represent the companies that specify large amounts of concrete. So, Skidmore, Owings & Merrill, SOM, the architectural firm that architected the world's tallest building, the Burj Khalifa over in Dubai, as well as One World Trade Center in New York and many other notable buildings, they specify huge amounts of concrete.
We're working with Microsoft, who is building 50 to 100 data centers worldwide every year, again, using large amounts of concrete. And then we're also working with GAF, pardon me, and their sister company, BMI, which together represents the largest roofing materials company in the world, all three of those companies fit very closely into our model of being specifiers on the demand side. And so, those companies are not only strategic partners of us, but they like what we're doing so much that they also invested in our Series A round of funding.
Chris Wedding: Well, I got to say having, I guess maybe RAF is not, I mean, it's more common for them to be a strategic investor, certainly true for Microsoft as well. SOM, I don't hear much about them being a strategic investor at this stage, but I totally get the reason why those three are your preferred paths to market. I think coming out of the green building, green real estate world, I can certainly appreciate how the architects have a lot more power than most folks really understand. That if they say that the building is to be designed with products to meet these specs, well, depending on how specific those specifications are, it may be true that there aren't too many product companies out there that can meet those needs.
13:16
How about if you went one level up, the entities that are paying SOM to design these buildings, maybe the Microsofts of the world or others, do you feel like you need to reach one level up? Or that the demand from SOM is sufficient? Because the kind of clients they represent are those looking for kind of next gen and sustainability.
Loren Burnett: So, we feel really fortunate to be able to work with each of those companies and they all are just titans in what they do and who they work with. Working with somebody like an SOM, to follow up on your question there, they are working with some of the premier builders and companies in the world. And so, for them to be able to be in a position to introduce those clients to technology such as ours is a tremendous asset.
Chris Wedding: Yeah, amen. What do you feel the biggest challenges are to get your product from where it is today, I think you mentioned, four or five years of R&D to get to here, to the point where the product is available to be put in large buildings that SOM designs?
Loren Burnett: Yeah, the biggest challenge for us, but also for any company in the building materials space that has a new material is going through the regulatory process, the codes and approvals. There's not one code or set of codes that one needs to get to be approved. We have just recently been approved by ASTM, which is hugely important for load-bearing as well as non-load-bearing applications. So, that's a big win for us, but as you get into building codes, building codes tend to be local. They can be in a city, they can be in a county, sometimes in a state, or even a country. And so, navigating your way through that, getting those building code approvals is a challenge.
Chris Wedding: Well, maybe it's through ASTM, but how can you take steps to make it easy to get approval for your product in many jurisdictions versus a one-by-one approach?
Loren Burnett: There are certain approvals that tend to carry a lot of weight with some local jurisdictions. So, to the extent that you can get those under your belt, then you can use those as leverage to get through some of the more localized approvals. But nonetheless, it's still a challenge, and particularly with a new material, because we're not concrete. We are absolutely a different material than concrete and cement and so therefore you really have to go through. Really, it's an education process as much as anything else and so we're working our way through that right now.
Chris Wedding: How about geographies, is this mostly focused on the US, other parts of the world? And if so, for what reasons, Loren?
Loren Burnett: So, I mentioned carbon earlier, our overarching goal here is, as a technology and a product to reduce CO2 to the atmosphere by a gigaton or more per year and that is a big number. We're not going to do that by ourselves and we're not going to do it next year. It's going to take time and it's also going to take a process. Our process is to license our technology to large suppliers of concrete, cement, and concrete products worldwide. And through their use of our product and distribution of our product, then that's the way we will affect large reductions in CO2 as rapidly as possible.
17:23
Chris Wedding: Yeah, I hear you. Given this is the sixth company that you've started, what are some lessons that you think you're bringing in to make Prometheus more successful faster? Everything in a startup always comes back to the team and if you've got the right team in place, you can move things along in an expedited fashion as quickly as possible and as successfully as possible. If you've got the wrong team, it can really be a problem and that's one of the things that I've learned in my career. I’ve had great teams and I've had teams that were not great, and you really start to see the difference.
A bad team can make a great product a failure and a great team can make a mediocre product or even a bad product, a great success over time and with evolution. So, that's where my focus is on a team. Fortunately, at Prometheus Materials, we have a great product, a great technology, and a great team. And so, that is a phenomenal confluence of factors here that has me very excited as an entrepreneur and as a team leader.
Chris Wedding: For sure. I think a lot of listeners are in the process of building teams. Any tips on what you've seen over the years in allowing your selections to lead to the right individuals that make the right team?
Loren Burnett: You learn from mistakes. I think I learn more from my failures than I do from my successes. One of the areas where I had a team failure was basically, I created a company and put together a team that had one or two senior people in it that I was probably more impressed with their resumes and what they brought from an experiential perspective than what they brought as leaders, and from just an overall ability to create teams and cultures. I learned that was an expensive and hard lesson. Now, I am much more focused on the team and how they fit with what we're doing, what our objectives are, and just who we are as people. Because everybody's different than anything else at this point. That, to me, is just super critical going forward.
Hey, it's Chris. Just a brief message from our sponsors and we'll get back to the show. Just kidding, we don't take sponsors. On the other hand, I do have the privilege of leading the only executive peer group community for growth stage, CEOs, founders, and investors fighting climate change. With monthly group meetings, annual retreats, and one-on-one executive coaching calls, our members help each other boost revenue, impact, capital raised, clarity, confidence, work-life balance, and team effectiveness. Today's 30-plus members represent over $8 billion in market cap for assets under management for climate solutions. If you're interested, go to entrepreneursforimpact.com and join the waiting list today. All right, back to the show.
20:48
Well, your answer there helps us bridge to the second part of our podcast. We're talking about the person, not just the company. Maybe building on that, Loren, tell us one or two things that you strongly believe in. This can obviously be in business or even better, not necessarily in business.
Loren Burnett: In leading a business, I'm a big believer in, first of all, doing your homework and your preparation in how you build the business, the product customer fit, all of those product market fit, and all those types of things, but really also just believing your gut. So many times, as an entrepreneur and as a leader, you might have just a feeling and you can't point to an empirical reason why you're feeling that. But I find with myself at least, the vast majority of times when I have those feelings, either positively or negatively about something, they tend to be very good and very true. I listen to my quiet self.
Chris Wedding: And Loren, in those moments, how do you slash, how do we know whether we're listening to insightful intuition versus an irrational subconscious driven by fears that should be beaten down versus listened to?
Loren Burnett: You’ve just got to know yourself. You got to know yourself and who you are. I think that's more of a problem early in your career when you have less experience and don't know yourself as well as you do as you get further along in your career. So, I'm pretty confident in my ability to weed out the noise versus the important messaging and signaling.
Chris Wedding: Plenty of trial and error over six companies to see which voice slash when you listen to those voices I believe, huh?
Loren Burnett: Indeed. And so much of it also is how you react to situations. As an entrepreneur, as I like to say, you go through higher highs and lower lows, and sometimes you might have two or three of those in the same day or the same week. So, you've really got to be able to deal with those, and you've got to deal with them. I kind of use the British expression, be calm and carry on, and that's what you have to do. You've got to be calm, sort through the issues, figure out what's important and what's not important. Deal with the important things first, and set the strategy or make changes going forward.
Chris Wedding: Yeah, it reminds me of the expression that we are never as great as people say, we're never as bad as people say. You can, of course, translate that to a business, to any situation in the business, basically reducing the magnitude of the peaks and the depth of the troughs, if you will.
Loren Burnett: I totally agree and it's amazing sometimes how bad things can feel at 3 o'clock in the morning when you're lying awake at night and your mind's racing. You get up in the morning and you work through it and things generally speaking work out well.
24:02
Chris Wedding: Well, let's keep on that thread of being able to look back here and see what worked. What advice might you give your younger self, Loren, to be more effective, let's say happier or more productive on this path?
Loren Burnett: I think you've got to have a work-life balance, that's important. And as an entrepreneur, that's really hard because I mean, I may take a trip somewhere, but I never feel like I'm really on a vacation because I am always thinking about what's going on in the business. You can't separate yourself from it, but you need to be able to have some level of work-life balance. So, I think that's really important. Recreation is important on that side. Really listening to and working with your biorhythms is important.
Some people do their best work between 4:00 and 7:00 in the morning. If that's the case, if you feel like you're one of those people, get up and do it. Just because it's that time of day, doesn't mean you have to be at home or you have to be asleep. If you're highly productive, then get up and do it. If you're highly productive starting at 10 o'clock at night, then take advantage of that. So really, know yourself and leverage your strengths as much as possible.
Chris Wedding: Well, I think the listeners see a recurring theme in this podcast. We have biocement, bioconcrete, biorhythms. Yeah. Anyway, bio jokes. You mentioned “know yourself” a few times. What are some practices, methods, or whatnot, Loren, you found useful to listen to that voice, to find the quiet?
Loren Burnett: I meditate from time to time. I like certain recreational things like, I'm a skier in the winter time and a wannabe golfer in the summertime. Not a very good one.
Chris Wedding: Wannabe. Okay. I'll take that. Yeah.
Loren Burnett: But those are opportunities to get out and get fresh air, clear your mind, get closer to nature and I think things like that are super important, just to be able to get out and get away from it a little bit. Then when you come back, at least for myself, I find I come back and I've got a clear head. Potentially a new insight into a problem or an issue that I'm dealing with that maybe I didn't have before.
Chris Wedding: Yeah, that's when our subconscious can actually work for us, not against us. We planted the right seeds, then we get out of the office, and get active a little bit. How about some recommendations here, Loren, books, podcasts, tools, quotes, et cetera, that you think listeners may find value in?
Loren Burnett: I read a book and it's not a particularly new book, but it was written by one of the top consultants out in Silicon Valley back in the beginning of the heyday of software in Silicon Valley. It's called Crossing the Chasm and I take the lessons from that with me into every venture that I do. It's not only every venture that I do, but also any new product within an existing venture.
27:09
The lessons are, it's all about when you come out with a new product or a new company, you're initially focused on the early adopters. The early adopters are going to buy it regardless. That's what they do, the early adopters, but the key is to be able to cross the chasm. The chasm is getting from early adopters to the mainstream and that is absolutely critical to any company and to any product within a company. I'm always keeping that in mind when I'm looking at potentially developing a new product or starting a company. I think there are a lot of really important lessons there that continue on to this day. That's one of the areas that I'm focused on.
Podcast-wise, I just got exposed to a new one, new for me anyway, it's called Grow Everything. Our company is based on biology. It's based on algae. You mentioned algae at the outset. This alga is an amazing, amazing, I call it critters, they're amazing things. You can do everything from creating diesel and gas and other types of products to cosmetics, to food, to guess what? Who would have thought? Cement and concrete.
And so, it's opened my eyes to using and leveraging nature to help us solve manmade problems. I mean, nature is brilliant and there's so much out there. I mean, if you just think about the different medicines that are in rainforests, the potential remedies that are in rainforests, for instance, that we don't even know about and may never know now that they might have become extinct. But nature provides the opportunity to do a lot of really, really good and beneficial things to people and living things and the earth itself. And to me, that's the big eye-opener that I've had with Prometheus.
Our long-term strategy here is not just building materials, it's not just cement and concrete. Our longer-term strategy is to use biology to create all sorts of new materials. What's the next bio concrete that can be made from biology and what are the benefits from it? So, I'm a big believer in using nature.
Chris Wedding: Yeah, well, you’re preaching to the choir, my undergraduate degrees were environmental science, biology, and chemistry. And so, to hear solutions like this, they really are biometric, I was going to say in nature, anyway, that are based on biomimicry. It's pretty gratifying, right?
Loren Burnett: It is.
Chris Wedding: To hear names like Microsoft and SOM, and RAF, that are getting behind what you guys are doing, which ties well with the book you referenced of Crossing the Chasm, going from early adopters to mainstream. It looks like you all just kind of leapfrogged the early adopters because those three names that you reference as channels, customers, investors, they are mainstream. Is there a reason that that's true and you recommended that book, Loren?
I mean like I said, I take the lessons of that book to everything that I do in business. I don't want to sit here and I think it would be really arrogant on my part to say that we've just leapfrogged it. It is a process that you have to go through and we are early in the process, so I don't feel like we've leapfrogged it. Having said that, I love our partners and I think our partners are and will continue to be hugely beneficial in enabling this technology and this company to cross that chasm and to move into the mainstream.
31:04
If we're going to reduce carbon by a gigaton a year, that's mainstream. There is no other way to say it. And so, the mainstream is absolutely crucial for us to cross into. We have every belief that we will be doing so.
Chris Wedding: Loren, you've got the mic here, kind of in our final moments, what's the message that you want to leave listeners with? Whether that’s the kinds of future team members that you want to attract to this awesome team you've got, potential customers, potential investors. What do you want these kinds of folks to know about Prometheus Materials?
Loren Burnett: Well, we're on a mission and we're talking to potential folks joining the company. We're just beginning our Series B financing race. So, we're talking to investors and obviously, we're talking to business partners and potential users of the product and the technology. We're on a mission to reduce carbon in building materials, of which concrete and steel are the two worst violators of carbon emissions and embodied carbon, and we are going to succeed. And so, if you're interested in coming on board and joining us in any of those types of roles, we would be absolutely delighted to talk to you because this is a mission and this is an important mission to the earth.
We feel a sense of responsibility and obligation to take what we've been given. We've been given some great tools here, a great technology, and great timing, by the way, in the market, but also just in the world. The world is moving very rapidly to understanding the need to reduce carbon rapidly.
I started a company, this electrochromic window company focused on decarbonizing back in 2011, 2012, and that was cleantech 1.0. The Paris Accord objectives of 2030 and 2050, they just seemed so far away that if we didn't fix it, somebody else, either our kids would figure it out and technology would take over and it'd be done. It's not like that anymore. We're all feeling the effects of climate change, whether it's droughts, whether it's forest fires, whether it's category five hurricanes, tornadoes at night, and obviously rising sea levels that are very noticeable.
So, all of these things are becoming things that make this not something that's out in the future, but it's now and by the way, 2030, is six years away. Think about what you were doing six years ago, it's not that long. And so, what we're seeing is we're seeing that the market and the world are really evolving to understand that things need to get changed in a positive way, and that needs to happen very soon. And we're happy to be a major part of making that change.
34:10
Chris Wedding: Well said, Loren. Yeah, the future is here, as they say, just not quite evenly distributed. But I would like to believe that I'm fairly on top of things in climate tech, but I was totally unaware that there is this algae-based biocement, bioconcrete with the kinds of super credible partners and investors that you all have. So, look, super exciting. We're a very solutions-oriented podcast, I'm sure that's the same, of course, with you-all's team. We're rooting for you-all’s success, Loren. Looking forward to updates, man.
Loren Burnett: Well, Chris, thank you so much for having me and I appreciate your focus on this area. We need as many people talking about this and spreading the word as possible. So, thank you very much for your focus on it.
Chris Wedding: Hear, hear. Talk soon, man.
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