Forget Fan Mail, Fan Text Us! 💬
Jesse Henry is the CEO and Founder of Heartland Industries, a company that produces drop-in pellets made of hemp fiber.
These pellets are used as an additive to plastics. They reduce the weight and cost of the products, improve strength, and lower scope 3 emissions.
It's a quadruple-benefit product.
Today, Jesse tells us his story - how he started Heartland - how he's the 3rd generation to work in the fibers industry - how they landed BASF as a partner and investor - and he gives a lot of other insights. Including our favorite, how they produce huge volumes of pellets without owning a milling facility.
Enjoy today's conversation!
---
🌎 Want the full PodLetter? Go to our substack to see the written content that supplements the audio interview.
---
🌴 https://linktr.ee/cleantechies
📺 👀 Prefer to watch: subscribe on YouTube
🗣️ Take the Listeners Survey
📫 Get Written Summaries of Each Episode in Your Inbox
🌐 Join the CleanTechies Slack Channel
-----
Topics:
**2:15 Intro
**2:55 Jesse's Background & Heartland's Mission
**10:06 The Challenge of Developing Reliable Supply Chains
**13:33 From Powder to Pellets
**16:47 What it Means to be a ClimateTech Entrepreneur Today
**22:03 Partnering with Wood Pellet Mills for Scale and Cost Reduction
**28:34 Run Jesse's Playbook
**31:16 The Finance of Materials Companies
**34:00 The Power of CVCs
**41:10 Opportunities in B2B Marketplaces
**43:27 How to Pick the Right CVCs
**47:02 Next Steps for Heartland
**54:58 Process Technologies and Software Solutions
**56:11 Focusing Beyond Carbon
**57:46 Takeaway
**54:51 Using Infrastructure to Skip Building
**56:16 Reducing Risk with Each Fundraising Round
-----
Links:
**Jesse Henry
**Heartland Industries
**Follow CleanTechies on LinkedIn
**@Silas & @Somil_Agg on X
Every ClimateTech Entrepreneur needs a reliable partner for their legal needs. Why settle for less than the best? 💪🏽
Reach out to Goodwin Law today; the law firm of choice for hundreds of ClimateTech Entrepreneurs worldwide. They have you covered from funding docs to offtake contracts to IPO and M&A support. GoodwinLaw.com (and tell them CleanTechies sent you!)
Forget Fan Mail, Fan Text Us! 💬
Jesse Henry is the CEO and Founder of Heartland Industries, a company that produces drop-in pellets made of hemp fiber.
These pellets are used as an additive to plastics. They reduce the weight and cost of the products, improve strength, and lower scope 3 emissions.
It's a quadruple-benefit product.
Today, Jesse tells us his story - how he started Heartland - how he's the 3rd generation to work in the fibers industry - how they landed BASF as a partner and investor - and he gives a lot of other insights. Including our favorite, how they produce huge volumes of pellets without owning a milling facility.
Enjoy today's conversation!
---
🌎 Want the full PodLetter? Go to our substack to see the written content that supplements the audio interview.
---
🌴 https://linktr.ee/cleantechies
📺 👀 Prefer to watch: subscribe on YouTube
🗣️ Take the Listeners Survey
📫 Get Written Summaries of Each Episode in Your Inbox
🌐 Join the CleanTechies Slack Channel
-----
Topics:
**2:15 Intro
**2:55 Jesse's Background & Heartland's Mission
**10:06 The Challenge of Developing Reliable Supply Chains
**13:33 From Powder to Pellets
**16:47 What it Means to be a ClimateTech Entrepreneur Today
**22:03 Partnering with Wood Pellet Mills for Scale and Cost Reduction
**28:34 Run Jesse's Playbook
**31:16 The Finance of Materials Companies
**34:00 The Power of CVCs
**41:10 Opportunities in B2B Marketplaces
**43:27 How to Pick the Right CVCs
**47:02 Next Steps for Heartland
**54:58 Process Technologies and Software Solutions
**56:11 Focusing Beyond Carbon
**57:46 Takeaway
**54:51 Using Infrastructure to Skip Building
**56:16 Reducing Risk with Each Fundraising Round
-----
Links:
**Jesse Henry
**Heartland Industries
**Follow CleanTechies on LinkedIn
**@Silas & @Somil_Agg on X
Every ClimateTech Entrepreneur needs a reliable partner for their legal needs. Why settle for less than the best? 💪🏽
Reach out to Goodwin Law today; the law firm of choice for hundreds of ClimateTech Entrepreneurs worldwide. They have you covered from funding docs to offtake contracts to IPO and M&A support. GoodwinLaw.com (and tell them CleanTechies sent you!)
Somil (00:00)
All right, Jesse, welcome to the show. How are you?
Jesse Henry (00:04)
Thanks for having me guys. Doing well.
Somil (00:05)
We're super excited to have you today. You were in New York for the past couple of weeks and we got to see each other quite a bit. So that was a lot of fun.
Jesse Henry (00:12)
Yeah, you guys sharked me in some board games. That was nice and fun.
Silas Mähner (00:16)
Yeah, it's not often that we get to record a pod with somebody that we've gotten to know in detail beforehand. And also get to kick your ass at some board games. So that's nice.
Jesse Henry (00:26)
Yeah, for those of you who don't know, Silas over here has a family of more than half a dozen siblings. So this guy starts shuffling cards. I'm like, I got to just whip out my Venmo and just send him everything I own.
Somil (00:37)
Hahaha!
great. Well, let's not leave the audience to suspense. Jesse, who are you?
Jesse Henry (00:44)
My name is Jesse Henry. I'm CEO of Heartland, a materials company that manufactures natural fibers to reinforce plastic. So we replace fiberglass, talc, calcium carbonate to reduce the cost weight and carbon footprint of plastic products and packaging. So we work a lot in automotive, packaging, building materials applications with the main focus of reducing the CO2 of plastic without compromising price or performance.
Somil (01:07)
In the materials space, you've done something pretty incredible. You landed an investment from the world's largest chemical company. How did that happen?
Jesse Henry (01:16)
There's a lot of time and energy spent in that relationship. We're very fortunate, we partnered with BASF over the past 12, 18 months here and have worked on some commercial programs in the automotive sector. So we have a good amount of commercial pull through from the OEMs and the tier ones who injection mold component parts that use one of BASF's high performance resins.
Somil (01:39)
Why was automotive the beachhead? I'm curious. I wouldn't expect that to have been that way.
Jesse Henry (01:43)
So our beachhead is actually industrial packaging. So plastic pallets, totes, and bulk bins. Just so happens that a lot of the demand for industrial packaging is actually in the automotive sector. And so we started in industrial packaging because...
All the manufacturers we work with move widgets, all those widgets end up on pallets, and your pallets are actually calculated in your Scope 3 carbon emissions. So as we work on product development with each manufacturer, there's a path to decarbonize their Scope 3 through the returnable packaging that they use. Automotive has a lot of key drivers and kind of tailwinds that are leading the materials transition. One of the big ones is actually lightweighting.
When you reduce the weight of a vehicle, you increase its performance and reduce its carbon footprint. And there's a lot of companies who are trying to figure out how do I lightweight the materials that I use in my vehicle. So, 100 years ago, it was metals. And then we were able to start synthesizing plastics as a means to not only maintain low costs, but reduce the weight of the metal component parts. So now that everyone's using plastic component parts, there's a race and a battle to figure out who can create the lightest weight plastic material.
which is pretty difficult when you're using additives like fiberglass, talc, and calcium carbon.
Silas Mähner (02:54)
So would you say that in a lot of cases, the drive to use these products isn't necessarily the sustainability angle that's just kind of like a co -benefit to what they're looking to achieve?
Jesse Henry (03:06)
I'd say most people are looking for cost, weight, and performance benefits. And carbon footprint is really pretty secondary to the conversation. I think in the early days of Heartland, we used to lead with CO2. We do work in pretty conservative industries, right, guys? The chemical sector, the manufacturing sector, these are pretty conservative industries. So...
Silas Mähner (03:23)
Mm -hmm.
Jesse Henry (03:28)
You have to be careful about leading with CO2 as the main value proposition. I think what these people really care about is price and performance. So if you can meet price specs and performance specs, then all of a sudden CO2 is icing on the cake.
Silas Mähner (03:41)
Interesting. Yeah, I do find it fascinating to make sure you kind of go in this way because if you can understand their outcome and their motive, then you can get all these things working. So it's really interesting. I'll kind of pause here because I think a lot of people who push back on green materials and say, you know, that's never going to work. It's so much more expensive than the other things. But I think it's actually quite silly because you outlined it for us as well with cars, right? They started with steel. They moved to some lighter things, kind of injection molded plastic, and they're moving.
You just further down the invention curve, right? Yes, there's sustainability involved, which is obviously a good thing, but it's just a continued evolution, right? A lot of people who are more kind of from where I'm from, from the Midwest, they're more conservative and think, hey, why are we trying to change all these things? But the truth is we've already been changing these things. I just think it's just a continuation. Sustainability happens to be part of that as well, which is a good thing.
Jesse Henry (04:33)
Yeah, absolutely. And automotive is one of the big industries that moves a lot of plastics every year. So now there's this competition who can create the lightest weight and lowest carbon footprint plastic products. And fortunately, you know, there's a lot of incentive in the automotive sector to lead the material transition. And so people are always looking for alternatives to talc and fiberglass and calcium carbonate. And this is something we've done a really good job on in terms of SEO. So when you're looking for alternatives to fiberglass, you're looking for alternatives to talc, Heartland's articles pop up first.
Silas Mähner (05:02)
Mm -hmm.
Somil (05:02)
Let's take a step back for a second. So here today, we've kicked your ass at board games and you've landed the biggest chemical manufacturer in the world. But take it back four years ago and you're just thinking about starting a materials company or maybe you weren't even thinking about that. Where did the inspiration for Heartland come from and how has it led to where you are today?
Jesse Henry (05:23)
Yeah, so the Heartland story's a little different than the Founder story.
Right. Tim and I came together to work on supply chain technologies. We kind of stumbled into hemp through a sensor package that we were working with at the time that was used for explosive detection that we were commercializing for agriculture uses. So when we started Heartland, we wanted to start Heartland as a bioplastic company. We went to go sell bioplastic to the plastic industry and we fell on our face. So after a few dozen phone calls, I, you know, start calling up some of these plastic suppliers more from a place of curiosity, right? Like, what do you guys get that I don't?
And one of the key insights that I got was, Jesse, these are pre -existing relationships and supply chains that have been around for generations. You've got to figure out a way to align with these pre -existing relationships and supply chains instead of compete with them.
And that was really when Heartland pivoted from hemp -based bioplastics into hemp -based plastic additives. And that pivot is really what allowed us to hit price parity with today's commercial applications. If I zoom out a little bit into my background outside of what I've done in my career, my grandpa was actually in the fiberglass business distributing recycled fiberglass from Owens Corning, one of the large suppliers, to Boston Whaler, one of the big boating manufacturers. And his father before him was one of the first importers.
of natural fibers into the states from Europe and was actually part of the transition when we moved as a society in the 30s and 40s from natural fibers into synthetic fibers like rayon. So my family's been in the fiber business for generations and I'm happy to be crazy enough to think that natural fibers can be a sustainable reinforcement to plastics and have somehow showed the manufacturing and chemical sector that that's possible as well.
Somil (07:04)
Wow, what a story. That must come in handy in pitches. That's super cool.
Jesse Henry (07:08)
You know, I don't tell my personal background story as much as I should. I should lean into it more. Yeah, people are more curious about the Heartland story. I do every once in a while get, Jess, how'd you end up in this? Something's not adding up here. How did we get to this point in time? And sometimes my answer is a series of pivots, a series of failures, where I kind of zigged and zagged from one thing to the next. One thing that's been really interesting about the Heartland experience, guys, is...
Somil (07:12)
Really?
Jesse Henry (07:37)
My main role is on the demand side of the business. So I always have my finger on the pulse of demand in the manufacturing and chemical sector. Really hearing and listening to what problems the customer has and what solutions are in the market to help solve those problems today. There happens to be a big gap in the sustainable materials market. So you have all these manufacturers that have sustainability mandates over 2025 and 2030 that are going to require them to figure out how to find supply chains, reliable supply chains of carbon negative materials. And today,
Today in the chemicals industry, maybe 1%, maybe 2 % of chemical suppliers have reliable supply chains of carbon negative materials. So you have 100 % of manufacturers need what 1 % of chemical suppliers have. So to us, this is the multi -trillion dollar opportunity, is figuring out how to develop reliable supply chains of carbon negative materials that can hit both price and performance.
Silas Mähner (08:28)
I mean, that's a huge challenge, right? I think that's quite an interesting dynamic you have. What I want to understand is how did you actually get started? Like once you decided that you were going to go into this kind of like supplemental feedstock space, I guess you could call it, like how did you actually get started? Was this something that was born out of university experience? You got the chance to work in a lab. Like how did you get things going?
Jesse Henry (08:51)
So we got things going by pivoting into the plastic additive marketplace. We then started to take natural fiber in a powdered format and we started to send it out to brands and suppliers. So the first two companies that we got our materials in the hands of were Ford Motor Company and Rivago. Most people aren't familiar with Rivago. It's one of the world's largest recyclers, compounders, and distributors of plastic.
And what was really interesting guys is they both had the same feedback for us. And that feedback was this material sucks and we don't want any more of it. And so when you dive into the why, right? You start to ask more questions like why does this material suck? You start to really uncover the answers and the problems with natural fibers. Well, we have dust concerns.
flammability, moisture, bonding, bulk density, dispersion, thermal stability, agglomeration. So like they were having all these problems processing natural fibers. And really the conversation started because both Ford and Revago said the same thing to us. They said, we need crammers in order to load your natural fibers above a 10 % load rate. And that's really difficult, A, because we don't have crammers and B, because we need to replace resins that are filled with 20, 30 % reinforcement agent.
And so my business partner and I kind of went back to the drawing board and we said, Hey, we can't sell Kramers to the manufacturing sector. How do we densify the input format of the natural fiber? And this is really where the material innovation started, where we moved from a powdered natural fiber into a pelletized natural fiber. And that pelletized natural fiber that we produce today is treated with certain organic chemicals to help increase the thermal stability, the bonding and the performance.
Silas Mähner (10:31)
Okay, so real quick, what's a Kramer?
Jesse Henry (10:33)
A krammer is something that you use to feed in materials at 100 %
Silas Mähner (10:37)
Okay. Got it. I figured it might be that, but I just want to make sure. So broadly speaking, you were producing something and you just kind of changed the output. It's still essentially the same product, but just a different type of use case or output that they can then use more easily with their existing machinery.
Jesse Henry (10:54)
Right, so the whole game in the sustainable materials business is not only be a price parity and meet the performance spec, but you have to be what's called a drop in material, which means you can't require a bunch of retooling costs for the manufacturers. That just adds to the product development timelines. It elongates the sales cycle. It creates a lot of complications and also creates hesitancy for the manufacturer to change because it's not just the material change, it's the equipment and the process change.
Silas Mähner (11:20)
process change. So in retrospect, the big thing would have been first figure out what the kind of existing use, how they do things today, and then just figure out a way to reverse engineer the material so that you can make a drop in. Is that right?
Jesse Henry (11:33)
Yeah, and if I knew everything that I knew today four years ago, I would have started with pelletized natural fibers. It took us a little while to figure that out. We kind of stumbled into that material innovation through the feedback loop, right? And this happens in all areas of innovation and all areas of entrepreneurship. You need to create a feedback loop with your customers to understand what problems they're having and how you can optimize to solve those problems.
Silas Mähner (11:58)
Yeah. How did you end up, I guess, having an interest in being an entrepreneur in the first place? I know we're going even further back, but I want to understand this. What was the impetus? Were you always selling lemonade as a kid? It just was in your blood? How did you get started?
Jesse Henry (12:12)
I think as a kid, I, in theory, I always wanted to start a business. I also, and I know this isn't politically correct to say, I also didn't think I quote unquote had the balls to do it. I think there was a lot of fear there as a kid. I did in my early days in South Florida, there was a big, big hurricane. I think it was Hurricane Wilma back in 2005. Not to date myself too much. I was in eighth grade at the time.
And all the screen enclosures got ripped off all the homes and I was out of school for two weeks. So I went around town with a little red wagon and started to collect scrap metal from all my neighbors and offered to clean up their backyards for free. And I ended up collecting a few thousand pounds of scrap metal, sold that to a scrap yard at 25 cents a pound. And over a week as an eighth grade kid made over a thousand bucks just selling scrap metal to scrap yards with a free feedstock. So it turns out, you know, in hindsight, I was...
Silas Mähner (13:07)
Hell yeah.
Jesse Henry (13:08)
in the raw material supply chain when I was in eighth grade. I did, you know, when I went to college, I did study entrepreneurship and I really enjoyed that experience and learned a lot outside the classroom as I also started.
video production company and was involved in the entrepreneurial ecosystem. I will tell you that I learned exponentially more outside of the classroom than I did inside the classroom. And specifically over the last four years, I've learned many things that I wish I was taught inside the classroom.
Somil (13:40)
I think it's a story of a lot of great entrepreneurs which is they can't really get their hands on things that excite them and things that they can really focus on, but as soon as you get into a business and focus on a company, it unlocks that potential that your teachers didn't see, right? So it's so cool to hear that you have a similar experience.
Jesse Henry (13:55)
Yeah. And I think when people come to me and they're like, Hey, I want to start a company. Like, what should I be focused on? Really? One of my pieces of feedback is instead of trying to, you know, take a solution and bring it to market, figure out what type of problem you want to solve or what type of community you want to help. And if you can figure out what type of person you want to support or what type of problem you want to solve, then you can become really passionate about solving that problem or helping that.
community. And those are really key drivers when you go through the tough patches in entrepreneurship, where you can be grounded in the problem that you're solving or the community that you're supporting. So I always encourage people who are starting their entrepreneurial journey to ground themselves in the problem or the actual target demographic as opposed to the solution that they're trying to bring to market.
Somil (14:43)
Totally and actually let's go on that a little bit. How did you ground yourself? I mean you went through a lot of failure So was that the learning process or was there something else you did to go the extra mile?
Jesse Henry (14:55)
For me, I mean, my coping mechanism previously has been the gym. I did get into a pretty odd car accident a few months back, so I'm just finally starting to get back into it, which is good. It was weird to not have that coping mechanism for a few months there and kind of see where my mental and emotional state went over that period of time. But yeah, I'd say what's really grounded me is there's a big gap in the market. The world needs these solutions.
not just to hit 20, 25 or 2030 sustainability mandates or 2050 net zero targets. The world needs these solutions guys because as a society, we have driven ourselves to the lowest possible cost, right? We live in a capitalistic structure. The problem with that is because we've driven ourselves to the lowest possible cost, we've focused on the extraction of resources.
And if we continue to extract resources for an extended period of time, regardless of what side of the political aisle you sit on, if we extract too many resources over an extended period of time, we don't have any more resources left, number one. Number two is we create pollution and CO2 is a form of pollution, but there are hundreds of different pollutants that we create as a society through extraction. So we need to, as a society beyond energy, figure out.
how to regenerate the resources we utilize on a day -to -day basis. And we operate in a $5 trillion per year plus materials market. And so we need to figure out as a society, how do we regenerate the materials that we rely on every day? And right now there's not a lot of solutions out there outside of things like recycled feedstocks or using trees or other types of purpose -grown feedstocks like that that can be used in packaging.
Somil (16:42)
So now you've sort of entered the area of, okay, you know, this is a gargantuan problem and now you're part of the solution and you also integrated into the supply chain in sort of a non -intrusive, like, hey, don't get mad at me, I'm gonna help you, right, as an additive. Now you're an entrepreneur who's landed, you know, a major milestone in your industry. How, from where you started to now, has your vision of being, you know, a climate tech entrepreneur changed? What does it mean to you now that we face this giant problem moving forward?
Jesse Henry (17:11)
Man, the meaning of being a climate tech entrepreneur has definitely evolved over the years. I think years ago, people were very unfamiliar with sustainable materials. I think now that we're four years in, people are much more familiarized with the product because they're familiarized with large companies who are trying to solve and optimize for these types of problems. So years and years ago, it was, you know, I had a megaphone and I was speaking to crickets.
Now it seems like I'm speaking to rooms of people who are trying to figure out solutions to these problems and are looking at natural fibers as an opportunity to solve those problems. When we started, we really focused on hemp fiber as the main fiber that we were pelletizing to be used as a plastic additive. And now that we have our process technology patent, we're looking at expanding that platform into other natural fiber master batches and concentrates.
Somil (18:00)
Got it.
Silas Mähner (18:00)
Out of curiosity, how does this work when you say you're pelletizing natural hemp fibers? Can you just give a five -year -old version of how does this work so I can understand? Because I'm like, how do you get it from that to that?
Jesse Henry (18:12)
Absolutely. So our process technology can really simply be broken into three steps. We mill the natural fiber, so we reduce the particle size. We treat it with certain organic chemicals, and then we pelletize it.
That pelletized natural fiber product then goes to what's called a plastic compounder or an injection molder who mixes the natural fiber additives in with plastic. So our model is pretty simple actually. We take our process technology, we license our patent to wood pellet mills, and then wood pellet mills become our toll processors that manufacture our product for us.
Silas Mähner (18:47)
So the revenue is not in selling the pellets per se, it's in selling the technology of how to get those pellets into your existing other injection molders.
Jesse Henry (18:59)
So we're selling the pellets commercially, and we also license our technology so that wood pellet mills can create a natural fiber additive that can be used in the plastic market.
Silas Mähner (19:05)
Okay.
Okay, got it. Interesting. So there's two challenges. They have to build the supply chain of the actual products yourself, but also then, I guess not so much a challenge on the second part, but just able to license out the technology.
Jesse Henry (19:23)
Yeah, and this is a real advantage for Heartland. And I think we chatted about this at breakfast one morning. You know, most sustainable materials companies, they need to, you know, execute on a nine figure CapEx as a three year build out.
Heartland is very fortunate that our process technology can be plugged in to existing networks of wood pellet mills. And those wood pellet mills can make millions of pounds of natural fiber additives for both Heartland and for themselves. So we're offering the opportunity for the wood pellet mill, not only to fill downtime on their equipment, but for them to actually expand into new product categories. Cause most of the wood pellet mills today are focused on bioenergy. We're offering the opportunity to use our technology and expand.
into the Plastic Additive Marketplace.
Silas Mähner (20:08)
Interesting. So instead of, so make sure I got this correct. So instead of building your own plants, you can use existing plants that have the ability to produce this. So you've basically removed a section of the challenge of building a material supply chain company. You've removed a section because you're partnering with somebody else.
Jesse Henry (20:27)
Yes. And it took us years to figure this out. I wish that we woke up day number two and figured this out. It would have saved a lot of time, money, energy, you know, blood, sweat and tears. But yes, this is what's allowing us to scale to billions of pounds without having to build the physical infrastructure. Like we asked ourselves as a team, once we had our process patent, do we want to go raise capital to build a manufacturing facility or do we just want to license this to people who already know how to move hundreds of millions of pounds of natural fiber pellets per year?
Silas Mähner (20:58)
Interesting. This is really fascinating. I wonder, I don't think anybody else who's done something in the material space like this on the pot at least has brought this up. So this is an interesting angle for people to consider. Are those mills generally just interested in it because it's an extra revenue source? Why would they pay you for the license rather than just doing a rev share?
Jesse Henry (21:20)
So these people make very, very little money per pound. So they're selling wood pellets to Europe for 200 bucks a ton, 220 bucks a ton, right? They're selling a product at 10 to 11 cents a pound. So their margin on a 10 to 11 cent per pound product is pretty slim.
Depending on the pellet mill, like we're talking a penny give or take. So we're offering the opportunity to give them 10 times more profit per pound based on us, told, pelletizing the product with them. So we provide the input feedstock, we provide the chemicals, we pay them a certain amount of cents per pound.
They give us back the product that we then in turn sell to the market. Alternatively, they're going to be able to produce their own typically wood fiber master batches or wood fiber concentrates that can be used in the plastic compounding industry. Today, wood is typically used in a powdered format. We're offering them the opportunity to use it in a pelletized format so they can serve a new set of customers and fill more downtime on their equipment.
Silas Mähner (22:17)
Hmm.
Wow, this is honestly, I'm surprised we didn't uncover this in our breakfast. This is mind blowing, man. I really like this. I think it's something worth listening to or really digging into for other people listening in this space, right? Like you might not have to do the entire infrastructure building. I'm assuming at some point, if you could, you'd probably want to build out your own plants and things like that. But especially once you're getting started, why not help somebody else out who could use it and can revitalize their industry, but also it's helping you produce at a huge scale with
without having thousands of employees and a huge manufacturing facility of your own.
Jesse Henry (22:59)
Yeah. And I think for those entrepreneurs out there who might be thinking about starting a sustainable materials company, copy me. Do not, do not take four years to figure out what took me four years to figure out, right? Shorten the learning curve here. And the way to do that in whatever market you might be approaching is once you understand the chemistry that you're tackling, the problem that that chemistry solves and the process technology required to create that.
go out to the market and try to find either a toll processor or a contract manufacturer who has the capability to make that today with as little retooling cost as possible, right? So you want to target someone who already has, call it 70, 80, 90 % of the equipment required to create that chemical or that material, and then go create a partnership with that person as a means to prevent you from having to raise nine figures to build a facility that's going to take three years to build.
This is a very difficult thing to do. There's a graveyard of companies who have tried to do this. And kind of the hack to this is to find a partnership that you can develop where they can either toll process the material for you or become your contract manufacturer.
Silas Mähner (24:11)
One last thing I just want to ask is how did you find out that this was going to be a partnership? Did you just start randomly calling, like, okay, there's these things? How in the world did you actually figure that out in the first place?
Jesse Henry (24:23)
We actually had a customer, Toyota, tapped us and said, Hey, is there any way that we could find a toll processor for your master batch? And we kind of shoved them away at first and said, no, it's not possible. We're the first people to create a product like this. And they kind of pushed back a little bit. And we just started calling pellet mills and seeing if this was an option, right? These, these people make hardwood and softwood pellets that are burnt.
Silas Mähner (24:46)
Interesting.
Jesse Henry (24:53)
And so they're doing it at a really low cost and they're doing it at volumes, right? The small pellet mills do 50 to a hundred million pounds a year. The larger pellet mills might do 1 .5 billion pounds a year in wood pellets. So why am I going to go recreate the wheel? These people already do this at scale. They do it for the lowest possible cost. So either I'm going to partner with them.
or I'm going to go build out the same infrastructure that they already have in place and they already have downtime that can be utilized. And so it was really filling a gap in the market that no one else was trying to fill. We call these wood pellet mills and say, hey, we can offer an opportunity for you guys to make more money per pound and fill up downtime. Is that something you'd be interested in?
Somil (25:36)
And that's a win -win.
Jesse Henry (25:38)
So one -one. Exactly.
Somil (25:40)
That's super cool. I mean, I feel like you talked about people learning from you and I feel like this in and of itself is an entire playbook, right? Could be in the business in and of itself is making yourself available to be sort of the retrofit of these different materials. Maybe that's a different discussion, but that's fascinating. And I feel like something you can only learn once you realize that there's, I think the unique alpha here is the fact that you were able to establish that, hey, you can actually make this retrofit happen, right? And so you are breaking ground on that. And now that's something that you've gone through.
That's super cool. I mean, this is like, I feel like a playbook for at least 10 other companies. So, that's pretty exciting.
Jesse Henry (26:14)
Yeah, and.
Think about the simpler version of this playbook, right? You want to manufacture a material or chemical that uses a fermentation process. Well, there's massive companies out there that have fermentation equipment. It might not be a one -to -one match. Anheuser -Busch or AB Imbev, their process technology might be a bit different, right? But you can at least give them a call and see if that's something that they'd be open to. They have food contact equipment that uses certain enzymes and certain processes. So it might not...
be a fit, but you have absolutely nothing to lose by calling and trying. Fermentation is a very common process. We've all probably maybe had alcohol at some point in our life. So we're at least vaguely familiar with fermented food or, or, or, or, or, or drinks. But yeah, I think for the people trying to build sustainable materials companies, like it's really difficult because there's not a playbook.
Right, when Steve Jobs made the first smartphone, there was already a dozen smartphones that had been launched and failed. So he knew what to do and what not to do. There's not really a lot of success to replicate in the sustainable materials industry. So you have to be extremely scrappy.
And part of that is figuring out how do I shorten the learning curve and not make the same mistakes that my predecessors made. I'm by no means the expert in all things sustainable materials, right? I know a lot about natural fiber plastic additives and very little about everything else. But what I can say is that toll processors and contract manufacturers are looking for companies that can help fill downtime and increase margin.
Somil (27:49)
Yeah, and I, you know, to round out this point, I think even the idea that you can apply a playbook has been proven time and time again, right? One of our favorite podcasts as a podcast with Silas and I love the Founders podcast, right? Quick shout out to them. They, I should say he, the main host, talks about how you can essentially learn from history and repeat what they do because you can learn from their mistakes and they've kind of taken their companies to success. So.
Maybe you're one of those founders in the making. I think that might be what we have here. I'm gonna flip the script on you really quick. Why don't we talk about the other side of the equation, which is not only the operating, but the fundraising, right? You can't, especially in a space like this, you can't exist without some money coming in and helping you get to that first pilot, that first prototype of your material. So what was that fundraising journey like? And I feel like you probably learned a lot.
Jesse Henry (28:21)
for it.
Somil (28:43)
in terms of how do you communicate and sell. You already talked about switching from carbon to profit, essentially, but how did you evolve along that fundraising journey?
Jesse Henry (28:52)
Yeah, and we're still learning in real time. These are...
very tough industries to commercialize new products in that are pretty capital intensive, comparatively speaking to a software company that might be able to raise low six figures and build an MVP that has users that are paying and find product market fit a bit easier. In sustainable materials, there's a long product development timeline and a long sales cycle. So the whole game in this business is figuring out how do I shorten R &D timelines and shorten my sales cycles? How do I shorten my receivables and extend my pay?
It's a finance game. And if you look at the largest materials and chemical companies on the planet, most of them are actually run by finance people. They're not run by material scientists or mechanical engineers.
They're run by finance people because these multi -billion dollar organizations are floating billions of pounds of materials. They're floating billions of dollars of payables and receivables because they're large materials companies and that's what they have to do. So I learned from not only the other sustainable materials companies in the space, some of which you guys have interviewed. I also learned from the other big chemical companies in the space and I'm fortunate to have people like BASF in my corner.
who are constantly teaching Heartland how to evolve in this space. In terms of investors, most of the money that we brought in has been friends, family, angel investors. The BASF investment was the first kind of institutional capital that we brought in.
It can be very difficult to work with financial VCs because a lot of them don't understand materials and chemicals. And then corporate venture capitalists, a lot of them have business unit pull through requirements, which means when a CVC intros you into their company, they need a business unit to validate that these materials work, not just at a lab scale, but can work at a commercial scale at the right price point. That can take 12 months. So.
Typically a company 12 months later is fundamentally different than where it was when it started. So there's a short window where you can work with corporate venture capitalists. We happen to have hit that window with BASF, partially because we got introduced to them pretty early on in the company. And then also partially because we have good supply chain partnerships and have kind of the brand pull through for BASF to warrant the investment.
Somil (31:07)
So let's pull on both of those threads before we get too far along. So first thing fascinating about the right type of people, I know Silas probably enjoyed that, the right type of people to have in charge of these chemical companies. It just becomes a value of the capital worth of product that you're moving around. As someone who's like, I'm doing diligence right now, right, and my investing job, so this is something I'm gonna be on the lookout for. So this is some real time learning I'm doing. So appreciate you for that. I'm curious though, so.
For you as an operator, speaking to other operators that are listening right now, what do you think is the balance in terms of the talent? Is there a point at which you really felt like, especially you as a founder, like I'm going to bring in a finance -oriented professional or a C -suite, or has that been the case from the start for you?
Jesse Henry (31:54)
I've leaned on advisors mostly, so my, call it like advisory A team, are people in materials, chemicals, finance, a little bit in the automotive sector as well to help me navigate some of these longer sales cycles and product development timelines. I think every company can benefit from starting conversations with investors sooner rather than later.
You really want to be introduced to an investor six or 12 months before you plan on getting an investment from them and not expect to connect with an investor and get a wire transfer 45 or 60 days later. It's not, it can happen, but it's not a realistic assumption. So if you're a founder who is starting to do FP &A or you're like, you're starting to model out your finances and you're looking at what your use of funds is going to look like next year, you've got to kind of reverse engineer today and start optimizing for that.
So start making those introductions today or start asking your network for those intros. Start reaching out to these VCs, even if you're a little bit early, you can identify that these people want to get to know you. They want to understand the problem that you're solving, why you're solving it, how important it is so that when you're ready to bring that type of capital into the company, they've been familiarized with you for an extended period of time. They know you, they like you, they trust you and they're ready to move.
Somil (33:12)
And I think one thing I'll add to that is from our breakfast and board games, I remember one thing that really stood out was you had your eye on the prize, right? You kind of knew, maybe trial by fire, maybe through lots of failure, but you knew where you needed to go. And so I think the point that founders might balance with, okay, build relationships with your seed investors if you're a pre -seed, A, investors if you're a seed company, is the value for time, right? Like these people aren't gonna fund me.
How do I know that I should be building relationships with them? But the space that you're in, and I'd love to sort of correct me on this, but is it the fact that, we talked about this, there are not that many players in your space, right? Especially in terms of where do you want to get to on the corporate venture capital and the corporate capital side. So, did that make your job easier or frankly are people just making excuses for themselves?
Jesse Henry (34:01)
I think people make excuses. There's definitely a small subset of investors who invest in sustainable materials and series B, C, D, E. And that's really important to note because if you're raising a series B, you have to be aware that there's only a few dozen people who could even be a potential fit to invest in a series C. So you have to be aware of how much capital you're bringing into the company, what the cap table looks like, what your capital demands are to become profitable.
These are things that you need to be modeling out in advance. And if you're raising a series B, you're already doing this modeling. So I'm preaching to the choir here. But yeah, when you're in these earlier phases and you're in, you know, an angel round or a seed round, you could find benefit from reaching out to someone who invests in series A's and series B's and say, Hey, would love to get some perspective from you. I saw you invested in XYZ company. I've been following them for years. Would love to just get 30 minutes on your calendar to chat with you through what I'm doing, the problems that I'm focused on solving and get your feedback on a few things.
investors to love to give their insight and perspective. A lot of them think they happen to know a lot more than they actually do on specific topics, but it's really good to have those conversations in the early days and figure out like, what is the series A or series B investor looking for and how can I start optimizing for those outcomes?
and talk to them about some of the milestones that I'm looking on hitting on so that three, six, nine months down the road, I can go back to them and say, hey, remember that conversation that we had some months ago about these milestones? I just happened to knock them out and I'm starting to hit on these next milestones that you mentioned were super important for your Series A and Series B companies.
Somil (35:30)
Okay.
And one tip I'll throw in here is that actually I spoke on a panel speaking to a lot of international startups and one great advice that I heard was always reintroduce your company, right? You can't really assume that these people remember you. So I think that's one thing that I want to say is you brought up a great point, which I think, you know, once you're in this game for long enough, you know, always email with an update, right? But on top of that, don't assume that they remember who you are, right? They probably do, but it's, it's always good practice to just remind them. And also this is sort of like a,
maybe an inspiration from Steve Jobs or some of the greatest marketers is orient people around your vision and sell them on it. So that one liner can go a long way. I'm gonna take a bad segue here and speaking on talking to investors, I wanna round out the second point that you brought up a couple of minutes back now, corporate venture capital and how to best play that game. So you talked about the fact that there's a lot of lead time between when a corporate venture capital will work with you.
because of the need to interact with other parts of the major corporation. So, I don't know, do you think the problem stops there? Like that's just the name of the game? Or there's certain things that you learned that helped you along the way?
Jesse Henry (36:45)
Yeah. And we're still learning just in full transparency guys. Like I definitely don't know everything about the CBC world. I can tell you there, there are some people in the CBC world who are not good actors, I'll broadly put, and who are really using startups as a vehicle to do research and development that they should be doing in -house. And it's an easy way to collect information on a product category that you might be interested in tackling long -term.
And so look, CVCs are in a really interesting position today. Some of them are investing off the balance sheet. Some of them aren't. Some of them have huge boards that they need to respond to with investment committees. They need a lot of diligence and some of them don't. So there's good ones and bad ones. Not all CVCs are created equal.
A lot of them do need business unit pull through. Some of them don't. I would say for entrepreneurs out there in the room listening to this, it can be really difficult to rely on CBCs for bringing capital into your company. But one way to really leverage CBCs.
is to use them as a means to break into target accounts. So if you're having a hard time breaking into your top target account, just go to their CVC arm and their CVC arm will introduce the business unit because they're sitting there saying, hey, if this person wants capital from me, this business unit needs to check off on it. And it can actually be a great business development tool to get into that business unit via the CVC because that business unit will always answer the CVC's email.
Somil (38:15)
Wow, that's brilliant. Yeah, and I think that furthers the point of relationship building, right? Just let them know who you are, get known multiple ways, and then make sure that they know that they need what you have. That's clear, that's cool, man. You gotta get on some boards with some of these companies, some of these startups. You could provide them a lot of value.
Jesse Henry (38:31)
We're getting there. We're getting there. And guys, I'm always learning every single day. Yesterday, I was at BASF hosted a sustainability lab event. There was 100, 150, 200 people in the room. People that I wouldn't have expected to be there, not just internal stakeholders like their CEO, but external stakeholders like customers and even foreign dignitaries. I happened to sit next to a guy from Google X during lunch.
And I got to pick this guy's brain and what an interesting person to have lunch with. And I was asking them how they validate at each phase of product development, what they should pursue and what they should pursue. And this conversation is not about Google X. I'll quickly wrap this up. But what he was saying is they don't have any things that they specifically need. They have kill switches and kill buttons, and they kind of think through it in three phases. The first being technical risk, the second being scale risk, and the third being economic risk.
And so in each phase of their product development, they're looking to peel back a layer of risk. And I think this is something that we chatted about in one of our conversations over the past few weeks, is that every round of capital that an entrepreneur is focused on raising, they should be focused on a use of funds that peels back certain layers of risk. I found it really interesting that Google X focuses on technical risk first and scale up risk second, which makes sense.
But every entrepreneur that's out there looking to raise capital in the coming years, start to think through not just what that capital will do in terms of your scale and your ability to grow the company, but what risks you'll be able to remove from the company as a byproduct of raising that capital.
Silas Mähner (40:11)
Yeah, so I want to go backwards a little bit, but just to try to maybe like try to summarize what you just said I think is important is as you're raising money for your venture, make sure that you recognize that each raise is effectively, you must reduce a certain level of risk each time if you want to raise the successive fundraising. So just as I kind of put a period on that. I wanted to go back. You said that not all CVCs are created equally. What in your mind are the...
kind of green flags or things that to you say, this is probably a good part.
Jesse Henry (40:45)
Yeah, clear communication and clear expectations. So I always say that relationships falter for one of two reasons. It's either communication gaps or expectation gaps. Obviously expectation gaps are created from communication gaps. So you can really boil communication down to the least common denominator or root cause. I think that's super important because a good CVC will tell you exactly what they need from you.
and what their process and their timelines look like. The bad CVCs will be very opaque with timelines, they'll be very opaque about what they need or their business unit needs, they'll be very opaque about expectations, and they'll just kind of string you along without really telling you.
or drawing a clear line in the sand on what's going to be required in order to get investment or not. So I won't throw out any specific names of companies. You know, even the CDCs who I think are bad CDCs, they're doing the best they can with what they got. They're in large established companies that have high footprints. They're trying to figure out how to reduce those footprints or use their waste materials in certain ways.
Sometimes their hands are a bit tied, so it's not always the individual's fault. Sometimes it's the system and the structure that they're in. But a good CBC will be really clear on timelines, on expectations, what they're looking for from you, and really what they're targeting in a portfolio company. I'd say one thing that you want to be really careful of is CBCs who require business unit pull through, because as your company evolves, there's a chance that you'll pivot away from that business unit.
And if your investment from them is predicated on business unit pull -through and all of a sudden you need to pivot 12 months later.
then all of a sudden you're forced to decide, do I pivot into what I know the market needs or do I stay on track because this business unit needs my material in order to get the CBC's investment? There are certain CBCs who don't require that business unit pull through and those are the real CBCs that are valuable because they have an interest in a financial return and in an increased valuation as opposed to a business unit pull through.
Somil (42:51)
How do you navigate that? Like, I don't know if you've had to, I mean, maybe, you know, without naming the bad actors, maybe you've gone through some of these experiences, but how do you navigate that?
Jesse Henry (42:58)
I mean, I navigated it today with a really great company that, you know, they have a set process over 45, 60 days to do due diligence. You know, we've had a few calls with them. They've gone through our data room. They're asking really clear questions that are really important to the business model. They're thinking through what the growth strategy looks like and how that might be able to fit in. But there's not this need for the business unit to accept what we're doing or to like what we're doing or to need what we're doing in order for them to invest. And so.
The reason why they're such a good CVC is the leaders at the CVC worked at CVCs that did things the wrong way and have learned from those mistakes. So a lot of times you'll find people in industry who have spent 10, 20 years doing things the wrong way. They're finally at a company that's giving them the lateral.
and ability to do things the right way. And they're able to integrate the lessons that they've learned to, you know, execute on a strategy of a CVC who can do things the right way. I think CVCs are extremely powerful tools for corporations to both increase enterprise value and drive innovations that could take decades and do that in years.
Silas Mähner (44:05)
Yeah, that makes a lot of sense. Okay, we're getting close to the end here. So what are the, I guess, core things that you look for in the next six to 12 months? What are you excited most about for the future? What are the next steps that you're going to be taking?
Jesse Henry (44:19)
The next steps for Heartland are really evolving into a feedstock agnostic model where we're buying feedstocks off the market. We're sending that through a network of toll pelletizers and really evolving Heartland into a large sales and distribution company for carbon negative plastic additives. That's what we're evolving into. It's taken us some time to get there.
But that's really going to be our focus over the next six to 12 months. For me, one of the things that I'm really excited about is getting on more stages every year. I'm doing it a little bit better. Yesterday. I was really excited about the presentation I was able to give to BASF and the people that they invited out for the event. And so I'm looking forward to today. I'm on a podcast. I'm looking forward to getting on more stages and getting a little more creative with my presentations and how I'm communicating what we're doing. As you guys know, like.
Somil (44:59)
Today you're on a podcast.
Jesse Henry (45:11)
these pitch decks evolve, these narratives evolve. You guys mentioned on this podcast, always reintroduce yourself. It's so true because we're on version, you know, 10 ,000 of our deck. And so, you know, I think for me getting this new narrative out into the world, maybe evolving our website a little bit and getting on stages and getting in rooms with people who are unfamiliar with our materials and showing them how our materials can actually make a positive impact on their supply chain.
Silas Mähner (45:39)
Yeah. Okay, here's one. I've never asked anybody this question on the show yet, so it's going to be a new one. But I think given that we have some context of yourself, I want to ask you this. You spent many years now building Heartland and kind of the alternative in another world is you go work for somebody else and you spend a lot of time, I don't know, as a management consultant or something, right? I don't know what the alternative would have been. But when you kind of compare working for somebody else to learn some of these things, like say your same intention was to build a company,
to go work for somebody else, learn from them and do certain things versus going and building yourself, yes, stumbling a few times, making a few mistakes. Can you just give your perspective on that and what do you find? Do you think that this is the most valuable thing you could have done with those years or do you recommend for other people who might be at the very beginning of this journey to do something else?
Jesse Henry (46:28)
Yeah, I think if I was 18, 20, 22 years old, I'd say go work for a large company, learn how it's done right, learn how it's done wrong, learn how scale looks, learn how innovation is stifled, and then go and solve those problems by building a company yourself. You know, as someone who's been in business for 10 years or so, like I've seen a lot of the ways things are done wrong. I was very unfamiliar with the chemical sector when I started this. I don't have a background in material science, so a lot of this was, you know, the
school hard knocks, I had to learn these things before chat GPT just kind of spit out the answers. Now there's, you know, there's tools and resources where you can go online and look up, you know, the fastest path from biomass to XYZ chemical, and it'll give you the pathway. And so I think today there's a lot more tools and resources available.
I wouldn't have been able to be a consultant on sustainable materials four years ago when I started. Today I could be, but I had to earn that experience and earn that ability. I couldn't have just woken up one day and started consulting or advising in the space.
As a byproduct of starting a company like this, you meet other companies in the space that are solving interesting problems with interesting solutions. And I think that's part of what excites me about this industry is that there's so many cool people working on cool solutions. And it, you know, the material transition takes a village. You can't, you can't just use material to make this happen. I think we actually spoke about this in weeks past. Like it takes a village. It takes hundreds of materials. Heartland has a material, but I've been.
Silas Mähner (47:50)
Mm -hmm.
Jesse Henry (48:00)
able to come across so many other, you know, both bio -based solutions and recycled feedstocks, process technologies, softwares. I mean, there's so many cool innovations out there.
And so, you know, for, for people out there that are thinking like, Hey, should I go work at a company first or go, you know, start a company first? You got to look at the position that you're at in life. You know, I think I could have learned a lot by working at a large chemical company for a year or two, and then evolving into the sustainable materials sector. I don't think Heartland would look the same for better or for worse if, if it had happened like that. and I'm, I'm grateful for the experience that I've had, even though it's been a roller coaster ride over four years.
because, you know, regardless of Harland, I've learned so much over the past few years. My value is 10 million X what it was four years ago. So the ROI on my understanding of the materials and the chemical sector and the manufacturing sector, that ROI will pay in dividends for decades to come.
Silas Mähner (49:02)
Yeah. I think that just one thing, I know you mentioned maybe to go work for somebody else for a few years, but based on all the things you've said, I would push back. It sounds as though despite there being risk, perceived risk for doing these things and even potential failure, you end up actually having substantially more value to you as an individual by doing the company route because you meet all those companies. Maybe as a consultant, you meet those companies, but...
Somil (49:02)
Use.
Silas Mähner (49:30)
But do you have the same relationship with them? Do they have the same respect for you for doing the thing, for being in the arena? So I just came across this kind of concept recently and people tried to break my brain about it. And I've been thinking about it. I think your journey is a really good example of that. You could have spent those six or seven years doing something else. I don't think you would be nearly as valuable as an individual. So I just want to encourage people listening that if you're debating this, kind of reassess what you actually.
understand as risk and realize that there's huge value to going and trying regardless.
Jesse Henry (50:03)
huge value and also like the education that you get along the way is really what's going to make you more valuable on a human level.
And there's also indirect pathways to get there. So you don't have to either go work at a, you know, a petrochemical company or start a sustainable materials company. There are other, as I mentioned, process technologies, consultants, softwares, like there's ways to tangentially get involved. And again, I would reground it back and like, what's the problem that I want to solve or who's the community that I want to support and go find a business who's already supporting that so that you can start to make those relationships now so that if you are going to.
and go and start your own thing, you already are set up with the right relationships at the forefront to kick things off.
Somil (50:46)
That's, yeah, you said a lot of really, really cool things and honestly, we would continue for hours if we could. But we're coming up towards the end, so I'm gonna hit you with one last question. One of the things that really was so much fun about when we talk is you have so many ideas buzzing around in your head from the things you've learned, like you said, 100 million extra value. So I'm gonna ask you to, I'm gonna expose you a little bit, give us like one or two of the things that are really exciting to you, ideas that you have about.
you know building in the climate space, what can people try and build?
Jesse Henry (51:16)
That's a loaded question. I'm going to try to talk about it without giving away all my, my, my ideas. I think there's a big opportunity in, in B2B marketplaces. I think building the Amazon of X or the Amazon of Y or the Amazon of Z is going to be a big opportunity because those, the technical risk of those business models has been eliminated because there's drag and drop platforms to build out B2B marketplaces today. So it's no longer about the technical.
risk or the economic risk. It's about your ability to get product market fit and show both suppliers and buyers that your platform can add value to their lives. So I think there's a lot of opportunity in the B2B and B2C marketplace space, specifically e -commerce marketplaces. I think process technologies are ripe for disruption.
a lot of companies that are approaching lower CO2 solutions. There's really kind of three ways you can look at it. You need a feedstock, you need a process, and you need some type of energy. Tons of geniuses focus on energy problems. Feedstocks will either typically be a recycled feedstock, a petrochemical -based feedstock, like a hydrocarbon or a biomass feedstock, but process technologies are this blue ocean of opportunity.
Broadly speaking, if you can use a process technology or innovate a process technology that either uses less energy due to less steps or lower temperatures or lower pressures, you're going to be able to win out long term because that's going to be a process technology that integrates lower CO2 solutions in a world that's requiring.
lower CO2 solution. So I think process technologies are super exciting. I think softwares are super exciting. I think there's a massive opportunity in the agriculture sector to disrupt some of the things happening with fertilizers and seeds and things with drones and multispectral cameras from outer space and soil carbon testing. There's so many exciting things happening in the agriculture sector as well. So, you know, there's no shortage of opportunity in these marketplaces. And...
I would encourage people that are looking at climate tech as a possible path forward in their lives to not just focus on CO2. I'm building out a speech right now called Bigger Than Carbon. And one of the things that I think is going to become increasingly important in the coming years is...
is extrapolating the externalities beyond CO2 that your solution helps optimize for. When I say that, I'll use a really broad scope example. You extract things from planet Earth. There's hundreds of pollutants, one of which is CO2. But like, what about mercury or arsenic or lead? Do people want those types of things in their layer, land, air, you know, water? No, they don't. Of course they don't. And so I think there's a really big opportunity for startups in the climate tech space to not reduce
the problem down to CO2, start looking at other externalities that are impacted by this problem and solution, and start to speak to some of those solutions in your value proposition and in your problem statement so that you're showing people how you're creating solutions that are bigger than carbon.
Silas Mähner (54:26)
I like it man. Well this has been a pleasure as always. Thanks for coming on man. Where can people reach you and where can people follow?
Jesse Henry (54:32)
You can find me on LinkedIn, just search Jesse Henry, J -E -S -S -E -H -E -N -R -Y, or you can check us out on the internet, www .heartland .io.
Silas Mähner (54:43)
This has been pleasure. I can't wait to see you again and kick your ass in some some board games again
Jesse Henry (54:48)
Thanks guys.
Somil (54:49)
All right, see ya.
Silas Mähner (54:52)
All right, everybody. Welcome to the takeaway section of the episode. Thanks for listening this far. If you have listened this far and you are not already a subscriber, please do because you made it to the end. So you must like us. All right. We've got three core things that really excited us today about our conversation with Jesse. There's two pieces of advice and one thing that's kind of more on the stylistic side of what Jesse did. So the first one that really stood out to us was his advice of using the infrastructure of other companies or or
organizations to skip building out your own. So for example, they didn't do this initially, but they learned later on that they could partner with sawmills, people who are milling different things as a contractor, essentially, kind of like a contract manufacturer, but slightly different, to produce the goods that they had come up with through their process. In this way, they didn't have to go raise a whole bunch of money to build out a factory, which would then take three years to do.
to get moving, they were able to get started right away, which is why they're able to produce so much at a very small size as a startup. So they learn that through their partner actually, but his advice is don't take forever to learn this. Learn this right away so you can get going faster. I think there's going to be many, many green materials, sustainable materials companies that can learn from this. So hopefully you're listening and hopefully you're one of them. Take that away and put it in your hat.
So the second piece of advice was ensuring that with every fundraising round, your objective is to peel back one layer of risk every raise so that the next raise comes, you've reduced the risk by one factor and you're able to go and raise that next round. A lot of people misunderstand this. They try to eat the entire elephant. They try to do everything at once, but really the best corporate VCs, they have a framework. He referenced Google. They have a framework for looking at what is
What is a risk we have to de -risk each round before we decide we're going to give it more money? If it doesn't achieve that, it's basically a kill switch. So remember that that's what you're doing every time you go out and raise. You're not trying to do everything. You're not trying to become Amazon overnight. You're trying to achieve that kind of de -risking so that you can get to the next stage and stay alive. And then this kind of third point is more about his style and transparency of things. So...
A lot of founders come on. They give a lot of advice. They give some pointers. They might even talk about a playbook, but they leave it up to the audience to connect the dots. And the thing that really stood out to us is that he actually connected the dots for us. He was very transparent and just kind of give a straight up answer as to how he did things so that everybody listening can do it themselves. So, Jesse, Henry, great guest. I really liked this episode. I'm probably going to re -listen to it a few times. I hope other people like it. Share it with your friends.
And thank you so much for tuning in to Clean Techies. We'll see you next time.