How to not be Another Failed Green Plastics Chemistry Company, Refugee shelters, & Selling to Producers, not Brands w/ Alex Blum (Applied Bioplastics)

In this episode Silas Mahner (@silasmahner) speaks w/ Alex Blum (@AlexBlum4Austin) Co-Founder and CEO of Applied Bioplastics (@abioplastics) about his journey into founding the company, their experience commercializing the tech, their business model, and his advice to other founders doing something similar.

In addition to having some great stories and things to say, Alex is also quite funny so it's a triple whammy episode. If you're a founder creating alternative plastic chemistry, you should be sure to listen to the part about where to sell into the supply chain (~48 min).

Enjoy the Episode! 🌎

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Topics:
**2:33 Intro
**4:59 Alex's Story
**13:10 Discovering the Tech
**21:08 Why Housing
**31:36 Tech Development Process
**39:11 The Biz Model
**49:45 How Others selling into the space should be done
**57:43 How their biz is split
**1:10:26 Don't be afraid to walk into the fire

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Links:
**Blossoms from Ash Documentary: https://youtu.be/M96s2I907gw
**Alex on LinkedIn: https://www.linkedin.com/in/alexappliedbio/
**Applied Bioplastics Website: https://appliedbioplastics.com/
**Check out our Sponsor, NextWave Partners: https://www.next-wavepartners.com/
**Follow CleanTechies on LinkedIn: https://www.linkedin.com/company/clean-techies/
**HMU on Twitter: @silasmahner

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Other episodes you might enjoy:
**Most Recent Episode: The Future of the EU Climate VC Landscape, Transparency, & Challenges: Exploring Climate Tech Investing w/ Heidi Lindvall (Pale Blue Dot)
**Similar Topic: Utilizing Carbon in Everyday Products w/ Aaron Fitzgerald of Mars Materials
**Something Totally Different: Hard Truths About VC, Raising Advice, & Small Fund Limitations w/ Susan Su (Toba Capital)

Transcript

Alex Blum: 0:00

The incidents of disease went down by 80% over two years. 80% and the other thing that I wasn't expecting, simply because I didn't know that they were measuring it, but they did measure home invasion, rape, and theft and found that there was a 100% drop over two years in people in my structures.

Silas Mahner: 0:27

Hello and welcome back to the Clean Techies podcast, where we interview climate tech founders and VCs to discuss all things building and investing to solve the biggest challenge of our generation climate change. Today we have a bit of a longer conversation with Alex Blum, the founder and CEO of Applied Bioplastics. This is a company that has developed a far more environmentally friendly plastic chemistry using cellulose, which comes from agricultural waste, which is a very, very abundant product or byproduct in the world. And it's really great episode for a few reasons. First of all, alex is actually quite a funny guest, so that's always great to have kind of added a little bit of lightheartedness to the topic, and he also has an incredible story. We started out with talking about his story, so it's a bit long of an intro, but it's really really worth hearing, in my opinion.

Silas Mahner: 1:16

And finally, the third reason I really like this episode is there's a very profound insight that he shared around how trying to decarbonize materials requires selling into the producers and not the brands. Like it's a common mistake that he made actually at the beginning and that a lot of people make. So I thought there was a really, really profound insight and if you are somebody building a materials, a green materials company. In particular, if you're trying to sell a green plastic and you're really pressed for time, I recommend skipping forward to around the 47 or 48 minute mark to hear when he talks about that, because, again, to me that was a really, really profound insight that I'd like for you to hear. So, without any further delay, let's get into the episode. All right, welcome to the show, Alex, excited to have you here. How are you doing today?

Alex Blum: 2:04

Doing well, silas.

Silas Mahner: 2:04

Thank you, great to see you Surviving the Texas heat, I hope, as we were talking about before the show. But anyways, I think let's just get right into things. I guess I'll maybe give a quick background. We have spoken before. Thankfully, we had the opportunity to meet over a coffee when you were in New York not too long ago. You had some pretty cool things you were doing. I'll let you talk about that if you like. But I guess let's just get into your background. Tell us a little bit about who you are, what you're doing today and how you ended up here.

Alex Blum: 2:34

Certainly Well. Thank you for the open floor, silas, and thank you for the invitation to the show. So I'm Alex Blum. I'm CEO of Applied Bioplastics Gosh. Where to start? I was in New York City when we met. I was the only entrepreneur that year invited to come speak at the United Nations about our housing initiative that we're doing in Bangladesh for the benefit of the victims of the Rohingya genocide, with ICDDRB, which is an NGO out of Bangladesh.

Alex Blum: 3:03

So, applied Bioplastics we make decarbonized, durable plastics for a number of different use cases. Primarily, we make injection moldable plastics that are substantially less expensive than commodity plastic, which is kind of a first for the market, and they are also substantially better for the environment. They're up to 85% less carbon emitting than normal plastics. They also reduce microplastics at end of life by again as much as 85%. In addition, applied Bioplastics creates IP for the production of refugee shelters which are made of a biocomposite material. They're made by hand, they cost around $1 a square foot and are supportive of cottage industries. So essentially, you're creating additional revenues, jobs and producing housing out of that, out of that, so it's really beneficial to the countries that adopt it. Obviously, most governments aren't able to buy it, so we're primarily talking to NGOs and private entities that build housing for low income people or for refugees, but regardless, we are working on operating in over 27 nations right now.

Silas Mahner: 4:20

Hey there, quick break to remind any founders or VCs listening. If you are looking for deal flow, seeking to raise funding, looking for partners to help service your needs, or perhaps you're looking for corporate investment partners, feel free to reach out to us through our Slack channel, which can be found in the description, because we meet a lot of people in this space. We set aside time each week to make introductions to the various people that we encounter. This is something we do free of charge in order to help these incredible companies solving climate change to scale. Looking forward to hearing from you in the Slack channel. Interesting, so this is quite fascinating. Let's talk a little bit more about how specifically you got into this, because this is like a really particular thing you're doing and I know there's a backstory there, so let's hear a little bit about that.

Alex Blum: 5:00

Certainly so. I used to be a sales guy. I mean, you can see the ponytail now, but back in the day I had the crew cut the khaki shorts. I was a tech bro, just like everybody else here in Austin, so I worked for companies like Oracle and Amazon startup called WP Engine, which does WordPress web hosting. And finally, my last job in Austin before starting Applied Bioplastics was ThousandEyes, which was a network monitoring platform which was later acquired by Cisco. Almost got to be coworkers with my sister actually, she's a senior security engineer at Cisco but I exited that company and started Applied Bioplastics before the acquisition.

Alex Blum: 5:39

Anyways, so in 2017, when I was working at ThousandEyes, I closed a series of really major deals. I was always good at sales, but this was a year that I had never seen anybody experience, much less myself Ended up closing my entire annual quota in the first two months of the fiscal year and received a $500,000 paycheck. Now, because I had been doing well in sales prior and I'm generally pretty financially responsible, I was debt free at 27, which is weird for an American, I know, but either way, I had this $500,000. I didn't have any debt, I didn't own a home and, looking at Austin real estate prices, I probably should have bought a house, but instead I wanted to donate all half a million dollars to charity and started out by funding a food kitchen here in Austin. That helped me out when I was briefly homeless, believe it or not here in Austin I dropped out of UT the university here right down the road for me now, which is quite fun, but either way, dropped out of the university right in the middle of the recession, couldn't find a job, couldn't find a place to live, and spent a few months under I-35 looking for a job and a house. But this food kitchen helped me out, so I made a pretty substantial donation to them. I started an advocacy group here in Austin that was working on a gun law which actually got over 100 elected Republicans to agree to it. Of course, the NRA ended up killing the bill, but we'll just finish waiting for them to go bankrupt and try that again pretty soon here.

Alex Blum: 7:13

But lastly, after spending about half of the money on charity that I had intended to spend, a buddy of mine had gone to college with Shafayat Farazi called me from Bangladesh and said hey, I heard you were doing charity work and he said I am. And he said well, there's some people who really need it out here. There's a lot of people that have crossed the border into Bangladesh and they're running from something and I don't know what it is. And he said that's terrible. Why would you go to Bangladesh? I mean beautiful country but there's 186 million people there in the country the size of South Carolina, so really really densely populated country and I realized that it must be really terrible, whatever they're running from, to go, want to live in conditions like that. So this is something I wanted to investigate. So I bought a ticket to Bangladesh. I took a month off. Work Business was very happy to see me go. They were like please stop selling stuff, you're very expensive this year. So I took a month off. I went to Bangladesh.

Alex Blum: 8:19

I realized upon arrival that there were 2 million refugees and I had about a quarter million dollars left. And I'm like what am I going to do? Walk around in hand Everybody had dime and tell them good luck, and they're like that's not going to work. How can I make a material difference to 2 million people with a quarter million dollars? So I realized that the only way to do anything of use to these people was to let the rest of the world know what was happening to them, because at this time as 2017, 2018, nobody knew what was happening in Myanmar. There had been some local newspapers, like the Daily Star out in Asia, that had covered that there was a conflict there, but most Western newspapers, most Western television stations were not saying a word about this genocide, that it was ongoing, kind of betraying the whole idea of the United Nations. Never again all that kind of stuff after the Holocaust. And so that bothered me and I decided to do something about it.

Alex Blum: 9:16

So I hired 18 people on the spot that week and together we worked on getting permission to get into and film in the Rohingya refugee camp, which remains the world's largest refugee camp. So there's 2 million people. The scale is mind-boggling. You can't imagine. When you think of 2 million people, you think of skyscrapers, right, but imagine 2 million people living in single-story tents spread out over a field. It's incredible. It's amazing in a bad way, but anyways.

Alex Blum: 9:52

So this group of people and I did some stuff we probably got a little in trouble for, but not only did we film in the world's largest refugee camp, we also made it across the border into Myanmar and got direct evidence of the crimes of the Burmese government. We had a drone shot down by small arms fire. But long story short, we got the footage we needed to and I'm sorry I'll hurry this part up. We ended up making a movie off of that. It won a ton of awards, including the Best Short Documentary, at a festival in London, the World Fest International in Houston, and it was bought by a distributor who put it on Amazon. So really cool success there. Some of the evidence that we gathered was passed along to a US senator who passed it along to the International Criminal Court at the Hague. So some of the footage we gathered was actually used by the Hague to try and hold the leaders of Myanmar accountable for their crimes against the Rohingya.

Alex Blum: 10:53

One last thought about the documentary. It's called Blossoms From Ash. It's currently available on Daki Bay, which is on Amazon. And what we found and I will repeat this because it's true, I have the receipts, we have the receipts, the world has the receipts.

Alex Blum: 11:08

But the reason for this genocide was that the Chinese government wanted to run an oil pipeline through this area, that the Rohingya lived the area of Arakhan on the coast, so that they could exploit some resources in the Bay of Bengal. Now, everybody needs oil pipelines, but normally nations do not murder for them, they just build them or pass a law saying that they can build an oil pipeline. But because of the unique situation between the Rohingyas and the country they lived in it's a Buddhist nation, the Theravada Buddhists. They're not really friendly to other religions. They don't really consider the Rohingya citizens, despite them contributing substantially to that nation. In fact, like six or seven of the writers of their Constitution were in fact Rohingya, but regardless, they don't consider them citizens and thus they did not want to share the wealth that came from building an oil pipeline through their land. So instead they murdered them all, or attempted to murder them all.

Silas Mahner: 12:12

Hey there. Are you building a climate tech business and looking for very specialized talent? Consider reaching out to our sponsors, next Wave Partners. Next Wave are experts in talent acquisition, recruitment and retention across the climate tech, renewables and ESG spaces globally. So if your team is growing or you're looking to make a career change yourself, feel free to reach out to Next Wave at Next-WavePartnerscom, or reach out to one of their consultants directly via their LinkedIn page.

Alex Blum: 12:36

Anyways, going back to applied bioplastics, and I'm sorry for the long digression there, but no, it's good, I think.

Silas Mahner: 12:43

Just to comment quickly. I know it's difficult. This is obviously something that could be an entire podcast of itself your story but it is a really incredible story. I don't want to overlook that. I don't want to just rush past it. I know we've got a lot to go through, but thanks for sharing that. I mean, it's really really quite incredible, and maybe some other people can have you on to talk about specifically that experience in detail. But yeah, we can continue on to apply bioplastics.

Alex Blum: 13:10

Absolutely so. While I was in Bangladesh, quite coincidentally, I attended a dinner while I was trying to drum up support for the movie. At that dinner I met a scientist by the name of Dr Mubarak Khan who invited me to his laboratory. So I went. I took a day and went to his laboratory and saw what he had been working on, and there were a number of things that he had been working on. And the reason he was working on these things is that there's a plant in Bangladesh called jute. They rotate it for rice so that they can re-nitrogenate the soil.

Alex Blum: 13:46

This was brought to India, in Bangladesh, by the British Empire because it makes great sackcloth, sailcloth and rope. So it was a great way to replenish their ship's supplies on the far side of the world. Anyways, that was a major export for both India and Bangladesh after decolonization until the invention and widespread use of nylon. So nylon's terrible for the environment. It's plastic, obviously. This natural fiber backing completely fell out of favor because it was cheaper, it doesn't stain, it doesn't crush, it's just a better material. And so now Bangladesh's have nothing to do with their jute other than rotate it for rice. But they've got these warehouses just filled with jute that aren't doing anything. They're hoping that one day they'll be able to sell it, but it's not moving anymore.

Alex Blum: 14:36

So Dr Khan had spent the last 25 years trying to fix this issue, trying to make jute useful again, and one of the inventions that he showed me, using jute fiber, looks like this. So this, if it looks like burlap and resin, that's because it's burlap and resin. The interesting thing about it is that this sample in my hand, despite it looking shiny and new, is actually about 25 years old. This is actually the very first sample he ever showed me. I asked if I could take it with me to evaluate it, so I've had the same piece this whole time, anyways. So this is about three millimeters thick. It uses three layers of burlap which is really hard to tell because it's kind of smooshed in there, but either way and polyester thermoset resin.

Alex Blum: 15:24

So really common, really cheap stuff. It's extremely strong, it's extremely durable, it's extremely lightweight, it's got great insulation properties and it's dog cheap, my God. It's like less than a dollar a square foot for a house, and I'm talking about walls and roofs a dollar a square foot for a house, and I thought this was amazing. I said you know, woven agricultural product, right, like everybody has, that Every nation on earth has access to woven agricultural product, right? Polyester, resin, gosh. That's one of the most common things on earth.

Alex Blum: 16:02

The small amount of chemicals that he used to make the reaction to make this last a really long time, I mean it's. You know, this is not plutonium, guys Like this is. It's not rare chemicals and it's not a very large amount of them either. And I said this is amazing. You could house every person on the planet for cheap using this material. Where's it deployed? Dr Kahn, I'd love to see it in action. And he said, well, nowhere. And I said, well, how long have you had? And he said 20 years. And I said what's wrong with you? And he says, well, I'm a chemist, not a salesman. And I said, well, I'm a salesman, not a chemist. Sell it to me. And he did. And then I hired him and then, after that, I, you know, I went to the University of Texas.

Alex Blum: 16:44

The head of the material science department, dr Chen, said this is really amazing, but I don't know enough about this, so let me refer you to someone else, which was Dr Larry Drozol. He's the lifetime achievement award winner in biocomposites. He said look, this is useless. And he said what he said it's useless. You know you could use it for your housing dreams, but it's not a business. And I said, well, why not? And he says, well, it uses thermoset resin, which means that once it's molded, it cannot be melted and remolded into a different shape. And I said, well, what's wrong with that? And he said, well, most plastics need to be molded and remolded. And I said, well, crap, is this completely useless? And he said, well, if you could somehow I'm not going to tell you how, but if you could somehow turn that into into something that could be used in a thermoplastic right where you've got the same agricultural product but in the same compatible but different plastic that you're using. This is a multi-billion dollar business, my God. And I said, well, will you help me? And he said, no, I just told you it's impossible. And I said, but, like, please? You know, on the off chance that you figure this out, whatever equity you give me for becoming your advisor will be very worth it. And I said, yes, it will be. And he said, okay, fine, I'll do it. And that's, that's the beginning of applied bioplastics.

Alex Blum: 18:07

Dr Dr Mubarak Khan, dr Larry Dazal, I came home with this news. I talked to my roommate of now seven years, but at the time three years and very close friend, colin Ardern, who has a degree in finance, marketing and international business. So he's got the resume right. I'm just a sales guy. And I said how would you like to be CEO of a new company making refugee housing and maybe potentially making injection moldable durable plastics? And he said sounds like an awful idea. We know nothing about plastics, but you know I was thinking about starting a business anyway. He was going to start a coffee roasting business and and I convinced him to give me his entire life savings and become CEO of applied bioplastics. So that was four and a half years ago. We recently switched. In the last year I became CEO, he became chief operating officer, just worked a little bit better because I'm the I'm the sales guy, right, I'm do all the pitching and all that kind of stuff. It generally people want to be talking to the CEO when they're being pitched at. So yeah, that's, that's how we got into it. And one last thought on that and I'll let you ask another question, because I've been monologuing for 20 minutes We've been encouraged by a million people to stop making this stuff and I think the reason is that the injection moldable plastic, which I also have a sample of on my desk, is is a lot more profitable.

Alex Blum: 19:27

You know, the injection moldable plastic, it's a $680 billion market opportunity per year, right? So you know, I know a lot of founders are like if I can just achieve 1%, I've got a unicorn Silas. I need, I need 0.1% of the entire market to add a $7 billion a year business Like because we're an IP company, we don't actually do our own manufacturing. Our multiple is 10. So $70 billion is what our company would be worth if we get 0.1% of the market. So, generally, investors are really excited to hear about that, but they don't want to hear about the housing. Right, and that's the thing that gets me out of bed in the morning is, yes, the other plastics really cool? Yes, it's going to shift an entire industry. Yes, it's going to make me rich beyond my wildest dreams, as well as all of my investors. But I like putting roofs over heads, you know that's that's the most gratifying part of my job every day. So that's how we started Applied Bioplastics. Please proceed with the rest of your questions.

Silas Mahner: 20:25

Hey, there are you building a climate tech business and looking for very specialized talent? Consider reaching out to our sponsors, next Wave Partners. Next Wave are experts in talent acquisition, recruitment and retention across the climate tech, renewables and ESG spaces globally. So if your team is growing or you're looking to make a career change yourself, feel free to reach out to Next Wave at next-wavepartnerscom or reach out to one of their consultants directly via their LinkedIn page. Yeah, I've got some other ones here. I think that the most important thing to touch on, which I don't think you mentioned yet, which is and this is, I think, a very important point to go over, which is why why housing? Specifically, because I think you have some kind of insight as to why it's important to put houses, create housing for these people in these refugee camps.

Alex Blum: 21:08

Certainly, you know, at its most base level, it's about dignity, right, you know you don't feel like a human being in a tent. I mean sure, if you're going camping for the weekend or whatever, but you know, if you lived in a house which most refugees did, right and then you're putting a tent in a pen, it sort of feels like you're an animal. You know you don't get protection from the heat or the cold, you do for pests, like you cohabitate with rats. Right, it's awful, it's unconscionable, that we allow people around the world who we have the money, we have the resources to house these people. My technology is not the only one. It's just that the, you know, refugees are inconvenient. They've left the country that owes them a responsibility. Right Now they're in a different country that doesn't really owe them a responsibility other than the fact that they're human beings, and so you cannot build them houses in their host community, the one that's, you know, letting them live there for the time being, because, politically, those governments don't want to admit to their people that the refugees are going to be there for a long time. So you see, all these temporary solutions put in place because, oh, of course, they're going home, you know anytime now, right? I'm sure whatever genocide is going to, that's going to end and they'll be able to go home. Please, citizens, don't vote me out of power because I've decided to keep these refugees here. Right? So they have to pretend like they have to have this veil saying, oh no, no, they'll be leaving in a year or two, right?

Alex Blum: 22:41

The average length of time that a human being spends in a refugee camp is 15 years. 15 years, so these temporary solutions don't work. But if you build them a house, they lose their refugee status. Right, so you can't build them a permanent structure. You can't use I mean, they do use, but you can't really morally use those tents. That's not right. So what do you have? And for us, what we have is something that allows the veil to be in place because, as being a bioplastic and being something that really only lasts for 70 or 80 years, it's technically a temporary material. So the government can have that veil saying, oh yeah, of course they're going to leave, we're just building them some temporary shelters. But on the other end of things, it's actually functional for 70 years, right? So it also disassembles and flat packs, right, so once it disassembles and flat packs, you can keep it for next time, right? Or keep it for another disaster or something like that. So we enable the governments to approve of a more dignified house that doesn't put these people at as much risk and we'll talk about the risks here in a minute but it allows for people to have dignity while governments can tell the necessary lies to themselves and their own people that these refugees may not be here for very long, right.

Alex Blum: 24:06

So, talking about the risks, so disease, right? I mean, if you look at the tents that most refugees live in, they're typically some form of treated bamboo or wood to prevent bugs or other things like eating it too quickly or something like that, and then plastic sheeting that is stretched over that wooden frame. Right, a determined human being can get through that material in seconds. A determined pest, like rat, can get through that again in seconds or minutes. Bugs can get through the holes and cracks in between the tent, like material, and attack the humans inside.

Alex Blum: 24:47

So disease runs rampant through these refugee camps. I mean, in the last five years, all aid workers were evacuated from the Rohingya refugee camp during the COVID crisis. Right, so they lost all of their help, briefly, because there was no way to stop the spread of COVID within the refugee camp. Right, cholera, malaria, you know, diarrheal diseases, I mean there's this whole list of these diseases that, like you know, in any other situation would be curable, preventable, treatable, that sort of thing, but in the refugee camp they're not right. So the only thing that you can really focus on, that's economical, is prevention, right.

Alex Blum: 25:31

So prevention, how do you prevent these things? Well, you can't physically distance from people. Obviously, you've got two million people shoved into a tiny little refugee camp. So that's not gonna work. You know, you can't keep disease from getting into the camp. That's not possible. We can't even do that with normal. You know villages and cities and stuff like that. So what can you do? What you can do is give them a house that has like sealed borders and a door, right, so if they're not sick and others around them are, they can go behind that door. Close that door, lock that door, keep people out. Right, if they are sick, they can go inside and be sick inside, not around other people. Right, so they can socially distance by being away from others.

Alex Blum: 26:15

It keeps pests and rats out. I mean, our stuff is much harder than and it's not appetizing to a rat either. So I don't see any reason why a rat would try to chew through it, but regardless the rats won't be able to get in and of course those spread disease. And then, because we seal the seams with a naval sealant, you know, the smaller pests, the bugs, can't have a much harder time getting it. Now let's talk about another different kind of pest.

Alex Blum: 26:41

So there's a very high incidence of home invasion, rape and theft in refugee camps, primarily because most traditional refugee structures shelters do not come with doors. So you might have I mean, I don't have to describe why that's a bad thing, but you know ours come with doors that lock and the proof is in the pudding. You know the ICDDRB, the NGO that we're working with in Bangladesh, as well as the IOM and several other, you know important refugee organizations, did a study recently on our housing over the last two years and they found that the incidence of disease went down by 80% over two years. 80%, which is amazing. I mean, I was so proud to hear that I thought it would have some effect, but I didn't think 80% and the other thing that I wasn't expecting, simply because I didn't know that they were measuring it. But they did measure home invasion, rape and theft and found that there was a 100% drop over two years in people in my structures, and so that that's why housing right is. You can make a huge difference to people, and it's not soft-hearted, you know, bleeding heart liberal sort of thing here. Like this is about real people and it's about what these people could do right If they get out of this situation.

Alex Blum: 28:07

Another thing that goes into that that we believe we can help with is we're working on something. We're working on patenting something right now. Essentially, it's a paint. It's a paint that is made out of a compound that is often found in beach sand called titanium oxide. It's also used for piled coating, so it's quite safe, and essentially, what we figured out to do is make that photovoltaic. So it's a low efficiency solar cell that we've made with beach sand paint, so it's really cheap, just like everything else we make, and it generates power and with some integrated wiring into the composite and a capacitor inside the house, you can build a rudimentary lighting system for the interior of these houses without making them too much more expensive.

Alex Blum: 28:59

Now, why would you do such a thing, right? This is you know you're. Now you're giving them luxury, right? Well, no, there's, there's a functional. Sorry, I do my little Jim Carrey bit sometimes with my eyebrows, but anyways, you know, the reason you want to give light at night is not just for safety. I mean, there's obvious safety benefits to having light at night. But look, these people aren't going home. That's the reality. They won't be able to.

Alex Blum: 29:26

It's very unlikely that that Myanmar will take the Rohingya back. In many cases for refugees, that's always the truth, right, like you know, they're not going to go back. They have to make a life elsewhere. So how do you go about making a life elsewhere? Well, first and foremost, it's really God dang helpful if you speak the language of the country that you're moving to, right.

Alex Blum: 29:47

But when do you have time to do that? Because when you're in a refugee camp, you don't. You don't really have a whole lot of time during the day. You've got too many things to do. You've got to stand in line for food, you've got to stand in line for water, you've got to stand in line for a shower, if those are available. You have to go to classes if you're a kid, right. So there's, there's not a whole like. You got stuff to do. You don't have time right To study, and you know, at least not while it's light out, but you do have time at night, and if you've ever been in a refugee camp, you know how dark those places get Like. Like you can see every star in the sky, which would be nice If you weren't terrified of everybody else around you that you cannot see, because you cannot see your hand in front of your face, much less other people. So not only safety, but the ability to study the language of your, your destination country yeah, that's what that does?

Silas Mahner: 30:34

I mean just generally speaking. It doesn't even have to be language study right, just something right. Because how are you supposed to prepare to make a better life somewhere else if you can't? If you can't study anything right? Books are super powerful. I didn't mean to cut you off too much. I do want to get into technology as well, but I think, just broadly speaking, this is really fascinating to me and I think it's really interesting what you guys are doing.

Silas Mahner: 30:56

I want to talk about the business side now. So let's try to do how walk us through the process from having the technology it sounds as though, if I'm not mistaken, the technology was basically figured out by the time you came across it. There was just not a use case that was specifically set for it. So talk us through from when you kind of stumbled upon this through to commercialization. How did that process work? What are the big kind of milestones there and where is it now? Because it sounds as if I get this correctly, it sounds as though there's almost two different business units right One that's going to help with the housing and then something that's going to be a little bit more commercially viable to fund the endeavor.

Alex Blum: 31:32

So I know it's a big question, but let's go through that, yeah absolutely, and let's make sure that we get to the business model, because that's really important. So the housing technology was complete when I found it. So the process of commercializing that has been simple but lengthy. So convincing an NGO to enable us to install structures, to create a pilot, that happened about two years ago after about two years of work, and now that we've done a two year study on it and proven that it's successful and superior to solutions being used today, we were invited to speak at the United Nations about now 27 nations are interested in adopting it and we're working through that right. So primarily, we're working with, like the Islamic Development Bank, we're hoping to work with BRAC, we're hoping to work with the IOM. Getting those organizations' attention has been a long process, but we feel like we're there. We've just received an order for 10,000 new homes in Bangladesh and we are discussing with several partners about helping rebuild the housing in Pakistan from the recent flooding, as well as rebuilding housing in Turkey and Syria because of the recent earthquake. We're also working with a number of Caribbean nations and some of their NGOs to try to install at least facilities for creating this. Now this is going to get into the business model, so let's talk about facilities for creating both in a second.

Alex Blum: 33:07

So let's go over to BioFi. Biofi is the name of the injection moldable plastic. Betterboard, bttr board is the name of the housing material. So biofiber right, that was not at all commercialized. We had to invent that from scratch. For the most part right, like the idea of mixing plant cellulose with plastic was done. But the question was how do you port that over to the chemistry of polypropylene, polyethylene? So I'm not nearly technical enough to tell you about this. I hired people to do that. My job here is kind of spirit leader, raw raw spirit leader, fundraiser, competition doer and pitch man. But I'm sure your listeners probably don't care about the chemistry. But essentially what we managed to do was make it so that, despite the heat of the processing machines of plastic, that the cellulose will not burn in those machines, because that's one of the biggest problems with natural fiber composites is that the material burns. So we managed to make cellulose more heat resistant. We managed to make it bond better than any company's been able to do so far, using the basis of Dr Kahn's formula on the housing solution, and lastly ended up with, you know, like an injection moldable compositor, a technology that would enable that. So with that, let me hop into the business model, because I think that's really important.

Alex Blum: 34:34

So we have a philosophy in applied bioplastics, and essentially it's based on the failures of the other 35 bioplastics companies that have all gone out of business in the last 20 years. They tell themselves three lies, and thus we do the opposite of those three lies, and that's why we will be successful. So the first lie is this one people will pay more for my plastic because it's better. No, sorry, that's not going to happen. It's a commodities market, and if you don't have a commodity that's at least competitive on price, you don't have a business. So many founders and unfortunately for me, trying to raise money from these exact same investors. For those investors, this has ended in tragedy over and over and over is the pricing strategy is fine, they'll buy it because they want to be green? No, no, they won't Not. If you want to make a material difference to the world, look, yes, you can go build a water bottle out of like orphan, like recycled orphans tears, if you want, and there will be people who buy that $800 water bottle, but there's going to be like 10 of them, right? So the minute your, your solution and this is true across all markets, not just mine the minute your solution costs even a single cent more than what's on the market today, you're cutting 6 billion people out of your, your, your customer base.

Alex Blum: 35:57

Most people on earth do not make choices about what they buy. They buy what's available. They buy what's cheapest because they have to, right. So you know, going and shaming India and China over their carbon emissions is insane. They don't. The most of the people who live there don't actually have a choice as to what they buy. So what you need to do is you make. You need to make a product that is less expensive than what they're making today, right? Second thing people will rip and replace their plastic processing equipment If I show them a better plastic, Come on guys.

Alex Blum: 36:35

Hey, this is, this is the one that really, like you know, boils my eggs, because it's, it's.

Alex Blum: 36:41

There's half a trillion dollars of Plastic processing equipment in the world, half a trillion dollars of plastic processing. You, if you think people are going to rip and replace that, I have a bridge in New Jersey that I have. You know, I have some partial ownership I need to sell right. Like seriously, it's, it's insane. Like you, you know, I actually had an investor have this revelation in front of me. It was really funny. So this guy I won't name names because this was really embarrassing for him, I'm sure had turned me down. He said he said, well, your plastics really cool, but you know it still uses some plastic in your plastic and I don't like that. I want to see something that's completely new material. And I was like, okay, it was really nice to meet you, but like, seriously, keep dreaming. You know it needs to be based on today's plastic because people aren't going to change their processing equipment. He's like I think that you've just you've got a little bit of a too limited of an imagination for me, so I think I'm gonna pass on this deal. And I said, okay, that's fine, I'll see you later I see him after at. This is gonna be a little identifying, so be really careful.

Alex Blum: 37:44

Here at Green Town labs in Houston he's getting off a bus with a number of other investors who've just visited one of Shell's plastic producing plants and he walks up to me. He says the scales have been lifted from my eyes. Essentially, I just realized how expensive that equipment I was telling you needed to be replaced was. And I was like I know, and do you realize how much of there is in the world? And he's just like I didn't until now, but I get it. And I was like, thank you, like, would you like to invest? He's like now I still get a. He's like clearly I don't know enough about this space to be investing in it, so I'm gonna pass on all plastic deals from now on and and so anyways, that's the point. Nobody is gonna rip and replace their equipment for you.

Alex Blum: 38:26

And the last one is this and this is the worst one. I hate to see this happen is I can outscale the market if I just raise enough money. No, no, you can't. Some of the largest companies on earth are in this space. In fact, nearly all of the largest companies on earth are in this space. You're not gonna outscale them. You have to partner with them. There's look, I know that some you know sustainability entrepreneurs don't want to get their hands dirty by working with oil companies and things like that. And, trust me, I'm about as far left as it gets in America, right Like I'm a. I'm a Marxist as far as that the personal politics goes. But I talk with the big bads. I have to, because if you want to change the world, you have to change the people who are making the world bad in the first place. So what you need as a result of those rules is a product that's cheaper than the market, a product that works in the existing processing equipment and the ability to license that, that idea, that IP, to the people who own that equipment. Because if you try to scale it yourself, you'll never make a difference.

Alex Blum: 39:34

So what applied bioplastics does? This is our business model. We invent IP. We have multiple grades of polypropylene today. We have some recycled grades, some virgin grades, we have some using wood fibers, some using agricultural waste and we're working on some using invasive species. But that's a tiny, tiny subset of the entire plastics market. So what our growth looks like over the next few years. We're setting up some rapid prototyping facilities now Hiring staff to fill those out, and what we're going to do with that is we're going to create thousands of grades of plastic across polypropylene, polyethylene, pvc, abs, 3d printing stuff like it. You know the entire world of durable plastics. We're going to address it by creating grades and we're not going to produce those grades ourselves. We're going to license them. We're going to license them to companies that are already making those grades of plastic. Just hey, a new version that includes your, your cellulose fiber. So that's the business model there's. We licensed to them the IP.

Alex Blum: 40:36

Today, we help them find the agricultural waste. Tomorrow or down the line, what we'll be doing is we'll be licensing the valorization process to large industrial farmers. What does that mean? Valorization is saying you've got trash, let's turn it into something valuable. Generally, agricultural waste is unwanted material. It takes some processing, some drying, some grinding, some treating. We can teach them how to do that right. And why would they do that? Well, they make more money right. Instead of letting this trash just rot in a field or I don't know, in some cases they burn it, for energy is very inefficient, very dirty, not a good idea. We can teach them how to actually make money, right, make more money on the stuff that you farm, by selling not only the stuff that you meant to farm but also the stocks and the peels and the other stuff that you wouldn't normally use, and then sell that to us. And we sell that to our licensees on the other side, who are the plastic Compounders.

Alex Blum: 41:33

Those are the people who make plastic useful. So for your listeners, just real quick, the plastics value chain. You got to say shell, a big oil company. They're making, you know, fuels for the most part, right, and Plastic is a byproduct of that. That raw plastic never gets used, nobody uses it. It then goes to a compounder, that raw plastic, who, the compounder, mixes it with things Plasticizers, elasticizers, colorants, dies, uv stabilizers, fire apartments, whatever you want, right? Just to make the plastic useful. For the next step, right. So now they've got pellets with all those things in it, including the plastic. Then it goes to the injection molder who makes a part, right. That part then goes to the fabricator. They put all the parts together. That goes to the brand manufacturer. They package it, label it and sell it. Right.

Alex Blum: 42:18

So where we go in, where our model goes, is we attack the compounder. We say, hey, while you're putting all that useful stuff in there, why don't you put some cellulose in there? It's gonna save you some money and it's gonna reduce the carbon. It's gonna reduce the micro plastics at end of life. They say, I don't know, is the injection molder gonna like it? We have to go down to the injection molder and say, hey, would you like cheaper plastic? They're like sure, yeah, that sounds great. And then we got to go to the brand manufacturer like, hey, would you like to be able to tell your customers you're greener than your competitors? Like, yeah, let's do it. So that's the chain right there. So we play with pretty much everybody in.

Silas Mahner: 42:49

That's kind of interesting. I want to just ask you look cook on that like why is it that you have to be the person going through to those three people, like Are they not talking to each other? Because there's three components you mentioned the first people, the second and the third and because there's a barrier in the middle. Are they just not aware of the end users Goals?

Alex Blum: 43:07

you know it's funny. I mean I don't know when you're gonna publish this, but I am. I'm currently dialing like my old days in in, you know, in sales, because we've successfully done a trial with injection molders for some very large luggage luggage companies. I, you know, you can leave it to your imagination, but some very large luggage companies, their injection molders happy with it, their compounders happy with it, those, those, those Suitcase companies have no idea we're doing this. And now the injection molders telling us I don't know, can we buy it without their permission? And I'm just like I mean it's your business, you tell me. And they're like I don't know. And it's like okay.

Silas Mahner: 43:49

What if I?

Alex Blum: 43:50

Interesting. What if I call the luggage company and have them give you an approval? They're like, oh yeah, that'd be great, we'll definitely buy it then. So now we're doing a call in LinkedIn campaign at these companies saying, hey, we've worked with your suppliers to improve your processes and save you money, but we need your approval to move forward, right? So there is a big wall there. And what's funny that you ask, silas, is we started? I wasted 18 months Prospecting into brands. I called them and I was just like want to adopt my plastic? And they say that's great, yes, let's absolutely do that. We get all the way down to procurement and procurements like we don't buy plastic. Like what are you talking about? We buy parts. Like well, who buys plastic? I don't know. We buy parts. That's the whole interaction. And so we wasted a year and a half on like dozens of brands who are now fans of ours, right, like you know, one day they'd love to adopt our plastic once we've talked to their injection molder. Convince their injection molder, convince their plastic compound.

Silas Mahner: 44:53

So I guess one question I have is if that's the case, then are the big brands putting pressure? I don't know when it comes to like, because a lot of these I'm not mistaken, a lot of these Used cases are going to be, you know, maybe big brands, but maybe, in terms of their specific product, do they have enough sway power to tell their procurement people listen, we need greener products. Because a lot of the big like, like Walmart's of the world, are Saying, hey, we need, we need greener products and these sustainable products. Is that not the case here?

Alex Blum: 45:22

It's a bunch of blah, blah, blah. They the all the public climate commitments. They're making the oh yeah, we'll be net zero in 20 years. You won't work here in 20 years. You're making it someone else's problem, you know, for the most part, nobody talks about materials getting greener. They're talking about fuels getting greener, power consumption getting green, greener, sources of power getting greener all important things. Reduction of packaging really big deal. Right, all of those things are important, but the plastics that they use contribute about 10% of all global emissions, right, and, and it's gonna grow to 20% by 2050, right? So by the time we get to these, oh, we're totally net zero. Yeah, you are, but your suppliers aren't, right. So that's the issue. Right, there is, is that?

Alex Blum: 46:10

And the problem is that big public brands like, like Walmart yes, they get a ton of pressure from the shareholding public. They want greener, right, but Walmart doesn't have control over the vast majority of the products that go into their stores, right, they don't. They don't say what goes into it. The manufacturer, in China often, or India often, is the one who decides what goes into those products, right, so they don't. They don't have the ability to change that, as much as they may want to. It's not their role, it's not their place in the supply chain.

Alex Blum: 46:42

So, unfortunately for me, I have to go to businesses that you've never heard of, and the reason that's a problem is because, because no one's ever heard of them, nobody's pressuring them to get greener. So even if you had a plastic that was greener, they wouldn't adopt it. It also has to be cheaper. It also has to make them more competitive, and that's what I was saying earlier about those three rules is like you got to understand the intricacies of this industry, to understand how to sell into it, but, more importantly, you got to know who actually has more Motivation to buy something that's greener. And the brands have the motivation but not the ability. Right, and the ones who need to have them, and do have the ability, don't have the motivation. So you have to, yeah this is.

Silas Mahner: 47:24

I really think this is quite profound, because All you ever hear about is the brands. Right, the thing, the end consumer where people buy from and I guess you think about it Walmart isn't really. Obviously they have their own brands, I believe, like Value or Svalu Brands or something like that. Great value yeah, they manufacture those, but broadly speaking they're a distributor right.

Alex Blum: 47:46

They don't. They don't Manu that even great value. Even their in-house label is done by a third party, likely in China, who does it to their spec. They say I want a trash can that looks like this, and the Chinese company or the Indian company says, yes, sir, I'll make you a trash can that looks like that, and then you can package it and label it as great value. However, the person who's buying the plastic for that great value brand thing is in the company in China or India, not within Walmart.

Silas Mahner: 48:16

And it's not as if it's just a single. They're not just creating just for Walmart, they're a white label production company, so they have many customers. Okay, yes, so even in that case, yeah, yeah.

Alex Blum: 48:28

Even the injection molder, who works for Walmart, also works for Sam's Club, also works for Costco, also works for HB, also works for, you know, like anybody who has a? Brand and needs an injection molder. There's hundreds or thousands of these companies across India and China for the most part, who make the same object for like hundreds of brands you know what I mean.

Silas Mahner: 48:50

So like, yeah, that is a good point, but my point was saying, like, even though we view these as the brands, the brand in this case specifically we're talking about, Walmart, is actually just a distributor, right, and they can.

Silas Mahner: 49:03

Only that you can't. You can't just tell everybody that you sell their stuff like how they have to run their business, because that would be absurd. You don't know how to run their business, like all those things, right. So it's really to me this is very profound, because I think that, despite having talked to a lot of people on the show, I don't think anybody has talked about the necessity to go directly to the people behind the veils, right on where it's happening. So this is really, really cool. So I guess maybe you've talked about it a little bit, but I just want to ask you to double click on that slightly and give your advice to other companies trying to help decarbonize materials or things that fall into this category of. You know the, the, the biggest companies. You've never heard of type of of categories. So can you talk a little bit more about that?

Alex Blum: 49:45

Certainly, certainly, gosh. It's hard, you know, unless you speak Hindi or Mandarin, it's really hard, right, and I keep picking on China and India, but that's where the majority of this injection molding gets done. Same thing with rotomolding, same thing with a number of other different types of plastic technologies. Right, so you know, obviously I'm grounded in the plastic world here, but this is going to be true for the vast majority of businesses is that they're not vertically integrated. They're not vertically integrated in others, but it's rare, super rare Companies have discovered over the last century or so the vertical integration.

Alex Blum: 50:24

While it was the most efficient way to do business like, think big oil, think big steel back in the day, it's no longer. Because of the globalization of commerce, you know, shifting responsibility to people who can do things less expensively than you can is the most profitable way to do business. Now, do I agree with that? Obviously not. Is that the way that the economy works? Yes, so you know you have to get to the companies that you don't know, and you know they're very hard to find. Right, like, again, unless you speak Hindi or Mandarin, it's hard to look these places up, much less do research into them and bang the phones trying to try to get their attention. So, you know, in my view and now thankfully this is less expensive, now we're working in emerging nations where wages are lower is going to save you money as an entrepreneur. You know all of our people are generously paid for their their a for their jobs and a in B for their nations. You know we have an amazing retention rate. We've had one voluntary resignation at applied bioplastics and zero layoffs in five years. So just point of pride. There we treat our people really well. But the point here is I have Hindi speakers and I have Mandarin speakers and I have Bangladesh speakers, so I can work in Bangladesh and India and China, because people know how to do the research there. They can do the reference work, they can do the other stuff.

Alex Blum: 51:48

So, as a founder, if you're a solo founder, you only speak English. You're trying to build a materials company Good luck. But also hire. Hire people, please, who speak the languages of these places, because you're not going to be able to make a difference, otherwise you can call the brands all you want. You will spend your wheels, you will spend time, you will spend their money and you will lose your reputation, because the thing is when you get there to procurement.

Alex Blum: 52:14

You've done all the things. You've talked to the VP of sustainability. Maybe you're really ballsy and you called the CEO and you build a relationship with him Good job. But they can't do anything with what you've you've, you've told them. So now you've wasted their time. Now are they ever going to talk to you again? Maybe, maybe not.

Alex Blum: 52:30

So don't burn your bridges early. That's I saw on the list of questions you sent me. What would you do differently? I wouldn't burn some of those bridges early by saying we can do this and you can too, because the thing is in these large companies they don't realize that they can't do that. Right, it's the guy in the little procurement office in the basement who realizes that they can't do that. The CEO is like hell, yeah, I can, but no, they can't. I have literally. So I'll give you another example.

Alex Blum: 52:56

I was talking to a guy who makes bidets perfect use case first, by the way, complete plastic body. You know needs to be cleanable, you know needs to be sanitary, cool, got it. I get on the phone with the CEO. He's raving about it. He's like this is amazing. I'm totally going to do this. I'm so excited and glad you called calls his injection molder in China. The injection molder tells him to fuck off and find a new injection if he's going to make him do this. And so he calls me angry because I ruined the relationship with his injection molder. You know, I didn't mean for you to do that. And he said well, you didn't tell me that this was a brand new material that might break his machine. And I said well, I did tell you that, but neither here nor there, and sorry for screwing up your supply chain, right.

Silas Mahner: 53:37

Yeah, it's a big thing that this is the. This is the other thing I was going to bring up, but you mentioned to people, if they're going to try to do something like this, to hire people in other other countries that understand the language but also the culture is completely different, right? Especially if you're talking about people from the US, like you have to realize that the way business is done and places is completely different, right? So you need to understand and have people who know how to sell there and you know how to build relationships or know the speed to take things right.

Alex Blum: 54:06

Absolutely. One thought on that, by the way, is like India, you know, the business traditions are very similar to America, just maybe 30 years ago. So like they're just like a little behind on how you go about doing business. So if you want to make a sale to an Indian firm, you need to go have coffee with the CEO in his office. Anything less than that and you're disrespecting him. If you've sent him an email and haven't offered to visit, you're rude. If you've given him a phone call, for Christ's sake, that does not include an invitation to coffee. Wow, you just burned that bridge right like that. It's over. You're not going to do business with that company and if you don't know that ahead of time, you're going to ruin these relationships. And again, that's why you're absolutely spot on the money. It's not just language knowledge, it's cultural knowledge that you need to work in these places.

Silas Mahner: 54:56

For anybody who is not familiar, there's a really good book called the culture map. I recommend people read if they're trying to sell into other places super, super impactful. All right, we're running out of time, but let me see where I want to go here.

Alex Blum: 55:08

I think probably just regulatory, because I have like an hour long rant we can.

Silas Mahner: 55:15

I don't want to get that one. One thing I want to ask really briefly would be if this so you talked about, I think you mentioned 10% of emissions are from plastics, if this plastic alternative was used kind of very, very broadly, what could the impact be to reduce global emissions?

Alex Blum: 55:34

It would bring it down to about 1.5% If all plastic was using my tech today, instead of 10% of global emissions. Okay, so we're talking about millions of tons of CO2 avoided.

Silas Mahner: 55:47

Yeah, so that's. I think that's again really important. I definitely have to clip that because that is extremely important point. The other question I wanted to ask was you mentioned licensing the technology and I just maybe this is like a small point, but I was curious about this is if you're charging a licensing fee, doesn't that technically add to their total cost, because before I'm assuming they already had the tech and they didn't pay for a license and they were just procuring raw materials, or is that incorrect?

Alex Blum: 56:12

No, that's incorrect, and so let me explain. So today, what they're doing is they're buying plastic. Plastic usually cost between $12 and $1800 a metric ton, depending on, you know, the time of year and whatever else like that, right? So that's the range, those 12 to 18. They're compounding it with their normal additives, which adds some cost, and then they're selling it to the injection molder.

Alex Blum: 56:33

What we're doing is saying remove up to 85% of that 12 to $1800 plastic and place it with treated agricultural fiber, which costs around $300 a metric ton, so that's about 75% less expensive. Then you have to add in the special technique and then we're going to charge you a license fee for that fiber that we're giving you. So instead of saying I'm going to audit you every month and see how much of my plastic you made, I'm just going to upcharge you on the agricultural fiber so that you can pay your license costs. That way, there's only one, one fee that you pay me. It's for the fiber, right, and it's still cheaper by a lot. So if you pay your license cost on top of that $300 metric ton fiber, it's still cheaper than that, that $1200 metric ton of plastic. Does that make more sense?

Silas Mahner: 57:23

Yeah, it makes a lot of sense and that that's also. I was curious because I was wondering like in a lot of cases I was wondering if the you know say, for example, farmers have this waste product that they have to. I'm assuming they didn't have to dispose of it some way, right? So it does usually probably cost them something. In this case it's actually going from a cost center to actually making money slightly on it, right?

Alex Blum: 57:44

That's it. That's exactly it. Yeah, so so the farmers make more money, you know, instead of losing money, honestly, they usually pay people to haul this stuff away or to chop it into a little tiny bits and then leave it on their property, and then it rots and creates methane, which is bad for the environment but cheaper for them, and turn it into a profit center for them. Take your trash, sell it to me, right?

Silas Mahner: 58:07

The incentives are all there and I really like this. And then one thing I wanted to make sure I we got to is so, essentially, there's two business models here, or sorry, two business units, essentially the housing and then this licensing business. How do you work those together, is it? Is it mainly, hey, we just have? We happen to have two likes? We have two business units essentially, and one is more kind of just impact oriented towards people. Obviously there's, you know, some environmental impact, but towards the people, and then we also have this licensing business. How do you separate that out? Is it just a certain percentage of profits that you're pouring into building houses like? How does that work?

Alex Blum: 58:42

Sure so. So firstly, better board is substantially better on the environment than plastic sheeting. By the way, carbon footprint print is 80 or 90% lower because it's mostly plant matter. So no, we're not trying to take over the entire building materials market with it. You know it's. It's got some limited utility, but a that is tuned towards the environment as well as people. The second thing is it's also a licensing play. We don't manufacture better board, we make samples of both. But that's it Right. We teach people how to make this for themselves.

Alex Blum: 59:17

The way that we meter the licensing for better board is there's a fluid that we make. It's our proprietary chemistry that enables the permanent bonding of the cellulose with the plastic right. We sell that, just like with the treated agricultural waste. We upcharge that with the license cost. We send that to NGOs, governments and private companies who want to make this housing material, and then we teach them the technique, much like we do for the compounders for the injection moldable plastic Right.

Alex Blum: 59:49

So again, we are sent. What we send is knowledge right, not physical property. We send my engineer to a plastic compounder to implement my new system of making their plastics right, and then they troubleshoot and they've got their cell phone number. So if the compounder ever has any issues, they call their engineer. The engineer helps them walk them through the problem. Same thing goes for the housing.

Alex Blum: 1:00:16

When a government, ngo or private entity who wants to make better board for refugees, for the, the poor, whoever it is that they want to make this for, says, hey, raise my hand, I'd like to make this stuff, I say great, have an engineer. I'm going to send you an engineer. I'm going to buy a plane ticket. He's going to go show you how to do this in places that get hit really frequently or need lots and lots of housing. What we do is we'll have our engineers train a team of trainers so that those people can pass the knowledge along right and create. Dozens of people make, or hundreds of people making these composites and assembling them into houses. So again, creating jobs. The the better board, by the way, is made by hand. I'll teach your viewers how to make it right.

Silas Mahner: 1:01:02

Yeah, I was going to ask this because I think it's important. It's a pertinent, important note.

Alex Blum: 1:01:06

So, firstly, you lay down a piece of corrugated tin. Second, you lay down a piece of mylar, plastic, mylar film. You lay down one piece of burlap, you spray it with the proprietary chemical, you paint it with resin, then you do that three more times, put one more layer of mylar on top and put one more piece of tin on top. That's the closed mold. Now you throw some bricks on top, you wait an hour and you've got a wall man, you're ready to go. You cracked that thing out and saw off the rough edges and install it Right. So it could be done faster with the heat press, but it would require fewer people doing the labor and the job.

Alex Blum: 1:01:43

The idea here is create as many jobs as possible. So it's working on a like a remote or, I'm sorry, a mobile printing station for this thing. So it's like an 18 wheeler. It's got a heat press inside it and it will. You know, if you feed in thermoset resin, the proprietary chemicals and the, the cloth, it'll just like start poop out house, just like real fast, right? That's the idea. We want to be able to bring those to disaster areas. But other than that, one or two vehicles that we will have for ourselves, it will be a community effort to build housing for people who need. It is a way to create jobs and additional opportunities for weaving businesses, which are considered cottage industries by by the United Nations, and they're really trying to promote those as a way to create more equity and more jobs around the world. So this is a jobs program as well as a housing program, and it's all done through licensing.

Silas Mahner: 1:02:40

I think it's really fascinating. I love how it's done that way. I think there's probably even other use cases where there's, you know, you don't even necessarily have to be doing this for refugees I I was thinking about I just was back from. This will come out later, but I just got back from Uganda, as I mentioned before the show. I think there's probably some people who would be better off to use some of these materials and in in their homes right that they build and you've got at least very small, small homes. But I think I mean there's a lot of things I want to go through.

Alex Blum: 1:03:11

I've got extra time. I'm done for the day.

Silas Mahner: 1:03:12

Yeah, we can go a little bit over, but the one particular question I am curious about is the supply chain of these kind of waste materials. How have you tried to figure this out, because I'm assuming these I think I got the wrong with the compactors that is that the right? Is that the right word? They compounders, the compounders. They probably don't have an existing like list of all these, all these farms that want to sell this stuff. It's like, how have you solved that problem for them? I'm assuming you had to get involved and help them up.

Alex Blum: 1:03:42

Absolutely. Yeah, yeah, so that's part of the licensing packages will source the treated agricultural fiber, right. So so we, it's turnkey. You adopt the technology, we get you what you need. You know our chemicals, our techniques and the basic fiber that you, that you need to be able to use. That's why, by the way, today we do it sort of piecemeal because we don't have a lot of customers.

Alex Blum: 1:04:03

Yet, you know, we go to the provider of the agricultural waste. We say we need this much. They say cool, that's not anywhere near the amount I completely produce. So here you go, I'll just sell it to you Eventually, once we get these very large customers using our stuff which we're really close to, by the way, we think we're gonna be post recurring revenue in the next 30 to 60 days, which is really exciting after four and a half years of work and just raising money and telling investors Please give me some money. Eventually will be profitable. We're about to be, so, thank God.

Alex Blum: 1:04:33

Anyhow, you know that's the point of licensing the other side. Once the, the Capacity goes up on on the customer side, the capacity must go up on the agricultural waste side. So, essentially, instead of saying to the guy hey, I need a little bit of your agricultural waste, I'll treat it myself. Hey, I need all of your agricultural waste. Can I, you know, to teach you how to make that valuable, and I'll pay you even more money for that. And then, when you're done with it, I'll buy your entire stock every season, right?

Alex Blum: 1:05:02

So if you know making that side of the business a lot more efficient by saying I will take it all, give it to me and then you know, I can easily measure capacity, because industrial farmers, at this point they're no exactly like nearly down to the ounce how much yield they're gonna get of each field. So it becomes really easy for my business to predict and then transfer right? Yeah, you know, eventually one day I think we'll probably have like warehouses. You know that, that. You know, if there's like an offseason or something like that, we'll gather some stuff. Yeah, you know, and just to make sure that all of our customers have enough agricultural waste. But gosh, we're nowhere near there.

Silas Mahner: 1:05:41

I mean that'd be a good problem to have right.

Alex Blum: 1:05:44

You know, just to be clear and I get this question a lot is is like well, what if you run out of cellulose? Is I try really hard, not, not to my guy, people who asked me that, and like my guy, the planet Creates over a trillion metric tons of cellulose a year. A trillion metric tons like.

Silas Mahner: 1:06:06

What is most of it being that? What's what's happening with most of it.

Alex Blum: 1:06:09

I mean just normal study like it gets. It gets, it goes through the normal plant cycle, it grows and, you know, brings in CO2 and releases oxygen and dies. It releases methane, that you know. It seeds itself, but you know all that kind of stuff.

Alex Blum: 1:06:21

So like and then we're not even talking about industrial farming yet, right? And so, like, not like, not like, we're gonna strip nature Cellulose to make plastics first. Not, point is but, but there's not a trillion tons of plastic sold every year, right, yeah, we're no like there's an order of magnitude or more Difference between the amount of cellulose produced by the earth and the amount of plastic goods consumed by the earth. Yeah, it's not close. So, thank we're not.

Silas Mahner: 1:06:47

It's also interesting to think that obviously there's kind of practicality things around local supply chains. But you could consider I don't know where most of these plastic manufacturers are globally, but Actually that'd be a good question when are a lot of like plastic producers globally? You said you talked about India and China, is that?

Alex Blum: 1:07:07

We're a lot of it. There's Antwerp, there's Houston, and those are the big hotspots is China, india, antwerp, houston. But you know, obviously Saudis make a lot of oil, which means they make a lot of plastic, so there's there's some in the Middle East as well. But the thing is, man like people are like, oh well, how are you gonna get agricultural waste to the plastic centers? It's like, generally people are in the plastic centers, right, people need food, so food makes agricultural waste. So there's there's always.

Alex Blum: 1:07:38

There's always waste near people and there's always people near plastic, exactly so we do try to keep our supply chains really short, like Country short, because the thing is you start shipping low value agricultural waste long distances, not only have you betrayed your value proposition on the climate, but also you're losing money. You know you're shipping the Saudis halfway across the world. That's a terrible idea.

Silas Mahner: 1:08:00

Yeah, well, I mean the reason I was, yeah, the reason I was asking. So I was wondering if there are places that don't have the Manufacturing currently but they do have the waste and they could significantly benefit from selling it right. It's difficult because it goes against the idea of keeping the supply chain short, but I would be curious to see, you know, maybe there's some, some companies that decide, hey, as part of our you know, yes, you goals, we're gonna try to build factories in those places. Yes, maybe, maybe it's slightly, slightly less convenient, but it can make a really big impact on the local people or whatnot.

Alex Blum: 1:08:30

You're totally right. You know, we, we have a rule we're not gonna go any further than across the Bay of Bengal, right, we're not gonna cross the Pacific or the Atlantic with like untreated cultural, agricultural waste. That's a terrible idea, right, bay of Bengal, like that whole area in South China Sea, all that kind of stuff, that's fine. So we can take stuff from Thailand, indonesia, bring it to China, bring it to India. But I agree with you, I really wish some of those plastic producers would create infrastructure in Areas like like Thailand, indonesia and I know that there's a few like I think Chimea is doing it, maybe Sumitomo chemical, but more, more need to do it, because there's a ton of us over there.

Alex Blum: 1:09:14

That that feeds the world, by the way, but, you know, also pollutes those countries Because they're not, you know, they're not disposing of it fully. So if we, yeah, it would be a huge impact not only economically, not only, you know, environmentally, but but it would be a huge social help to the people over there. They, you know, they deserve those jobs, just like we do. So, you know, let's, let's put some factories over there.

Silas Mahner: 1:09:39

Yeah, I know, I think there's there's so many interesting problems that kind of you can see through here, but like it's so cool because it's just the problems are or the, I guess you'd say problem the dilemmas that rise are always from something good happening Right. So I think it's really fascinating. I am quite fascinated by this entire endeavor and I'm really glad to hear that you guys are seeing a lot of success recently. Hopefully it continues right, that's huge, huge news. By the way, I remember we talked right before you went to the UN, so that was it's cool to see that that went well. Any, I guess we'll just kind of close things up with any advice that you have to other entrepreneurs, whether it is in this specific space or you know other climate tech entrepreneurs in general and you know, again, things that you would do differently, or just just broadly speaking, what would your advice be to others?

Alex Blum: 1:10:26

Don't be afraid to walk into the fire, and I'll explain what I mean by that. You know I was in Tel Aviv when we got hit by the largest rocket attack in a decade, about a Month ago. There's 800 rockets in 24 hours. After that, I went to Poland to set up a rapid prototyping facility in a business entity and I decided to pop into Ukraine To see what was going on and experienced an air raid there.

Alex Blum: 1:10:56

You know, these things are not me just trying to demonstrate the size of the bulge in my pants. I'm trying to talk about If you don't risk things and I understand that starting a business itself is a risk but if you don't risk things and you don't go where others aren't willing to go like talking to the big oil companies, like walking into a war zone, like doing business in China and Indian, places that you don't understand You're gonna lose. So it's a big risk to do business in China and India, and I think it's a big risk to do business in China and India and places that you don't understand. So you've got to be willing to walk through the fire in order to be successful and in order to make a difference, because the reality is look if you want to do some feel-good technology some and I hate to crap all over an entire industry but if you want to do sustainable fintech, I could not give a crap. But you know, if you want to go make a real difference to real people For the most part those people who need a difference made are not here in the West right, you need to be comfortable going to dangerous places, to different places, because they're not really all that dangerous, right, they just seem dangerous because they're unfamiliar.

Alex Blum: 1:12:00

So if there's any you know room in your budget to travel, to go make things happen in other countries, that's where you need to do it. Look, employees are gonna be cheaper. You know you can. You can treat them even better. Like you, you can either underpay one American or you could overpay several Indian people. It works right, like. Like you can make people happy and you can make a real difference. If you're willing to go overseas, if you're willing to put yourself in uncomfortable places, if you're willing to literally be under artillery fire, any of those things, I would say go for it, do it. I hope that this advice doesn't get anyone killed.

Silas Mahner: 1:12:34

I think this is a quite interesting point at something I guess I haven't thought about too much. But again, mentioning again my trip to Uganda recently. It's the first experience I had. I had been to Indonesia before. It didn't really affect me the same way as my trip to Uganda did, because I now have relatives there and I just think that it's.

Silas Mahner: 1:12:52

It's really fascinating to think about the idea that we can build these good companies and yes, there's a lot of challenges and things to to building a company in general, especially when it comes to talent, and you can add an entire level of complexity by going to a completely new culture and understanding how they do things, or getting them to try to learn how you do things. I think that's also an issue most of the time. But also, there was so much. There are so many problems there and so many like so much opportunity to help other people substantially.

Silas Mahner: 1:13:20

Yes, maybe you know, maybe what you're selling things for are not going to be as much, or sometimes you're you know there's probably gonna be profit, no matter what. I'm assuming if you're, if you're building a good business, but the impact that you can make on someone else's life is going to be is massive right and it's also from what I experienced. There are a lot of bad examples there Doing, you know, doing industrial endeavors, but still paying people shit and, you know, not taking care of them. And we need people to go in and to demonstrate with a good heart that this is actually how things should be and we shouldn't be treating Mystery people. So I'm willing to get sued for this.

Alex Blum: 1:13:54

You know, I saw the Marlboro factory, I saw the interior the Marlboro factory, While I was in Bangladesh, and there were children working with large machinery. You know, and and and you go through Bangladesh and you see the real world, and and you go through Bangladesh and you see the results of American capitalism. You know, manifest you, you see, you know people scooting around on scooters because they've lost their legs to an industrial accident, people begging for for arms with, with one limb right, one remaining limb Because of industrial accidents. Who is it that's putting those industrial machines there? It's Americans, you know, as British people, right and and that's wrong.

Alex Blum: 1:14:36

And so I'm not saying go to the third world and exploit people, and not saying go to developing nations and underpay people and make them desperate Because you've got all the money and they don't. You know, as I said, you know that sometimes businesses and developing nations can be a revolving door because of those conditions, that those working conditions we have zero turnover except for one employee in five years, because of the working conditions that we've created. By the way, our burn rate with 20 employees has been under about $80,000 a month for the entirety of the time we've been in business, and with 20 employees. That is how you can do it Right, like, like you know, of course I obviously don't pay myself very much, but what founder gets paid a bunch of money, right.

Silas Mahner: 1:15:24

What early some. But the wrong ones get paid a lot of money.

Alex Blum: 1:15:27

The one Exactly, exactly, right. So I mean, there have been months where I went without salary, but has has I ever asked a single employee to do that? Of course. Right Now am I the most highly paid employee? Yes, but I'm the CEO, right, and so it falls to me. So when the company's doing poorly, I take the pay cut, not them.

Silas Mahner: 1:15:49

Right.

Alex Blum: 1:15:50

Yeah, and that's why we have high retention, despite working in emerging nations. So you're absolutely right. Is that, you know? Not that they need examples, but we Americans need to set the example of healthy capitalism and other like. If you're going to insist upon capitalism as an economic system, then you at least need to make it compassionate capitalism, right? So don't be paying people, you know, two cents a day. I saw somebody bragging on LinkedIn the other day about this. Yeah, I could pay these guys in Malaysia like 13 cents a day and they're happy. And I'm like are they? Have you ever talked to them about it? Yeah, and you're bragging about how much you're underpaying them on LinkedIn. And I couldn't be more sick, because that's the sort of thing when I, when I say I work in Indian Bangladesh, they were like, oh, you're one of those guys. I'm like, no, I'm not.

Silas Mahner: 1:16:34

But like yeah, there is a, there's a big stigma on it. There's a lot of people who just assume right, they assume that that's how it's done. It's a. Yeah, I don't know.

Alex Blum: 1:16:42

I think it's a fair and safe assumption because Americans and British people have been abusive to those, those people in those other nations, for decades. Not just colonization, but post colonization. They're still economically, you know, colonized. Right, we, we colonize. Oh yeah, you can run your own country, sure, yeah, but we're gonna functionally enslave you in your own country by paying, by artificially depressing wages, you know, and so we think that's BS here at applied bioplastics.

Alex Blum: 1:17:13

You know, one thing that we tell every investor is look, you know, culture is really important to us. We've got this culture fundamentals Bible. There's like 44 like values within it that we expect our employees to live up to and ourselves to live up to you. But here's the thing we offer not only will give you the culture Bible, how about you pick anybody out of my org chart and I'll introduce you to them with no prep. Anybody. Ask them how I treat them, has them how the business treats them. Ask them how well they're paid. Ask them whether or not they have plans to leave. Right, it's important. I would challenge any business that does that does business in developing nations, in India, in China. I would challenge you to try the same thing. See how, see how that feels when you see eos out there. Call your call center guy down in India that you're like you know 10 cents an hour. Why don't you call him, see how he feels right and then fix it Right, like I don't?

Silas Mahner: 1:18:07

want to.

Alex Blum: 1:18:08

I don't want to be the leader. I think it's sad that the, a tiny, unfunded startup, is the leader in ensuring their there. You know, we're the first company in Bangladesh to offer dependent health insurance the insurance. People didn't even know what we were asking for. We said I want to ensure my employee, but I also want to ensure their family. And they're like oh, we don't sell that. I was like Well, I'm paying you in dollars, so can you sell that to me?

Silas Mahner: 1:18:32

Sure yeah, of course.

Alex Blum: 1:18:35

It sucks that we're first on that kind of stuff, sucks that we're best on that. I want to see. I want to see every American company do that. I want to see us. Look, if you're going to export labor, at least be fair about it.

Silas Mahner: 1:18:46

Yeah, no, I think it's good. I think there's a lot of things you could talk about, but I like where we've ended here. I really appreciate you coming on and hopefully we'll have to have you on again to talk more details about some of the other other items in the future. But any final thoughts you want to leave us with or where people can meet you?

Alex Blum: 1:19:03

Oh yeah, so you can find us at. I mean gosh, we're not very present on social media, but we do have a Twitter, a bio plastics. We're also, I think, on Instagram. I'll have to check. The easiest place to find us is is LinkedIn LinkedIncom slash applied bio plastics. My URL is Alex applied bio. You can also email me or email the company at hello at applied bio plasticscom, look. If you're a cellulosic biopolymer PhD and you're looking for a job, please reach out. If you're an investor, by God, please reach out. We are so undervalued right now. We're about to take off. It's your last chance to get a safe note from applied bio plastics. Like, by the time this airs you, you might have a month, so reach out to stylist.

Silas Mahner: 1:19:50

I'll tell the VCs. I'll tell the VCs right after we get off here. But alright, man, I appreciate this is. This is a great.