Startup Series: Epoch Biodesign
Today's guest is Jacob Nathan, CEO and Co-Founder of Epoch Biodesign.
Plastics are among the most visible and ubiquitous environmental issues plaguing Earth today. Hundreds of millions of tons of plastics are produced every year, but they weren't mass produced until after World War II (that's just one human lifetime ago). As a byproduct of the fossil fuel industry, plastics contribute significantly to the value of a barrel of oil, they create considerable emissions when produced, and they release carbon into the atmosphere when they are incinerated at the end of their lifecycle. So while plastics are a key building block of our modern world, they're also very problematic.
Epoch Biodesign is on a mission to scale and industrialize biology to solve the world's biggest climate challenges, starting with an enzyme that eats plastic and converts it to industrial chemicals. The company is currently working with unrecyclable plastics that would otherwise go to landfill or incineration. The resulting molecules from their unique biological process can be used to create new products like adhesives, cleaning products, and fertilizers.
We have a great discussion with Jacob about the role of plastics in society, their impact on climate change, how Epoch Biodesign's technology works, and the company’s plans to leverage modern compute power to unlock other biological innovations in the future.
Enjoy the show!
You can find me on Twitter @codysimms (me), @mcjpod (podcast) or @mcjcollective (company). You can reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded July 15, 2022.
In today's episode, we cover:
An overview of plastics, their origin, widespread uses, and impacts on the environment
Plastics and the fossil fuel industry
Problems associated with recycling
End of life pathways most plastics take
Epoch Biodesign's solution to addressing the plastic problem
How enzymes can break down plastics and convert them into useful chemicals with a reduced carbon footprint
The company's cell-free fermentation process and target outputs
CO2 emissions associated with producing and incinerating plastic chemicals
The origin of Epoch Biodesign
Jacob's background and how he met his Co-Founder, Douglas Kell
Douglas Kell's extensive background in systems biology, machine learning, etc.
How Epoch Biodesign uses machine learning and tooling to design a computing platform for plastic-eating enzymes
Future applications of the company's proprietary methods of designing biology
How Epoch Biodesign's software enables them to scale and solve climate problems faster
The company's business model
Adjacent opportunities including textiles
Epoch Biodesign's seed round and future financing
Who Jacob wants to hear from and open positions at Epoch Biodesign
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Jason Jacobs (00:00):
Hey everyone, Jason here. I am the My Climate Journey show host. Before we get going, I wanted to take a minute and tell you about the My Climate Journey, or MCJ as we call it, membership option. Membership came to be because there were a bunch of people that were listening to the show that weren't just looking for education, but they were longing for a peer group as well. So we set up a Slack community for those people that's now mushroomed into more than 1,300 members. There is an application to become a member. It's not an exclusive thing, there's four criteria we screen for, determination to tackle the problem of climate change, ambition to work on the most impactful solution areas, optimism that we can make a dent and we're not wasting our time for trying, and a collaborative spirit. Beyond that, the more diversity, the better. There's a bunch of great things that have come out of that community. A number of founding teams that have met in there, a number of nonprofits that have been established, a bunch of hiring that's been done, a bunch of companies that have raised capital in there, a bunch of funds that have gotten limited partners or investors for their funds in there, as well as a bunch of events and programming by members and for members, and some open source projects that are getting actively worked on that hatched in there as well. At any rate, if you want to learn more, you can go to myclimatejourney.co the website and click the become a member tab at the top. Enjoy the show. Hello, everyone. This is Jason Jacobs. And welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help.
Cody Simms (01:56):
Today's guest is Jacob Nathan, CEO and co-founder at Epoch Biodesign. They're on a mission to scale and industrialize biology to solve the world's biggest climate challenges, starting with an enzyme that eats plastic and converts it to industrial chemicals. Also, you might notice that I'm not Jason. This is Cody Simms, Jason's partner at MCJ. I did today's interview with Jacob at Epoch Biodesign, and you'll hear me take on episodes here and there going forward. I was looking forward to this conversation with Jacob because plastics are quite literally everywhere. Hundreds of millions of tons of plastics are produced every year. And in the big scheme of things, this is a new phenomenon. Plastics weren't mass produced until after World War II. That's just one human lifetime ago. And while we've gotten really good at creating plastic, we have not gotten good at removing plastic. Plastic recycling levels are quite low. And the vast majority of plastic that's created ends up incinerated in landfills or in our natural ecosystems, like the ocean. Plastics are a byproduct to the fossil fuel industry. They contribute significantly to the value of a barrel of oil, they create considerable emissions when produced, and they release carbon into the atmosphere when they are end of life via incineration. So while plastics are a key building block of our modern world, they're also very problematic. And to me, they're a metaphor for the transition we're going through generally right now, as we create a decarbonized world. Plastics are part of, I don't know, modernization 1.0. They've helped society thrive up to a point. But when you factor in their externalities, they don't scale. We've hit a ceiling. And now, it's time for innovators, like Jacob, to show us that there's a better way of doing things. We have a great discussion about the role of plastics in society, their impact on climate change, how Epoch's technology works and how Epoch plans to leverage modern compute power to unlock other biological innovations in the future. Jacob, welcome to the show.
Jacob Nathan (03:48):
Hey, great to be here.
Cody Simms (03:49):
I am so interested to learn about what you're building at Epoch Biodesign, because you're taking an approach that I think is one of applying deep technology to a problem that we're swimming in, frankly. And then yet, your technology potentially can solve other huge problems as well. And so I think we're going to approach this conversation almost like peeling layers of an onion, but what I'd love to start with is just the space of plastics. The thing that always kind of really hits me upside the head, is that when I think about it, plastics are really only one human lifetime old, right? Like, plastics as a mass production phenomenon really only started happening post World War II. And so you think about our grandparents or great grandparents basically grew up in a world where plastics weren't a thing and now, they are literally everywhere. So maybe talk a little bit about just setting the stage of what is going on today in the world of plastic production, what's the growth rate? If nothing changes, what kind of world are we going to find ourselves in with respect to plastic? And just help us understand the scope and magnitude of the plastic problem.
Jacob Nathan (05:05):
For sure. So yeah, I'll start off by saying plastics are awesome, right? They've enabled so much of our modern lives, everything from sterilized medical equipment to frankly, preventing food spoilage and figuring out, "Hey, if we put this piece of food into this plastic packaging, then it's going to last way longer, we can make sure we get it to the consumer and reduce food waste." Plastics kind of have a bit of a funny origin. We see a lot of pictures today of sea turtles like wrapped in these things and all of our favorite cuddly animals. But actually, plastics... The very first one, Parkesine, was invented as a cheap replacement for turtle shells, for glasses, for spectacles, and a replacement for the ivory used in billiard balls for snooker and other things as well. So we actually would've driven those animals to extinction far, far earlier if it wasn't for the invention of plastics. But you're right.
Jacob Nathan (06:00):
So these materials were kind of used in quite niche applications. Then, post World War II, a bunch of people realized, "Hey, we're expanding our extraction and refinement of fossil carbon. We've suddenly got all these side products, things like ethylene gas, and we should figure out how to make things out of those." So polyethylene, which is kind of the most common plastic today, I believe it was [inaudible 00:06:25] chemical at the time, or DuPont, one of them. They realized they could produce this at scale and it had tons of different applications. People loved the convenience of kind of single use taking things off the shelf and just throwing them in the bin. And so throughout the 20th century, production absolutely exploded. In the early 20th century, it's continued to explode. And really, the path we're on is one of quadrupled 2015 levels by 2050, which is really not a particularly nice prospect by any means.
Jacob Nathan (06:58):
And we're actually still grappling with what that means for the world. So we talk about a world of plastic, right? Like you mentioned, we're literally swimming in this stuff. All of our favorite animals are getting caught up in it, but that's not to mention the substantial climate impact that this is having both in terms of the CO2 emissions associated with production, with the kind of management of the plastic life cycle, but also looking at plastics impact on our natural ecosystems and our Earth's natural carbon sinks as well, which we're only really just beginning to understand. Potentially the kind of scariest part, and it's quite easy to go down this rabbit hole as well, is looking at the effects the plastics are having on human health. There are recent reports of microplastics being found in the majority of blood samples that they took in the study.
Jacob Nathan (07:53):
And we don't even understand the impact that this is beginning to have. So our use of plastic is absolutely exploding within the sort of fossil fuel industry. Look, combustibles are going out of fashion. Everyone's buying electric cars. We're beginning to realize that, frankly, it's just going to become cheaper to do that. So increasingly, people are saying, "Well, what can we do with all of our previously invested assets in fossil extraction and refinement?" And so they're looking towards non combustibles, like plastics, like chemicals, where we're seeing massive, massive growth over the coming decades.
Cody Simms (08:28):
And do you expect... If you look at a barrel of oil, I don't know what value of a barrel of oil today is the chemical output of the oil, as opposed to the energy output of the oil. But what I'm hearing you say is likely, the value of the chemical output on any given barrel of oil is likely to actually increase just due to the use of oil as energy hitting a decreasing turn over the coming couple decades, hopefully. Is that an appropriate assumption to make?
Jacob Nathan (08:54):
Yes, exactly. So essentially, we're going to see a greater and greater fraction of that barrel or that kind of container of gas be used for plastics production versus yeah, being used for kind of direct energy production or as well fuel to put in your car.
Cody Simms (09:11):
What's the recycling problem as it relates to plastic? You hear that generally, virgin plastic is cheaper and easier to make than recycled plastic. I assume some of that is just again, because of the amount of infrastructure that's already created to harness the value from oil and these fossil feed stocks. But help me understand why recycling plastics is so problematic today.
Jacob Nathan (09:35):
Yeah. So when we talk about plastic, unfortunately it's not just one type. We have a bunch of different types of plastics, they're used in all sorts of different applications. They're layered on top of each other. They're colored in weird and wonderful ways. And that makes it a real challenge to just take a mixed bag of lots of different types of plastic, separate it from all the cardboard and the metal and the paper that you're putting in there, and then separate it again into individual streams of plastic. So that in and of itself is a challenge, right? Just you've got your waste, now what do you do with it?
Jacob Nathan (10:08):
So it varies by a place to place, depending on the waste management infrastructure. Some countries have far better systems for doing this. Some countries have policy incentives to make sure that waste is collected and treated properly, many do not. But it's just a really expensive process to take the stuff that goes into your recycling bin to a sorting facility, to then send it onto a recycling facility, and then sort everything into the individual stream required to make a high quality feed stock to make new plastics. The way we recycle today, if it even gets to that point, is the plastic is chopped up into lots of little flakes, it's then melted and extruded, and then chopped up into these kind of pellets, which can then be reformed to make new plastic products.
Jacob Nathan (10:51):
And that's kind of the best case scenario. So when we recycle a plastic bottle, it's often not turned into a plastic bottle. Throughout that recycling process, the material is downgraded in quality and the molecular chains that make it up, they become shorter, they become weaker. You don't want to create a Coca-Cola bottle that's going to have all the Coca-Cola kind of falling out at the side of it, right? So this stuff gets blended with new virgin plastic, usually in a 30% recycled, 70% virgin mix in order to make something that is of a high enough quality to put back on the shelf. So that's your best case scenario.
Jacob Nathan (11:25):
A lot of the time though, that plastic bottle gets converted into polyester fiber to be spun into a carpet or a piece of sports clothing. And there's very, very little recycling for that kind of stuff. So oftentimes, you're looking at sort of a once around a recycling loop, and then you're going back into a product, which eventually, is going to make its way into landfill or incineration. So it's incredibly expensive just to get the plastic there in the first place, but then you also have this technological challenge of creating a high enough quality polymer to then use in the very same applications that your feed stock has come from.
Cody Simms (12:03):
And so maybe then talk about for that plastic that can't be recycled, what does that end of life look like? So like you said, you're either burning it, putting it underground, or sadly finding its way into the ocean. What are the end of life pathways that most plastic takes today?
Jacob Nathan (12:16):
So most plastic today is going to end up in landfill, incineration or like you said, kind of worst case scenario, which is in our environment in all the places that we don't want it to be. The stats are pretty murky actually on exactly how much gets recycled. There's this big stat that's sort of 9% of plastic gets recycled, but a lot of the ways these statistics are counted are sort of, if the plastic is sent for recycling, it counts as recycled. When, in reality, it may not actually be recycled. It might be sent to a totally different country where it might be burned or it might be landfilled. And so getting exact data on how much plastic is recycled, how much goes to landfill, how much goes to incineration, and then how much ends up just kind of in the environment is quite difficult to do. What we can say very, very safely, is that the vast majority of this stuff is not ending up where we want it to be.
Cody Simms (13:05):
So let's talk about what you're doing about this. So you have built a new process and a new enzyme or protein, I guess that actually can take plastic waste and essentially eat it and convert it into chemicals. At least that's what I understand. Maybe articulate that a little more professionally than I've just done.
Jacob Nathan (13:25):
Yeah, no worries. That's pretty much what we do. So enzymes, just to begin with, are these incredible little nanomachines that exist in nature. They enable all these highly complex chemical reactions to happen in our body. They enable us to digest food, they enable plants to turn CO2 and water into oxygen and sugars, and they really sort of make biology work. So in the similar way to our bodies converting food into energy, we are developing plastic eating enzymes that can take plastic and convert them into chemicals. And these are exactly the same chemicals that today, we would make from fossil carbon. So what we can do, is we can create an end of life solution for these unrecyclable plastics, the stuff that's ending up in landfill or incineration or in our natural environment. But by doing that, we can also create chemicals out the other end that have a substantially reduced carbon footprint compared to the incumbent methods of chemical production that we have today.
Cody Simms (14:26):
And are these chemical outputs things that would then tend to be used for plastics? I'm curious how circular this becomes. Or are they chemical outputs that would be used for other processes, like agriculture and whatnot?
Jacob Nathan (14:40):
Absolutely. So we can make plastics from them. We might choose not to, though. So these are like platform chemicals that are made today that are used in a ton of different industries. Yes, everything from agriculture to plastics manufacturer, coatings, lubricants, really sort of everything in between. Even consumer products. And so what we're essentially doing, is creating a more sustainable source of these chemicals. So things that are not derived from dead dinosaurs underground. And doing so in a way where we can create the very same molecule that can feed all these different industries. Ultimately, what people would like to use them for is their choice.
Cody Simms (15:12):
So walk me through an end to end... You get a bunch of plastic that's about to be end of lifed. You put them in some kind of large bioreactor and you get an output. That's a very simplistic drawing that I can do in my head, but maybe walk us through what that process actually looks like.
Jacob Nathan (15:29):
That's essentially the process. So we take all these unrecyclable plastics. In the first instance, we'll be looking at a single type of plastic versus a mix. But in the future, we definitely want to explore mixed plastics further. We take them, we shred them up into little flicks, we then put those into a big bioreactor. So the same thing that we use to brew beer. And then we use a novel form of fermentation called cell free fermentation, which uses only enzymes, not the cells that are living things that need very specialized conditions. We let that digest. And what we're left with then, are the chemical products, which can be sold as a mixed product or separated out into the individual streams and then put on the market just as any other chemical product would be.
Cody Simms (16:12):
And most microbial activity today, I think is done with typically like a yeast or an E. coli or something like that is part of your magic sauce that you've found alternative microbes to be able to do this with?
Jacob Nathan (16:26):
So whilst we work with microbes in the lab and we use microbes to actually produce the enzyme, when it comes to the conversion process where we take the plastics and we turn them into chemicals, there won't actually be a microbe present. It's only the enzyme on its own. And so that gives us better scalability, that gives us quite a lot of control over the process. The problem with microbes, is that they're just like us. They can get infected with disease and all sorts of other things. And so if you have this big vat of microbes and you're putting in all these dirty plastics, who knows what you're going to be introducing? So to avoid the need to kind of clean every individual piece of plastic, we're going with just the enzyme.
Jacob Nathan (17:08):
The other thing, is that microbes are living things. They need to breathe, they need energy to kind of keep their inner workings running. Enzymes are not living things. And so typically, what you would see with a microbial process, is you'd input your feed stock, maybe that's a sugar, and you'd lose quite a lot of that input in the form of carbon dioxide, from the microbes running their kind of regular metabolism and needing to stay alive. So you'd actually end up with a lower tonnage of output than you would your sort of tonnage of input. We don't see that with enzymes, because they don't need to be kept alive because they don't produce CO2 as part of their process. And so actually, what we have is for every one ton of plastic that we put in, because there's some very interesting chemistry that's happening, we actually get potentially more than one ton of product out. So we get the benefits of the scalability, we get the benefits of those improved economics, and we get the benefits of not having a big vat full of infected microbes.
Cody Simms (18:08):
And can you change the cocktail in order to create different types of chemicals? And maybe what are the initial sort of target outputs that you are building with this product line that you're delivering?
Jacob Nathan (18:19):
Definitely. And we can dive into this in more detail in a bit. Enzymes are programmable, they're tuneable. We've created a whole suite of tools to enable us to do that bette
Jacob Nathan (18:49):
So what's really cool, is that in these different chemical markets, there are different use cases at different scales. So as we increase the volume of our process of our technology, we can serve as different market segments. So we're really interested at the beginning of telling these awesome consumer stories, could we partner with a large CPG to take their waste plastics and convert them back into like cleaning products or cosmetic products? Which a consumer can then take off of the shelf and say, "Wow, every time I'm taking this product off the shelf, I'm preventing, a pound, two pounds of plastics from entering the ocean."
Jacob Nathan (19:23):
So there's a cool opportunity to tell some really interesting consumer facing stories. It's sort of the smaller scales. But as we scale the technology, ultimately, we're not going to solve the plastic problem. We're not going to have a dramatic dent on the CO2 impact of chemicals unless we're working at significant scales. So eventually, we'll begin to move into the larger kind of bulk and volume chemical markets looking at sort of plastics manufacturer and those types of areas, too.
Cody Simms (19:49):
And so if I think about the climate impact of this solution... I know we can talk in the future about other solutions you may have down the line. But what I'm hearing, is you will have an impact on reducing the amount of plastic waste in the world, which is obviously a good environmental benefit in general, for biodiversity or ecosystem health. And you will be able to more cheaply, potentially produce chemicals that today, many of these chemicals are themselves produced via fossil fuel or petrochemical, basically petrochemical outputs. And so the idea there, is if you can do that more cheaply, then those chemicals can be produced from a barrel of oil today, you start to reduce the value and demand of the barrel of oil from a chemical perspective. And so when I think of the broad impact on climate, there's the waste reduction side, which is the input part of your process. Which may not have a direct climate benefit, but certainly has a biodiversity and waste reduction benefit. And then there's the output side, which is hopefully having a macroeconomic impact on the price of chemicals and reducing the efficacy of fossil fuel as a chemical feed stock. Am I capturing that correctly?
Jacob Nathan (21:04):
Yes, there's a couple of extra things actually. So on the input side, dealing with the plastic problem, yes. In an ideal world, we are preventing plastics from going to all of the wrong places. I would actually define one of the wrong places as incineration. Like, we're taking carbon and we're burning it and we're putting it into the atmosphere. Sure, we're generating energy from it. But there are some cleaner sources we can generate that energy from. In an ideal scenario, we are preventing also, the plastic going to incineration. But actually, where the biggest reduction in CO2 and sort of the largest CO2 impact comes from, is from the production of the chemicals themselves. So the way we make chemicals today, is a great expense, extract all of this fossil carbon from underground in the form of oil and gas, we ship it all around the world, and then we refine it.
Jacob Nathan (21:52):
We use very high energy, expensive, high pressure processes to break down these big oil molecules into kind of smaller building blocks, that we can then make to use new things. We probably go through, on average, maybe two or three similar steps, depending on how complex and downstream the molecule is. And all of this is releasing CO2 and other greenhouse gases as well. Then, eventually, you end up with the chemical product, which you can put onto the market. And that's the way it works today. And with our process, what we're working on at Epoch, we take this plastic waste that would otherwise, end up in that incinerator. And we use very nice, low energy enzymes, very environmentally friendly processes to convert that waste into those chemicals in a one step process.
Jacob Nathan (22:41):
So what we don't have, are all of the emissions associated with the extraction and the refinement of this fossil carbon into all of these downstream chemicals for different applications. And so what we actually see, is that even when we take into account the CO2 impact of producing the plastic in the first place, right? So ignoring the fact that it's going to waste, what we can see is a very dramatic reduction on the order of about 75%, in some quite conservative examples, on the CO2 equivalent of chemicals made from our process versus chemicals made from incumbent fossil derived processes.
Cody Simms (23:19):
Got it. Yeah. My mind at scale then goes to like comparing an oil refinery to a large scale brewery. And obviously, a lot less emissions flowing out of the top of the brewery. So the last question I have about this particular product is, are there any unintended consequences that you may need to think about? You've got this enzyme that can eat plastic. Like, is there any biohazard risk or anything like that, that you all have to pay attention to as you continue to build this and produce it at scale?
Jacob Nathan (23:52):
Yeah. There was a show I believe in the '50s or '60s, well before I was around, called Doomwatch. It was in the UK. Maybe it made its way over to the US, I'm not sure. But essentially, one of the episodes was these plastic eating microbes and you had planes falling from the sky and buildings collapsing, this kind of nightmare scenario. So, that won't happen. Definitely. We're not looking to release anything into the environment. And the beauty of enzymes as well, is that they're not self replicating. So we don't have this kind of runaway microbe that's just going to go all over the place. Ultimately, there's always going to be a little bit of waste generated from these processes, right? So the start of it didn't quite get converted in the reactor, but really, these are kind of quite small scale, non hazardous things. So we're not anticipating that there are going to be any dramatic kind of side effects of deploying this. But yeah, definitely, we'll keep an eye out for any runaway microbes.
Cody Simms (24:49):
Fantastic. Let's talk about the bigger vision of Epoch. The plastic product, I don't even know if the product itself has a name. But I guess, how did you come across this particular solution and what is the broader technology platform that you are developing for essentially protein engineering?
Jacob Nathan (25:11):
Yeah, definitely. So how we came across this kind of first product was actually sort of... Well, the reason why we founded the company. So I was working on a school project during my final year in high school, looking at, "Okay. Well, how can we get rid of all this plastic waste?" Had sort of given it a lot of thought, had been quite sort of exposed to the plastic problem doing beach cleanups and exploring the great outdoors and seeing a plastic bottle kind of left, right, and center. Had dug into why we have this plastic problem. Of course, we have far too much production of it, but we also don't know what to do with all the stuff that's left over. Part of the reason is that technologically, it's very difficult to process and part of the reason as well, are the economics.
Jacob Nathan (25:51):
It just, as we discussed, often doesn't really make sense to recycle plastic when you could just extract and refine fossil carbon into this material. So I knew from my biology background in school, that enzyme would be the kind of most efficient way to do a chemical reaction, hence why we exist today. And so I embarked on a research project to go looking for plastic-eating enzymes. To kind of cut a long story short, went out into nature, took a bunch of samples, a lot of reading into the literature. And the early results were very promising. It was kind of a bad moment though, that I remembered, "Yeah, I don't have a PhD and probably need to find somebody a lot smarter than me to help me take that forward." So through a couple of mutual connections, I got in touch with my now co-founder, Douglas Kell, who's this kind of world leader in systems and synthetic biology here in the UK. And we got working on developing these plastic heating enzyme. What we sort of came to realize though, well, what I came to realize, was that Doug had spent the last-
Cody Simms (26:48):
I'm just going to interrupt you and say that in high school, I was really good at Nintendo. So you clearly took high school to a different level than me.
Jacob Nathan (26:59):
Yeah, don't worry. I got plenty of in as well in between, had to wait for the experiments to run. Got to entertain yourself somehow. But yeah, when I started working with Doug, when I finished up school and was kind of able to focus on building this project, what I sort of came to learn was that he'd spent the last 20 years of his career and I think over now 10 million pounds of government funding developing all of these new tools for designing biology, for making sense of these incredibly complex systems that make up life. And I was talking to him and we were discussing our strategies for how we were going to make these enzymes with the right techno-economics to make it at scale. And he started listing off all these incredible ways that things were going to be done.
Jacob Nathan (27:47):
And this was kind of in stark contrast to things that I'd read about before, about evolving and designing enzymes to different things. And so what we sort of realized in that moment, is actually, we could take advantage of all this research and build this really compelling technology platform for designing enzymes. First, apply and validate that capability on this first application, right? Designing enzymes to transform the unrecyclable, but then looking at biology as this whole tool to really solve some of the biggest environmental problems that the world is facing. Biology is the original secular economy. It takes carbon from the sky, puts it underground, puts it back up into the sky, converts all sorts of different substrates into new things and has the potential to... I think we can look to nature to solve some of the biggest challenges that we face.
Cody Simms (28:39):
And how did you two meet? What was the pathway to finding your co-founder and deciding to collaborate on this?
Jacob Nathan (28:47):
So Doug spent some time working with my great uncle in the early '90s on applying machine learning to biological systems. And when talking to my great uncle Mike about who I could work with to take this forward, he said, "Oh, you should definitely speak to Doug." Or gave me rather, his email address. Reached out to him. And I remember distinctly actually, I sent him the email, told him about what I'd been working on and I got an email about three minutes later back from him. I don't know how he wrote such a long email in three minutes, but I remember kind of going into my English class first thing at 8:00 AM the next morning, and just kind of sitting there, tapping the table, thinking, "Oh man, what am I doing in this English class? Like, I want to be using biology to try and solve these big problems." So yeah, I remember that very vividly.
Cody Simms (29:37):
That's amazing. And so now, you've got this hypotheses of, "Hey, we should be able to use biology to solve this plastic problem." And you've found Doug, who is this machine learning expert, who understands protein sequencing. I don't know if that was his area of expertise, but at some point, those two combined and you ended up both, using this knowledge to find the right set of proteins and enzymes for the plastic problem. But then you've also built this whole technical layer underneath that you can use to identify other solutions for other big global problems. So maybe help us understand sort of what that machine learning side of what you've built is capable of doing.
Jacob Nathan (30:20):
Definitely. So I think really the easiest way to begin explaining this is to kind of go back to what Doug has focused on for his whole career. So a lot of scientists, when they get started, they'll focus on a favorite organism or a favorite protein and they'll spend like their whole lives looking at this one very specific thing. Doug, after he finished his PhD, was given the opportunity to decide kind of which direction he wanted to go in and really kind of pick the path for his career. And he decided, "Actually, I don't think I want to focus on one thing. And instead, I want to develop enabling tools so that scientists can focus on that one thing. Let's begin to find new ways to measure these biological systems, but let's also look at new ways to design these biological systems."
Jacob Nathan (31:04):
He really spent... Well, he's 40 years into his career now. So he's spent all 40 of those really working at the intersection of all these different disciplines and he calls himself a systems biologist. So he works with the machine learning engineers, he works with the data scientists, he works with the synthetic biologists doing the actual wet lab work, as well as the organism engineers and really everything in between. During the '90s and 2000s, the US government spent $3 billion on the Human Genome Project. And suddenly, there were all these new ways to measure and observe biological systems at scale. And yeah, all one needs to do, is look at the cost of DNA sequencing over the last 20 years to see just how dramatically that has changed. And so that's enabled all these new tools for looking at and observing these systems at scale.
Jacob Nathan (31:56):
And at the same time, we've had this whole revolution in the way that we synthesize and build parts in biology and new molecular biology tools. CRISPR-Cas technology, DNA synthesis, all these different things coming together. So we now find ourselves in a position where we can design and build biology at scale, but then we can also observe that biology and we can begin to kind of look at patterns in the data. It also just so happens that computing has become really powerful and really cheap over the last few decades. And we're seeing all these new machine learning architectures enabling us to deal with very, very complex data and biological data can be very, very complex. So what Doug has developed and what we've now kind of taken forward in the company, are a set of proprietary tools that enable us to design novel features in biological systems that we believe will have a high chance of succeeding. That all happens in a computer.
Jacob Nathan (32:52):
And then we take those designs and we build them in our lab using high throughput automation, and a bunch of really cool techniques that the scientists will be able to explain better than I can. Once we've kind of built all those different designs, we test them and we see how well they work, whether that's for producing an enzyme or whether that's looking at how quickly that enzyme can break down the plastic. We take all of that data, and we use then machine learning to find the kind of underlying patterns, the underlying rules within that data to then look at the next set of designs that we should look at in the lab. We'll design them in computer, test them in the lab, learn from them again, and repeat that process until we have something that does exactly what we wanted to. And that's a generic set of tools, right?
Jacob Nathan (33:36):
So we're first applying this to our plastic eating enzymes. But in the future, we see biology as a platform tool to create solutions to all these different problems. And so approaching biology is this kind of programmable tool in creating methods that enable us to program it to do different things means that we can apply this to all sorts of different applications, everything from carbon capture sequestration, looking at sort of more environmentally friendly, more effective fertilizers, looking at how we can bioremediate all the horrible chemicals that we've put out into the environment.
Jacob Nathan (34:11):
Really, I believe that we are quite limited by our imagination at the moment. And in the same time that those at the time of the invention of the transistor, can anticipate that we'd be recording a podcast today or looking at memes on our phone after. Using that technology, I don't think we can really look out into the future and say, "Oh, well, we're going to be doing X, Y, and Z and utilizing all of this new technology that we've developed on the biology side." So I'm just very excited to see where all that goes. And I hope that Epoch can be a really big part of that.
Cody Simms (34:42):
And I think you've just articulated really, really well. People ask, "What's different this time around with climate tech versus maybe 10 or 15 years ago?" And honestly, I think a big part of the difference is the advancement of other compute technology that helps us solve problems faster. And so as opposed to everything being just done in the lab and having to have humans understand the outputs of the different hypotheses and assumptions that you're trying to develop in the lab, which ultimately results in slower product development cycles. And maybe building one product over the life of a company, you have built now a software platform leveraging the latest in AI and machine learning to rapidly interpret experiment results and help you get to solutions faster. And that's not technology that has anything to do with climate, that's just advancement in compute power that is enabling you to solve these climate problems faster. Does that resonate?
Jacob Nathan (35:40):
Yeah, exactly. So all of the novel stuff that we're doing on the biology side, the things that scientists and robots are doing in the lab combined with all of the software capabilities that you mentioned, these things didn't exist 10 years ago. The ability to do things in the lab today are so dramatically different from even five years ago. And recently, in the world of biology in 2020, DeepMind released AlphaFold. They solved this 50 year problem of how does a protein fold? And we're only just beginning to see the implications of this. That is one tool. That is one massive kind of multiplier for what our capabilities are. CRISPR, back in 2013, massive multiplier for what our capabilities are. And so what we're seeing in specifically biology, which is then enabling us to apply it to these big climate problems, is these kind of steady declines in cost. Driven by Moore's law in the cost of computing and DNA synthesis and DNA sequencing.
Jacob Nathan (36:37):
But also, then, these multipliers, these quantum leaps of these new technologies that come on board and enable us to look at things in a totally different way that previously would've taken decades, now take a week in the lab. That's the really exciting thing. So the development cycles are rapidly sped up. They're still not as fast as they could be, given that it's hardware and not software. But I think that enables us to create solutions and have a higher chance of successfully scaling, have a higher chance of actually effectively impacting the problems that we're going out to solve. These are things that simply didn't exist as little as 10 years ago. Exactly.
Cody Simms (37:16):
So you have these capabilities now at your fingertips. Let's maybe talk about the business model of the company. How do you decide what projects to do? Are these coming inbound to you? Are they outbound, where you're coming up with a solution that you think you might have a buyer for the output of your process? What does that look like to you so far, maybe with the plastic eating product, and then maybe talk a little bit about the roadmap of other things that you're experimenting with today. And how you're doing the customer discovery and customer development around those.
Jacob Nathan (37:47):
Definitely. So as a business, we're very, very focused on owning all the IP associated with what we develop and taking that forward to the extent that it makes sense. So if we look at the very specific application of plastics... Now, within that, there is so much optionality, there are loads of different types of plastics, there are loads of different types of chemicals. And we could build a huge business in that vertical alone, and I'm really excited to see where we can take that technology. The way we're thinking about it today, is kind of in two really basic phases. So because it's our ambition to own all of the IP and all of the technology associated with this, we are going to develop the enzymes, we're going to develop the means of producing those enzymes.
Jacob Nathan (38:28):
So we program microbes to basically make a lot of enzyme and drive down the cost of that catalyst. And then we will scale the first process, converting one type of plastic waste into a limited number of chemicals that we can then sell. And we'll take that to probably about the kind of 10 to 20,000 ton range. So similar to kind of Solugen's Bioforge, for those who are familiar. It's at that point where we say, "Okay, well, we're not a chemical facility operating business. That's not really what we want to be. Ultimately, we want to become an intellectual property business." And so what we then have at that point, is we have all the process engineering drawings and knowhow. We have all of the biology and the intellectual property, and proprietary strains and samples around that.
Jacob Nathan (39:15):
And then we can go to a bunch of different customers in a bunch of different industries and say, "Okay. Well, you big multinational chemical company, are interested in making your chemicals more sustainably because you think it's important. There might be a policy incentive, Hey, it might just be that this is a really cheap way to make chemicals," which is the case here. We'll then license this out to you. We can monetize that relationship through ongoing license fees, [inaudible 00:39:39] sales, and royalty payments on the chemicals, the custom design of the biology. So maybe they're interested in a very specific type of plastic to a very specific type of output. And we can utilize our biodesign platform to fine tune the enzymes to do exactly that for them. So there is a lot of opportunity for monetizing, both pieces of technology there. So we'll scale that up ourselves. Then, we'll go out and license it. As we think about kind of customer discovery within the plastic space and the conversations we're having around there... And really, we're engaging with the full kind of plastics value chain, right?
Jacob Nathan (40:11):
So everybody from... Well, the carbon being taken out of the ground to the plastic producers, the formers, the CPGs, the supermarkets, the waste managers, and really sort of everybody along that value chain. We're in a really unique position where we can save money for those who have a lot of plastic waste, and then we can make money for those who want sustainable chemicals. And we're looking at a wide variety of different applications on kind of both sides of that equation. And as we think about other products, I think focus is really important.
Cody Simms (40:44):
Just to make sure I understand what you've said so far. What I'm hearing you say, is you are going to absorb some early CapEx to build initial, essentially prototype facilities where you can take inputs and create outputs. And you may buy and sell those inputs and outputs to start to prove the model. But ultimately, you want to prove the unit economics of that process line, and then find essentially a buyer who would license the IP of that process line and then go scale it out themselves. To where you're not investing in large scale CapEx, you're essentially receiving license royalties from the process that they'll develop going forward. Am I generally understanding that correctly?
Jacob Nathan (41:25):
Yeah, that's correct. So we'll take on earlier CapEx burden in order to secure IP and frankly, to keep control over execution risk as well. It's very easy for a very motivated business unit manager at a large chemical company to move on to another job and somebody not so motivated to replace them. So that in the future, we can capture more of the upside and scale faster through licensing. Exactly.
Cody Simms (41:45):
Great. All right. So now, maybe then how do you get to [inaudible 00:41:49] of your product line?
Jacob Nathan (41:51):
Yeah. So we need to think about this strategically and we need to bring a lot of focus to this process. So we want to keep all of the products that we're creating underneath the kind of make the earth a better place umbrella. And so that can mean so many different things. Right now, we're very interested in leveraging our core capabilities, the two things we're really good at, which is making great enzymes, but then also specifically looking at making great enzymes to degrade plastics, which is quite a difficult technical challenge. So what we're looking at currently, is selectively taking on some adjacent opportunities, beginning to look at the textile space. Tons and tons of waste there. Arguably, in many ways, harder to deal with than some of the kind of regular post-consumer mushroom trays and yogurt pots that we're putting into the recycling bin.
Cody Simms (42:40):
And the vast majority of that is burned, as far as I understand.
Jacob Nathan (42:44):
Exactly.
Cody Simms (42:44):
Like, the vast majority of textile waste is burned.
Jacob Nathan (42:47):
Yeah, or ending up in really some place that you don't want it to. It's a frankly, hugely understudied issue, I think. Until we began to dig into it, we didn't even realize how big of a problem it truly was. It's pretty scary. Not to mention the sort of chemical runoff and frankly, that the human rights issues involved in that industry. So we want to look at adjacent solutions within the plastics space, kind of leveraging our core capabilities.
Jacob Nathan (43:13):
But eventually, branching that out into, "Okay. Well, we scaled our first product. We're substantially revenue generating from that and we've got a really kind of clear view of where that goes. We can begin to now look at leveraging all of our technology to develop products in the spaces that we think are really important." And these are spaces that we might see today. So in how we produce food and how we remediate nasty stuff from the environment. But as I mentioned, I think over the coming five, 10 years, we're going to see all these different advances in biology unlock applications that frankly, just weren't possible before. And so certainly, we need to be thinking about what the future applications could be beyond the ones that we think are possible today.
Cody Simms (43:54):
Fantastic. And you talked about how ultimately, you don't need to have capital for large scale CapEx. Let's talk about how you're thinking about financing this business. So you announced recently, your initial seed round, which I believe was $11 million led by Lowercarbon. We were honored to be included in that at MCJ. So MCJ Collective was participant in that, and BoxGroup and a number of other funds. What are you using this initial capital for and how do you view the capital needs of the business going forward?
Jacob Nathan (44:26):
Yeah. Well, first of all, delighted to have you guys on the cap table. This first round is going towards construction of some purpose built R&D facilities on new labs, to enable us to scale the science and start to invest in some new areas, grow the team so we can service all of that R&D need. And ultimately, improve the performance of these biocatalysts, so we can begin to meet our unit economic requirements for scaling the thing. We'd like to sort of reach a pretty reasonable scale within our labs for the process with this money. And then based on the data from that, we can go out and look at building the kind of pilot facilities and larger scale ones from there. And so to date, we've financed predominantly from Bench Capital. We've been fortunate enough to make use of quite a substantial amount of both European and UK government funding as well, should be [inaudible 00:45:14]. Always very helpful.
Jacob Nathan (45:15):
And in the future, we're looking to continue kind of leveraging those two sources. As we get clearer ideas of the sort of risk profile and unit economics of our process, we can begin to look at different sort of instruments for bringing in money. My hope is that essentially, these facilities are not going to be funded entirely by venture capital. We can find sort of less diluting sources in order to finance that, that scale up. Our CapEx requirements are actually not enormous when we build our scale up plan and when we look at sort of the numbers involved and the types of equipment involved, it's not as eyebrow raising as one might expect. But certainly, if there are ways we can bring on non-dilutive capital to meet that need, then we're looking at all those options.
Cody Simms (46:00):
The last question I have is really about you. Like, you started building this in high school, you dropped out of university to actually turn this into a commercial endeavor. Hopefully the listeners agree with me. I've been very impressed by our conversation. You seem wise beyond your years. So how have you built your knowledge of building out a company that has such an audacious mission and handling both the grand vision of it and the nuance of day to day operations? What's been your process for essentially training yourself as a CEO on the job?
Jacob Nathan (46:30):
By doing. By making mistakes and by learning from those mistakes, hopefully as quickly and painlessly as possible. I've been fortunate enough to have some really, really smart people who've been frankly, generous enough to give me some time and to sort of lend their ear on questions that I have. We've built a really, really exceptional team at Epoch. I'm absolutely inspired by these people I come to work with every day, honored to kind of be in their presence and be working on this project together. And these are people from very, very deep technical backgrounds that can really sort of help the non-scientists get their head around the very, very complex, difficult science that we're doing on a day to day basis. They come from commercial backgrounds, IP licensing, the chemicals industry. Our chief people officer, this is her third startup.
Jacob Nathan (47:22):
She's grown teams from 40 to 400. She seen the exits, the acquisitions, and everything in between. And so we've been lucky enough to be able to build that team. And growing up, I always wanted to be in a job where I was learning something new every single day. And sometimes, the learning curve is very, very steep. It certainly was at the beginning and continues to be at times. But I just really enjoy being challenged to try and think about things in different ways, I find that really fulfilling. And yeah, I'm lucky enough to have found myself in a role where I get to do that every day with really smart people and work on a really inspiring goal.
Cody Simms (47:58):
Fantastic. And for anyone listening who is inspired by what you're doing, whether interested in potentially working with you or partnering with you or whatever it may be, maybe give some pointers. What kind of roles are you looking to fill right now? If there are potential inbound business development interests, how should people lean in to what you're building? Maybe just to help listeners understand how to engage, if they're so inclined.
Jacob Nathan (48:22):
Well, we raised some money, we've got some exciting new labs and offices. We're hiring. So that's across a variety of technical and non-technical roles. You can see our open job positions at epochbiodesign.com. Even if none of those positions are like a direct fit for you, we'd love to hear from you. We're always looking for smart people to hop on the boat. Inbound business development, we'd love to hear about that. We're always looking for new opportunities to apply our technology in the plastic space and then sort of the broader biodesign space, looking at sort of partnership opportunities and all sorts. So equally, please get in touch through our website there. And more generally, we're very happy to have a conversation with investors, with advisors looking to get as smart on the space as possible beyond what we already know. So welcome all conversations on that front.
Cody Simms (49:10):
Jacob, anything else I should have asked?
Jacob Nathan (49:12):
No, not at all. It's been great to be on here.
Cody Simms (49:15):
Well, thank you for your time. I enjoyed learning a ton more about what you're doing and hopefully, everyone here did as well. Good luck with what you're building.
Jacob Nathan (49:23):
Thank you.
Jason Jacobs (49:25):
Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. That is .co, not .com. Someday, we'll get the.com, but right now, .co. You can also find me on Twitter @JJacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.
