This Week in Startups - $3.6B crypto hack recovered + Segment co-founder Peter Reinhardt's next bet: Charm Industrial | E1382

Episode Date: February 10, 2022

We have a great interview with a serial-founder today! But first, Molly and Jason cover one of the craziest stories of the year. A couple has been charged with conspiring to launder ~$3.6B worth of crypto from the 2016 Bitfinex hack. Ilya is a former YC founder and Heather part-time rapper.  Today’s Guest is Peter Reinhardt, the co-founder of Segment, a customer data platform that sold to Twillio for $3.2B. Peter discusses his new company, Charm Industrial, which is focused on carbon capture and removal.  You will learn: 1. How they turn agricultural waste and biomass into a high-carbon fuel 2. The carbon-removal benefits of injecting the bio-fuel into old oil wells 3. Why carbon capture is an important piece of getting to Net Zero 4. The potential impact of Charm Industrial if it succeeds (total CO2 tonnage) 5. Why this process differs from more passive ways of carbon offsets 6. How he landed customers like Shopify & Stripe (and why he thinks companies will continue to do this, even without government regulation) 0:00 Jason and Molly tee up today’s topics: a MAJOR crypto scandal and an amazing interview! 2:14 Breaking down the $3.6B Bitcoin seizure federal investigators 13:39 Eight Sleep - Go to https://eightsleep.com/twist to check out the Pod Pro Cover and get $150 off at checkout! 14:56 Explaining how the laundering happened mechanically 18:21 Jason’s prior emails re: the YC founders’ company, jumping to BAYC “doxxing” story 24:25 Vanta - Get get $1,000 off automating your SOC 2 at https://vanta.com/twist 25:44 The most amazing part of this story: Razzlekhan the rapper, and Ilya the s***poster; plus Jason and Molly cast the docu-series for this disaster 33:12 Fiverr - Sign up for https://Fiverr.com/Business free for the first year and save 10% on your purchase with promo code JASON 34:34 Crypto brigading, crypto’s impact on the environment 42:00 Charm Industrial’s Peter Reinhardt (formerly of Segment) speaks about Segment selling to Twilio for $3B+ 51:38 Charm Industrial’s origin story, understanding industrial de-carbonization and carbon removal 1:05:11 1 TAM for carbon removal companies, breaking down the 4 quadrants of fighting climate change Check out Charm Industrial: https://www.charmindustrial.com FOLLOW Peter: https://twitter.com/reinpk FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Okay, everybody, we've got a great show for you today. My guest in the second half of this episode is Peter Reinhardt. He is the founder of Segment, which you remember was sold to Twilio for $3 billion, but he's on today's show to talk about his new company, Charm Industrial. It's a really interesting carbon capture company. Basically, they take agricultural waste, kind of a big deal, turn it into a liquid and store it underground, thereby removing carbon from the atmosphere. I love this because I love, because obviously I'm trying to be.

build our climate tech portfolio. And anytime Jason does a climate interview, he just gets more on the train. And this is an amazing, amazing, super interesting company and super interesting interview. Yes. And pretty soon we'll have our climate syndicate available for you to sign up for. Look for that announcement in the coming weeks. Peter is an amazing founder.

It's a great interview. But first. But first we have what is probably the tip of the iceberg of one of the craziest stories of the year. A married couple that was arrested yesterday. Today is Wednesday. That was Tuesday. Charged with conspiring to launder $3.6 billion dollars worth of crypto. Billion. Billion.

It's going to be a great show. Stick with us. This week in startups is brought to you by 8Sleep. Good Sleep is the ultimate game changer. Now you can add the Pod Pro cover to any mattress. Go to 8Sleep.com slash twist to check out the pod pro cover and get 100 $150 off at checkout. Vanta.

Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. And Fiverr Business is a modern workplace for the digital world. Their team of dedicated business success managers help match you with the best freelancers for your team. right now you can sign up for Fiverr business free for the first year and save 10% on your purchase with promo code Jason. That's F-I-V-E-R-R dot com slash business and use promo code Jason. All right, my friends, there is only one story today. There is only one story. Frankly, I like you,

am excited to have such a dishy, deep, profound, passion-inspiring crypto story to talk about. So, A married couple, I know you already heard this, and we don't care. A married couple was arrested on Tuesday and charged with conspiracy to commit money laundering and defraud the United States. $3.6 billion of Bitcoin was seized in the arrest. The couple, Ilya Lichtenstein and Heather Morgan, face up to 25 years in prison for both charges combined, 20 years max for money laundering, five years for defrauding the United States. The seizure was notable for two reasons.

Legally speaking. Yeah. One was it was the largest seizure of crypto by U.S. law enforcement ever. Fair enough. It was the largest ever financial seizure by the United States. Full stop, according to the DOJ. I just got to pause on this. Biggest amount of money ever.

It's obviously the largest crypto. Right. But and it's the largest financial seizure, which is another way of saying, Every criminal organization to this date has not been in possession of more money than these two Lex Luthor's criminal masterminds. These masterminds were in possession of more money than the Department of Justice has ever seized in history. There isn't a gambling syndicate, a crime syndicate, a drug syndicate, a financial manipulative. later, none of them have reached this level of

audacity. Exactly. Or they managed to hide their money better. This is a redfin level, like redfin is worth $3 billion. Like this is a, they had a red fin on their thumb drive, like in terms of... And a red fin on their thumb drive is amazing. The entire money cap of a redfin was on a thumb drive

in their apartment or something. I hope we can make that into like a meme. And to prove how serious this operation was, it involved the IRS criminal investigation unit, the DC Cybercrimes Unit, It's Chicago's FBI field office, New York's Homeland Security Investigations Unit, and all of this, everything that we have just said is the most boring part of the story. That's the boring stuff.

Show me these masterminds. Who is behind this criminal enterprise, this unprecedented? No, this is a bit... Is that a frog? By the way, if you're not watching this on video, we've shown a photo of these two doofuses. Oh my Lord, look at these guys. Not only are just about as awkward looking as it comes, but... appeared to be holding some sort of a brown venomous toad.

Oh, might be a five MEO toad. They might be going on a tow journey. Okay, so these two individual, that's for sure. Let me ask a question. Which camp at Burning Man would I find these folks at? Let me ask a question.

Which we work in Brooklyn do they work at? I mean, they're unbelievable. So Ilya, Ilya Lichtenstein, was a former Y-C founder and CEO of MixRing. So he's mocked. He's far of the Wafia. That's right. He founded a sales tool that helped with prospecting and finding new customers to rip off.

And Heather was a Forbes contributor and part-time rapper. I'm going to go ahead and type MixRank into my... See if they ever pitched you? There's some things that have come up here and I'm just really scared to see if this person is in my email box. While you do that, let me get my email box. While you do that, let me get the... through the law enforcement details. Okay, so what happened, the way that these two toad-licking ding-d-dongs got a hold of all this

crypto, evidently, is that in 2016, a hacker who was not them, stole crypto from BitFinex. BitFinex. I'm not even sure how you say that. Bitfinex stole an amount of crypto that is currently valued at $4.5 billion. Around the time, it was $70 million, so it was still a lot. The DOJ did not identify, so I guess it could have been the toad-licking ding-dongs, because the DOJ report did not identify who the original hacker was. That investigation still ongoing. The hacker then transferred over 119,000 stolen bitcoins to Heather and Ilya. It is worth

noting here that Ilya Lichtenstein is a dual citizen of the United States and Russia. Just throwing that out there. Oops. It might be a different kind of mafia, not just Y-C. And then over the last five years, about 25,000 stolen bitcoins were transferred out of Lichtenstein's wallet, quote, via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan. The remainder of those stolen funds, about 94,000 Bitcoin remained in the same wallet that was used to receive and store the legal proceeds from the hack. And then U.S. special agents basically got search warrants for Lichtenstein's wallets, which were hosted somewhere in the public cloud. Those files had the keys that they needed to get to the digital wallet that directly received the funds. And that's how they got the redfin sized thumb drive. Okay.

So somebody, they didn't do the hack, just so we're clear. We don't know. We don't know if they did that. It's not clear from this. That investigation is still ongoing, but they haven't been accused of it. So one assumes that they may not have. But it seems to have been one of their friends, probably, because then. somehow they got like a lot of the Bitcoin.

So I just want to pause for a second here. Number one, in all likelihood, they did not do the original crime because they would have been charged with the original crime, right? And the charging documents. So I think that's a reasonable assumption that there's another shoe that's going to drop here. Somebody of, you know, probably some high intelligence hacker, human factors, manipulator, somehow got this money out of Bitfinex. And then on the other side, that person decided to give their money to dip

Marty and Wendy from Ozarks to launder for them. And they didn't just give them, I don't know, a Bitcoin. They gave them like over 100,000 Bitcoins to launder. A hundred and 19,000 stolen bitcoins to launder. I mean, this is unbelievable. This would be like giving the person selling dine bags in Washington Square Park. like, I don't know, like an aircraft carrier, like, fill, you know, like literally a container filled with marijuana or a cocaine to sell.

Like, they do not seem qualified to do this grift. So it makes me wonder about the intelligence of the person who stole this who gave it to them to launder. I mean, criminal, we should not automatically assume intelligence on the part of criminals. Most of them get caught because they're dumb. And we should say that part of the reason, part of the evidence that these two toad-licking ding-dongs is not the terrible. wrapping. It is, although that we're going to get to that in a minute, we haven't even

got to that. It's that they stored, again, they hosted their stolen Bitcoin, or at least the wallet, right? The wallets were hosted somewhere in the public cloud. Okay. So this ding-dong was hosting like 119,000 Bitcoin on like Google Drive. Yeah, I mean, stolen. Seems reasonable. Bitcoin on Google Drive. So it's like you take your stolen money and you put it in the bank. Now, I wonder if, because he had the keys to those, which means he might have had the wallet addresses, does this mean that the Department of Justice searched all Google drives for that wallet address?

Like did a blind search and said, we have a warrant for all Google drives. I wonder if there's a legal person out there. Would this be too wide of a search warrant? We know the wallet address of this, you know, you know, theft in question.

We want you to search through every single Google drive or every single ICloud drive for that specific wallet address or, you know,

whatever the, whatever identifying information. I wonder if they could do a broad search like that. Well, let's, this seems like a good setup actually for this clip. Maybe we can find some,

some hints in this 83 second clip of Deputy Attorney General Lisa Monaco explaining how they drank the stolen Bitcoin now. All right, here we go. As alleged, the defendants used sophisticated efforts to launder the stolen cryptocurrency. But thanks to good old-fashioned police work, we traced the stolen funds from the exchange, which led us to a wallet containing over 2,000 Bitcoin addresses.

From there, investigators followed the money to accounts at the notorious dark market, Alpha Bay, an online forum dismantle. by law enforcement in 2017. From Alpha Bay, the prosecutors and investigators from the Justice Department, IRS criminal investigation, Homeland Security Investigations, and the FBI followed the stolen money on its complex journey through a labyrinth of virtual currency exchanges and wallets based here and abroad. Our work also benefited from the private sector's due diligence. As the defendants tried to launder funds through various virtual currency exchanges, many asked questions about where the money came from, or even froze funds based on their suspicions. Several exchanges enforced anti-money laundering

policies and know your customer requirements that proved key to this investigation, showing how cryptocurrency can become safer and more reliable when we work together. So that's fascinating. What notes do you have there based on that summary? Well, for one thing, I love how it like is like a procedural TV show where they give the press release and they're like, thanks to good old fashioned police work, aka a left of that one. These dumb dumb stored it on the public cloud and then Google told us exactly where to find it once we had the name of who it was. Right. Is part my note there. We should note that she mentioned it sounded I know at first like she said alphabet.

She did not talk about. She did not say the notorious. The notorious alphabet. Alpha Bay. is a dark web market that was shut down in 2017 by law enforcement. But that is the- Alpha Bay, and this is a marketplace. This is not like a very headstrong, hot guy

who you want to have as a boyfriend. It's not the Alpha Bay. It's not BAE. It's not the Alpha Bay. You are an absolute clue. When I heard Alpha Bay, I just thought like Salt Bay immediately. I was like, Alpha Bay. Wow, the Alpha Bay.

He's a real alpha. Dude, Tinder profiles. across America just got an update. Yeah, Alpha Bay. Better than Beta Bay, I guess. This was the market that they used to transfer these stolen Bitcoins to the couple. And remember, this was way back. This hack happened in 2016.

So these people have been like laundering this money or trying to live the high life or doing whatever they have for years. Because Alpha Bay, that absolute unit was shut down in 2017. Good Sleep is the ultimate game changer. And according to 8 Sleep, over 30% of American struggle with their sleep and temperature is one of the main reasons. And this is why when I got an eight sleep, all of a sudden, I was getting better sleep and making better decisions and had better

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They used fake identities to set up online accounts, obviously, wrote scripts to automate transactions so that they can do lots of transactions in a short period of time, deposited stolen funds into accounts at a lot of crypto exchanges in dark net markets, then they withdrew the funds. And this is, you know, they basically like pinged their IP address across lots of servers like they do on the TV.

It made the transaction history harder to follow because it broke up the fund flow. They converted Bitcoin to other forms of crypto, a practice known as chain hopping. And then they used US-based business accounts to try to legitimize their banking activity. So it wasn't like the clunkiest of money laundering schemes. Now, let's just think of the scale of this.

$3.6 billion, a lot of money. I'm going to just take you through a scenario. I'm not saying that this scenario is true or not true or inside information or not. It's just what we call a scenario. This is something for you to imagine. What if this group of individuals were involved in, let's say, an NFT project? and they created, I don't know, thousands of wallets.

And they made some monkeys, you know, I'm just picking something out of a hat here. Monkeys or, you know, bulldogs, I don't know, pigs. And they just made 10,000 of them. And they started selling them. And these things had no value but the value other people put on. And then they started buying them from random accounts. And you had a history now of dozens of people bidding up a monkey that was indifferent. to its fate in the world.

Like a bored monkey. The monkey has some like on wee. It's just like, indifference. He's like a little bit bored. Carefree. Like a carefree. Family.

Something. I don't know. This bored ape, you know, collection just skyrocketed. Because, I don't know, you were wandering billions of dollars. And then everybody else got involved in it. And how would anybody know that said project was going to the moon because there was some whale buying them and then finding some bagholders to buy them after them? And then people said, yeah, how did you make your money? And they'd be like, well, I bought, you know, 500 of these indifferent apes, these charming chimpanzees at some point for $6 each and now they're worth $150,000.

And I made a profit and I paid my taxes on it, so all was well and good. If I was going to wander money, and listen, I wouldn't get caught. I'd be like the Lex Luthor of this shit, but. I mean, Mel and our chat is pointing out, think about the art and antiques world, which is Mel's real job. You could do a lot of it there too. Just saying you could definitely. Now, obviously, we don't think that NFTs were how these ding-dongs laundered their money.

I'm giving one example of a crypto washing. They did a sophisticated. When I said super clunky earlier, by the way, I mean, this is clunky in that it's complicated, but it's not unsophisticated, right? It was like, clearly they knew how to move this crypto around in ways that would hide their trail somewhat, but not all the way. Okay, we seem to have found breaking news. I'm being told that we have, in fact, found a pitch email from Julia Lichtenstein.

Or this one was from actually a Y Combinator partner who sent this, like, because what they do regularly as they'll send out to investors, hey, a company's raising money like we do at our exactly. Gotcha, gotcha. So it was just like a mafia email list that you're on. That's not a mafia email list. Um, mixed rank. Everyone shares deals. It's a deal sharing. Here is mixed rank has solved the number one problem that 5.6 million inside sales reps, you know, people who dial for dollars, uh, struggle with daily discovering qualified prospects. Our SaaS sales intelligent platform combines qualified signals about millions of companies with real time verified contact information. For key decision makers, letting sales seem as quickly built highly targeted

prospects lists and close more deals, more than 70 million customers, including Twitter, Facebook, optimizely, and AdRow, use MixRank. That's a pretty good list. To accelerate data-driven outbound sales. Since completing Ycombatare in 2011, mixed rank has been growing at 4x annually with revenue doubling past seven months now with one million. And they're raising their series A at 5 million. It didn't have the valuation. But anyway, yeah, this company was out there in that time. They came. Looks like they came to a couple of our events. I can see. Or somebody from their team did, because I can see they did a review of one of our events. So that's super fascinating. So you totally know him. You know. I don't. I don't. I think it was like a, that email is like a discussion about this. And yeah, very interesting time. We had a company doing something similar to this. Like lead genius was one. Yeah. I mean, listen, it's a good business to be in. But apparently it was not successful enough to keep Crypto Clyde out of the crime. I wonder who wound up investing in mixed rank. So I'm looking at their, I wonder if they actually

got the job done and if it's still working. Total raised $1.5 million. Maybe we look in crunch base and see who actually funded the company. So there are funders here in Silicon Valley who know this individual. You know, recently, I'm not trying to muddy this story at all, but you know that BuzzFeed just put out the names of the pseudonymous founders, the pseudo anonymous founders of Yuga Labs, which is the company behind Ford A Yacht Club if we find out that for example

Wiley and Greg hacked BitFinnax back in the day okay these are unrelated stories I feel like I have to do my journalist to be here and say it's unrelated and my speculation is pure imaginary speculation

I'm just talking and I'm being sincere there is no inside information here but I do think there is something to be said here Oh Mark Cuban invested in in I just put the story here yeah DCBC 500 startups Yeah. Thanks, Nick. Quick on the draw, as always.

Yeah, they raised $1.5 million from 500 star starvedo. IAB founder Rich LaFergy. I remember him, Media Trust Chairman Peter Boards. Yeah, I seem like a reasonable business, Zach Bogue, Marissa Mayer's other half. Matt Hocko, I know him. So that's super interesting. And you know, this is a thing. You never know. Sometimes the entrepreneurial class will draw people who are fond of money and collecting power. So sometimes people can make really, bad criminal decisions. It doesn't reflect on the entire industry, just reflects on the size of the industry and the scale of it that you'll run into fraudsters, et cetera. But you know what's interesting about this BuzzFeed story? There were a bunch of people.

Not the same story, by the way, unrelated to... The unrelated story. Unrelated. When BuzzFeed revealed the names of these individuals who sought anonymity, there was a little brouhaha that they had been doxed. To be clear, you know, when you have great power, and you're responsible for something that's worth billions of dollars in economic impact,

or, I don't know, there was the Star Slate Codex guy who got revealed. You know, these are themes on a story, and people are saying the media is doxing folks. Okay. If you're creating something that is creating billions of dollars of economic activity, you are not guaranteed to be anonymous. That is not doxing necessarily. Giving somebody's address is kind of doxing. Revealing who built something is not doxing necessarily.

Coin desk had a piece. I thought that put it really well because they were like, first of all, of course it's okay to out these founders because it is unambiguously a news story. Like a giant news story. It's not a tiny new story. Full stop. I mean, Andreessen Horowitz apparently is in talks to buy a stake in Yuga Labs,

whose founders had been essentially anonymous up until this point. financing that would value the company at $5 billion, unambiguously a story. Yes. It's a, it's a, the scale of it makes it a public interest story. So how do journalists figure out if something's in the public interest? Well, it's a decision you have to make. If somebody was writing, uh, you know, a Tumblr blog about their depression and their sadness and you went and revealed them and it's just some 18 year old with three readers,

well, no, that seems like what would be, like, not a new story, and you're unnecessarily creating harm for what good? Now, if somebody creates something that drives a billion dollars in activity or it becomes incredibly influential in the world, it's news. It becomes news. I didn't like the Star Slate Codex doxing or revealing, I would say, is the better term. Let's use two terms. Let's call it, revealing the person's identity.

I thought that was probably unnecessary. Is it like somebody with three readers? No, but it wasn't somebody who needed to be revealed. But they had been revealed previously. So this idea that you get to be anonymous because you say you deserve it or because you're scared of the ramifications in public, you know, welcome to the real world.

Like, if you're on the board of a company or you become a billionaire, you get security, you know, it's the nature of the beast. You're a public figure of your celebrity. All you all, appropriate speech, right until you're not. Exactly. Okay. I'm not trying to start some shit

because what I really want to talk about today is the rapping. that's all I care about. All right. Listen, when you're a founder, it's totally fun to trade war stories with other founders. And recently Balloon CEO Amanda Greenberg, one of my awesome portfolio companies, told me how Vanta's SOC2 solution helped her save an important deal in the final hours. I kid you not.

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dollars off. Thanks, Fanta. Like, this is a good story. It's neat. Biggest financial thing ever ever sees by the DOJ. That's awesome. Now we have got to get to the part where these, because these two are like the greatest characters to come along in I don't know how long, right? Like you thought Adam Newman was like a fun character to follow and then the things of like all the bonkers stuff they were doing with all their money. No, no, no, no, no. No. Heather Morgan, Forbes contributor, part-time rapper, accused Bitcoin money launderer, went by the stage name RazelCon. And here are a couple of her greatest hits. AirPods, AirPods.

Motherf-irpods. Where are my goddamn AirPods? Apple find my phone, but it won't work at home. God damn it, where are my AirPods? No, for real, though. Why does Apple find my phone not

work well for finding AirPods in the case? It's the worst. Anyone feel me? Razzle-Dazel. We have to do it. She ends up with Razzle-Dazel. Can you the first one too? Okay, let's play the other one.

And then I have a special game we're going to play. I'm a motherfucker Bad bitch. Go on Mitch, you annoying magic. Wow. Oh my God. I mean, she is right about the AirPods, though.

She is totally right. She is really right about that. Okay, what is her rap name? I was trying to pronounce this. Razel Khan. Con. Like Star Trek. Con.

It's even better at a COM. The Razel Khan. Because it's a con. Because she's coning people. Look at you. It was a Razzocon. All right. I'm going to go with

for casting her for the Showtime series written by Brian Cobbman. Watch party. Watch party. Brian Cobbman's got too much work and crazy internet companies and shenanigans.

Okay, I'm going to give two choices. You tell me which one would play her better. Okay. Jessica Chastain. Yes. Jessica Chastain, right? You remember Zero Doc 30, huh?

Mm-hmm. I think she was also. was she in Molly's game maybe? Okay. And then here's my wild card. Social media influencer, Bella Thorn, also has been in some movies that are not of note. But she's kind of a unique social.

If you look up Bell of Thorne or, I know that's a, that's a, Bella of the one is a weird pull because people don't know who she is, but if you're on social, you know who she is. And she looks just like her. She looks, but way. And acts just like her. Yeah, she's kind of doofy like that.

She was a Disney store, apparently, step it up. But then she kind of went crazy on social media and then create, remember she, oh, you know what? She was the one who created the only fans, didn't get naked on only fans and then made a million dollars in the first month. And everybody was like, what? Why does this white woman get to come on here and then become the number one person and all these positive sex workers? You know, she's taking all the money away from then. It was like a whole brouhaha that she had gentrified only fans. Who do you got?

She looks like a younger. Hold on. I'm trying to find her because her name is Rose Byrne. Rose Byrne is a great idea. Rose Byrne is a little older now. I know. She's a player in jail. She's so funny, though.

Like she just could perfectly nail. She could. I would say Rose Byrne is more qualified, yes. Painful, awkward. I mean, if she was making those rap faces, like you would laugh so hard. Have you seen that movie Spy with Melissa McCarthy and Roseburn?

Yeah, I think I've seen a little bit of it. If you want the Roseburn, best performance ever. Hysterical. Best performance ever for Roseburn, as far as I'm concerned. Astaire. Get him to the Greek. Oh, yeah, yes.

And if you, she literally does a number of rap songs in that. And it's amazing. Oh, the Duff. Not a bad call, Rachel Hillary Duff. I could see that. But what about I feel? What are we looking at for Ilya here? Who's into play this guy?

He's kind of, for those of you who are not watching the live stream, like he's a little, he's pretty Russian looking, kind of dorky-looking, weasily, a little weasily. I mean,

it's an interesting one. Yeah, it's a tricky one. Tom Holland could pull it off. He's a very good-looking Tom Holland, obviously, but I think he could nerd it up and be a little bit of a challenge

for a Tom Holland. But that's what came to my mind immediately. Yeah. Shalame is too pretty. Who's in this like cohort even? Is Shalomey the one from call? Call me by your name?

Timothy Shalame is a good pull. Oh, you know what? He's perfect. Come on now. And he's got this nerdy little mustache. Hold on. Okay. Timothy Shalomey.

Oh yeah. Look at this. Look at this. He's perfect. He's perfect. Yes. Ilya Lichtenstein, by the way, was a part-time poster.

He even recently tweeted at Mark Andreessen about his low-quality memes back in early January. Oh, this poster. Makes total sense. Of course he is. How wild he wrote that billionaires who can do anything in the world choose to prioritize posting second rate memes on Twitter. Then, of course, P. Marco with the last laugh yesterday because his team never sleeps or he never works.

Unclear, which is the case. Mark Andreessen tweeted, overheard, he was dunking on you when he should have been on his flight a flight to Switzerland. Yeah, well, Bobby Axelrod. Spoiler allowed, season two billions. Barreto. Oh, my Lord. Yeah, he should have been in the Zerg. They're alleged.

Bonnie and Clyde. Alleged, yes. I mean, we don't know they're guilty yet. I mean, they seem incredibly. We have four, ready? Bring it up, bring it up. Oh, my, weird geniuses. Nailed it.

Nailed it. And then finally, LA Times business editor and one of my favorite people on Twitter, Jeff Berkovicchi, Berkavici, I feel terrible because he actually, in his bio, he tells you how to pronounce his name, but I never look before this show. A friend of the pod. He's been on many. times. Oh, really? He's so good. Yeah. So sad, he writes, so sad and predictable to see the anti-tech media once again taking down hardworking crypto entrepreneurs for the crime of being successful

and money laundering. So good. He did a follow-out one too. Young people who have grown-ups speaking crypto in Web 3 see money laundering as a new social norm. Journalists who don't understand that will become irrelevant. I mean, that is literally my replies. If you, these crypto folks are so good at Psiops that if you give them they're such snowflakes that if you give them even the most modest criticism they will get into your feet and be like, have fun being four,

poor, you don't get it, blah, blah, blah, blah, blah. And you're like, oh my God, it's so toxic. All I said was, do you think you should know your customer? And in this case, know your customer. That was the thing about the little press conference we played there, the Law & Order press conference. Bum, we should have put the bum bum music behind it. Good old-fashioned police work.

Good old-fashioned police work. We should have totally put that. Can we do that in post? The start of the year is always crazy. And you might need some extra help. Sound familiar? That's the boat I'm in right now myself. So look no further than Fiverr business.

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Right now you can sign up at Fiverr business, absolutely free for the first year. Get one year for free and save 10% on your purchase of Fiverr business with the promo code. Jason, what a promo code. of Fiverr.com slash business. F-I-V-E-R-R dot com slash business. And don't forget to use the promo code Jason to get 10% off. But Jeff makes a very good point

because people, I think if you are in crypto right now, listen, I see a lot of companies, I work with a lot of companies, the amount of entitlement, insanity, accountability, and reasonability in crypto is at an all-time, like, either low or high, depending on what's worse. Like, no accountability,

ridiculous entitlement, no discipline, madness, no buttoned up nature to this. Everybody's just winging it. And you know what? Like, it's a bad look for crypto. Every crifter. I'm sorry. There are going to be a lot of people who, like, and there's one in the chat right now, being like not all Bitcoiners.

Hey, it doesn't matter. If the poster, the poster behavior for your thing is brigading, is this incessant attacks. Explain brigading. Brigading is like when you go and get all your friends slash bots on the internet to attack a person on a specific thing. It is targeted harassed targeted, targeted harassment. Like I do with Prof. G. And his own.

With his predictions. Like I do with Prop. Yes. And the thing is, and look, this is the case, you know, I mean, sorry. Tesla fan boys do it. Crypto fan. There's a lot of crossover there. There's a lot of crossover in these communities that are, that started out as rightfully passionate.

about a thing that a lot of people don't totally understand and maybe come down on. But the fact is, like, if you can't take people asking real questions about a thing, whatever that thing is, actual critiques, real lived experiences with the thing in question, like, you're just hurting yourself in the long run. You're just hurting your brand in the long run. Yeah, you got to get it under control. I think the toxic Bitcoin, the toxic left, the toxic right, everything in between. Toxic Joe Rogan people, toxic Tesla people, Tesla Q.

extremists are bad. Like just do not get in people's app mentions and harass them. Make your point intelligently. But what I do is I always look at the profile page. Nine times out of ten when somebody's like, stop interrupting Sacks who gets to give the longest monologs on all of all in.

It's always from some account that was created in under six months with no followers that follows the top 100 people. It's like oh, it's another spam account. And there's a software that lets you create like 100 accounts at a time, I understand, or scripts that allow you to do that. So people create hundreds of these things, and then they just coordinate them.

And so they'll attack you for criticizing Bitcoin as a strategy to get people to stop criticizing, and that's what makes it look like a Ponzi scheme. And, you know, that is one of the signs of a Ponzi is attacking anybody who questions the Ponzi. Yep. And that's what we see in crypto, two off. We do. And then you get an equal and opposite extremist reaction.

So that, for example, when who was it, who tweeted about having an NFT, it was Captain Marvel. Bree Larson tweeted about having an NFT profile picture. She got an NFT apparently gifted to her. She just got this like... Demolish.

She just got demolished by the equal and opposite reaction, right? Whenever you make something into like a cult, then you get an equal and opposite reaction. A cult on the other side

who's like, this is in defense. No, Brie, don't do it. Don't do it. Don't be allowed. Don't be allowed. Meanwhile, Steph Curry has got a board aide, like Alexis O'Hanee,

and a lot of so disenfant. So disappointed. So disappointed. Do better. Do better. Do better, Bree. Honestly, Bray, do better. Seriously. You know what I'd like? Can somebody create a do better Jason bot that and no matter what I tweet, it just within like a microsecond just says do better Jason. Just retweet it and just do better Jason. I would love that. Do better. Do better is like an instant block for me. Like I'm just like, oh no. Just to ruin my mentions yet again. Hey, the fun other thing about crypto is it's environment.

Mentally indefensible, which gets us to today's guest. Okay. It is not environmentally un- Indefensible. Are you trolling? Kind of, but not really. Okay. Because, I mean, much of crypto is more efficient than printing dollars and shipping them

around, right? And then some of them... Dollars are the world's reserve currency, though. Crypto was just invented. Well, I know. But let's just say there is a crypto that is above board, regulated, doing everything right, you would think that that would be more efficient. Maybe I should be more specific. NFTs are environmentally indefensible.

Crypto and blockchain are environmentally damaging. And even if they're getting better, they're still, you know, even if they end up incentivizing some renewable energy, it's renewable energy that's used for that and not something else. And at this point, it's just, when I say indefensible, I mean literally that. It is, there is not a good defense. Right. You have to accept there is a carbon cost to... There is a carbon cost and it's high. And it should be zero or close to zero because this is being done on server.

So do better, crypto. Do better. That's going to be my new catchphrase. Anyway, yes, I also now have effectively trolled myself. So you welcome everyone. Welcome to at Mollywood's replies from the next 24 hours. Yep. Let's toss to a great interview.

Peter Reinhart is from Charm Industrial, and they are doing carbon sequestration? Carbon capture. Yeah, carbon capture, basically. No, they're doing carbon capture. So it's a really interesting concept. He was, of course, the founder of Segment, which got bought by Twilio for over $3 billion,

but he talks to me in this great interview about taking biomass, you know, like think the things that come off of wheat or corn that we don't actually use, which is then going to decompose and put carbon in the atmosphere. Well, what if you could take that, make it into a slurry slash liquid and pour that liquid into, say, the holes that came from taking oil out of the ground and that it caused no damage and then it wouldn't put carbon into the atmosphere.

And then you could sell that to people who are putting carbon to the atmosphere or you could just remove that portion of the carbon being put into the atmosphere. That would be something that might interest you, Molly? I'm super into this and I was crushed that I could not go to this interview because I think like every step in this direction is so unbelievably useful. And I mean, I think to your point, the fact that they take this waste turned into a liquid and store it underground means that they are also sequestering carbon, which hopefully makes it more scalable. Because when you look at the goals coming out of COP 26 or even the Paris Agreement or everybody's, you know, the United States is net zero carbon goals. they all rely on this technology that in many cases does not yet exist at scale.

So, great interview. Yeah. As we learned with our John Dorr interview from Sunday, you know, there's like 20 different things that have to get done here across six categories with four different constituents and like this is one of them, which is, hey, if there's things that are occurring naturally to put carbon in the atmosphere, if you can help that way too. So it doesn't just need to be replacing, you know, a diesel or a gas powered icing, engine in your car with an EV, certainly that helps. But there are just things that occur naturally

that are putting carbon into the atmosphere. So everything that gets carbon out of the atmosphere is going to help. Yes, 100%. Let's go for it, folks. All right, enjoy the interview. All right, everybody. Next up on the program is Peter Reinhardt. If you remember, he was last on the program, episode 935 in May of 2019 when Segment was worth, oh, just over a billion dollars. And everybody knows Segment. They've sold a customer data platform for a long time that analyzes segments of your users. So you can understand, you know, how different cohorts are using your product from different time periods or different funnels. Maybe you have some Twitter users, some Google search users.

And it really is one of those industry standard products that everybody uses. and we talked with Jeff from Twilio about acquiring it back in October of 2020. And Peter is back on the program to talk about his new startup slash mission in life, which is in the climate space. Welcome back to the program, Peter. Thanks so much for having me. I'm excited to be back. Great to have you back.

Congratulations on the sale. Thank you. How did you come to make that decision? Very hard decision for founders. Obviously, in fact that it got bought for 3.2, billion takes the edge off, but, you know, when you're that successful and things are going in the right direction, you could have gone the IPO route, SPAC route, stay private route, or sell route.

So maybe take the founders who listen to this weekend startups through your decision-making process there before we get to your new startup. Yeah, for sure. I think I first started talking with Jeff about it maybe a year and a half before we actually went through with the sale. And I think he had a vision for how the messaging that Twitter, has for sending SMS and emails and so on could be combined with the data that we had in segment and how that would make both more powerful and really help customers send better

messages once they had the data alongside it. So that was his vision. And at first I just like, I didn't see it. And so I just kind of punted it. I was like, Jeff, I'm not interested. I don't see it. I don't hear our customers talking about it that way. But after about a year, I started to notice that customers were really kind of talking about it differently. Customers were actually talking about it in those terms. They're like, look, I send a lot of messages. I'd like to send them in a more intelligent way. I'd like to use the data to send it. And so I started to see it more from Jeff's eyes of like, oh, actually, this would be like a crazy differentiated value problems. This would be a crazy differentiated company. If you actually did have both these things,

it's actually a huge opportunity. And so that I think made it very compelling and interesting. Explain to the audience how the greatest example you can think of, of some who has segmented their data, has all their cohort data there, and they want to message people. What would be just a great example for people to understand this synergistic concept? Sure. Let's suppose you have a bunch of sign-ups on whatever your service is online. You probably have people have different types signing up. People from, say it's a B2B company. You got people signing up with small companies, people signing up from big companies, people signing up in different roles, some of them might be in procurement, some of them might be in

marketing, some of them might be in engineering, different seniority. So you have like a whole three dimensional four dimensional matrix of like who's signing up. And if you just send one message that's like, thanks for signing up for X, you're not going to get great engagement. But if you actually send through messages that are targeted in this like four dimensional space of like, hi, I saw you're like the procurement person in a large enterprise, like here's the tools that you need from our documentation and here's some attachments for how you can really engage with us best in a buying process. You get like massive lift in terms of selling better and marketing better into those segments.

And so it totally changes the message that you send. It might even change the channel that you send that message on. Yeah. And so that's the sort of superpower that the two combined can deliver. I'm seeing that a lot in e-commerce companies where we all get a met. We buy something on Nike.com. And then all of a sudden, it's like they know I'm a runner. They know I buy, you know, two or three pairs of shoes at a time.

So now they can say, oh, runner, California, bought these colors before. The email can be customized or they could just say, hey, runners in California who are male, who are size 10, and who have bought over 10 pairs and have been with Nike over this amount of time. So like, marketers are kind of ready for that stuff, huh? That's right. Nike's a great customer of segment and toy. There you go. I mean, literally, when you were talking about the vision, I was thinking about my emails from Nike and how sophisticated they are because they know I like AirMax. And, you know, I don't get this from Sacconi or the other running brands.

Now, I don't buy direct from them that often, but they don't seem to have invested in this, but it is something that will come down to all, I think, companies. Where does AI come into all this? Did your customers start asking you for machine learning and AI towards the end of your tenure there? Because it does seem to me, you know, when I get my YouTube message of like, or Twitter, here's what you missed since you last logged in, that's super AI machine learning, isn't it? it is. I think most marketers in practice are constrained by the logistics of data.

You know, they're like copy pasting spreadsheets around and like trying to make data points match and stuff like that. So in reality, I think they're constrained by the logistics of data, but everyone aspires to solve the logistics, which is what Segment and Trio do, such that, then you can put all of your effort into the infinite divisibility of your customer base into not just four dimensions, but 100 dimensions and so on. Yeah. So many dimensions that you. you eventually need to discover those dimensions and segmentation by machine learning. And eventually so much so that you couldn't possibly write content in that many variations. You wouldn't even understand what the machine's doing, right?

It would be like, we don't even know why we're sending you these shoes. So in that limit is, I think, where the vision of AI and machine learning comes, but I think the pragmatically on the ground, everyone's constrained by the logistics of getting the data into the right spot right now. So just curious on the acquisition front, you then call Jeff up and go, I think, remember that conversation we had a year ago? Or is he just pursuing you every six months saying, hey, how's everything going? Yeah, definitely chatted about it once a quarter.

Oh, wow. And for a year and a half. And then kind of simultaneously, there was a handful of interest in the, handful of interest in parties in the company. And so things started moving. For the folks who don't understand, how does that work on like a board level

when you're like, hey, I want to sell my company? Here's the opportunity. Are the VCs, we always hear about this. They want you to go along. They want you to go public. How did the dynamic work where you had to build consensus and then get to a sale and then we'll go on to Charm Industrial. Yeah. This was also a very unique moment. So this was the middle of 2020. COVID had just hit. The economy was down massively. Sales had slowed massively. We had actually just done a layoff of about 10%. Most companies are allowed. Oh, Airbnb did a third, I think, if I'm

remembering currently. Uber did 20. I think most high growth companies did about a 10% pump the breaks, right? It's kind of scary, right? Like you're like, oh my God, what's going to happen? Like it's unprecedented and you just have to do something to cut burn. Yep.

And so I think in that moment, it was easy for folks around the table to kind of see the risks of staying an independent course and easy to see the upside. But with the strategic upside that is still very obvious of like bringing data and messaging together, but also the upside in terms of like going and winning the market and having the resources to just go, go make it happen. Did you stick around for a while or did you, they just wanted to take it over? What was your relationship there? Yeah, my intention was to stay quite a while. I stayed for a little over a year and felt like a really, like, valued member of the executive team there. It was awesome working with a bunch of folks like Kazama, who's now the chief operating

officer, A. All, who's the incoming chief product officer, super, super sharp folks, Jeff's incredible marketer. So lots to learn and really like amazing team. What kind of started to happen to me in parallel about four years ago, I helped start a carbon removal company called Charm Industrial. And here we go. Perfect exactly. Yeah. And I, it was like, you know, a half day a week at first, and then, you know, it was like a day a week. And then over the course of 2021, Charmeda started taking off. Like, we started winning contracts from, uh, not just Stripe and Shopify, but also Microsoft and, uh, Square and Zendesk and a whole bunch of others. Like, we started delivering carbon removal in Oklahoma and Kansas. Uh, we started having conversations with regulators. Like,

things just started exploding. And so I found myself a little bit between a rock and a hard place of, uh, frankly feeling like I still had a lot left to do at, uh, at Twilio. Um, but also feeling like, this is a really important problem to solve in power removal and like charms off to the races like I can't I can't stop you know it's like when you start getting that market pull for your startup yeah

and you're just like it takes all your retention and then your brain and your heart tells you like this is where I need to be and it's hard to let go isn't it like of the previous company but it's impossible to not take the next journey totally and it's a champagne problem but like it's a problem nonetheless that like I can't I can't both be

at COP 26 in Glasgow meeting with regulators who would like to have that meeting and simultaneously be in exec team meetings back in San Francisco for twice. So it just got to a place of physical impossibility. So not easy and definitely sad to kind of say by to a company that I spent 10 and a half years. And as I remember the origin story, charm industrial, you were trying to figure out, hey, how do I offset all this carbon, you know, the energy I'm using at segment? and you went on that little discovery to try to figure out,

I don't know, do I buy carbon offsets, etc. So take us through what happened three or four years ago when you went on that journey and how frustrating it was and then how you wound up actually coming to this really interesting, you know, sawdust byproduct oil. And we'll get into that technically in a moment. Sounds good, yeah. About six years ago, I started trying to figure out how to offset segment's emissions.

And like, Segment doesn't, you know, directly burn a lot of fossil fuels. This is like flying around for sales and buying food for the office and stuff like that, servers. Yeah. Food for the office is surprisingly large. Interesting. In terms of emissions. So, let's try to figure out that. We kind of like roughly estimated our footprint and emissions footprint.

And then we went and purchased a bunch of offsets. Yeah, these are like rainforest offsets in Indonesia, I think. And we didn't think too much about it, which made the purchase and moved on. And then a year later, we were kind of looking at it in more detail. I mean, like, wait a second. What actually, what happened when we purchased those offsets? And the more that we dug into it, the more kind of not great we felt about it. Like, probably 70% of the money got spent on marketing agencies in the U.S.

30% actually purchased some forest in Indonesia, which is great. I'm sure it helps from ecological perspective. But from a carbon perspective, like the next year, there were huge raging forest fires in Indonesia. and like I wasn't quite sure that like did they just cut down the forest next door. Like I couldn't really tell what impact those dollars had. So I kind of got sucked into the rabbit hole, if you will, like, oh, yeah, like what's the better solution and where do we need to pay attention? And so spent about a year with some friends, Kevin Meisner,

who's now a co-founder at Yardstick and was a co-founder at Charm and Sean Mien and Kelly Herring, just digging into industrial decarbonization and carbon removal. Explain to people who don't know what carbon removal decarbonization is versus buying carbon offsets or other devices to try to stop global warming because that's what this is all about at its quality, correct? Yeah. So the problem is that we're releasing chemicals into the atmosphere that are creating sort of radiative forcing that's pushing a bunch of infrared light back into the planet and heating it up. And the two sort of molecules that matter the most are carbon dioxide and methane, carbon. dioxide is probably 70-ish percent of the problem, and methane is probably 30 percent of the problem. Within carbon dioxide, probably a third-ish comes from the electrical grid and power stations. Probably a third comes from transport, give or take, and a third comes from

industrial and agricultural and so on. And everyone is really dialed into like transport and grid, right? Like decarbonize the grid and switch over to electric cars. But there's like almost half the problem sits outside that. Just in CO2, not to mention methane. So, actually, the part of the problem that everyone's focused on is like maybe a third of the total problem. Right. And so these other areas are interesting. Industrial decarbonization is like steel manufacturing, cement kilns, ammonia production,

methanol, plastics, all this kind of stuff that is kind of gritty and we'd rather not think about. So when we make those things, we pour carbon into the atmosphere. It's the manufacturing of concrete that is just, you know, it's not like we're going to be able to say, like, don't use concrete because concrete is how we build a lot of things, especially in the developing world. Ditto steel. Like, we're not going to stop using steel.

Kind of hard. But right now we make it with coal. There's a single steel company that emits 150 million tons a year just operating. Brutal. Just operating their steel manufacturing plants. So all their furnaces. So I got really interested in, like, decarbonizing that. Like, what are the processes?

cease to do that. And carbon offset is where you say, hey, we're both going to emit a ton. I'll pay you not to emit your ton so that I can emit my ton. We still end up with one ton in the atmosphere additional. Right. A removal is where I say, I'm going to admit one ton, but I'm going to pay you to remove a ton. So I'm truly not emitting anything. Right. And so that the removals is actually an extremely underdeveloped space. Like we kind of hear about it in the news, you know, like you see Climarks, for example, an amazing company based in Switzerland. They've deployed this big set of fans that are collecting and absorbing CO2 out of the atmosphere

and they pump it underground in Iceland. They got these big beautiful fans. I did see that, yes. Yeah. So this is literally trying to pull carbon out of the atmosphere. And then somebody who's putting it in says, okay, I'm still going to put it in. There's no way for me to avoid that. I'm flying a jet or whatever it is.

Therefore, I'll pay you to pull it back out. That's right. Fascinate. Now, that business exists. You have some spin on. this business that you discovered. What is it? My co-founder, Sean, had a very interesting breakthrough about two years ago, which is he realized that, hey, we already have 110 billion tons a year of CO2 coming out of the atmosphere into biomass, and then going back into the atmosphere

as that biomass rots and burns, like forest fires in the Sierra as every year, or all of the corn crops that we grow in the Midwest, all that residue, all the stocks and leaves, they just rot and go right back into the atmosphere. So in other words, plants have already done the work of capturing it and then just we just let it go back. So what if we had a way of sort of turning that into a liquid and then injecting it deep underground? So let me see if I follow this. Somebody is out there making sugar, cane, corn, wheat, whatever. There's a bunch of chaff or something that's not used. What's left over when we take what we need out of those crops. And it just sits there in a field and decomposes.

But in the decomposure process, it is releasing carbon into the atmosphere. Am I correct? That's right. So you can take that material and then do some process to it that makes it liquid, take that liquid instead of going into the atmosphere

and pour it underground. That's correct. This seems incredibly simple. And importantly, we have to take some part of the material that we take comes out of solid, char and ash and pot ash, nutrients.

We have to put those back on the field, which actually is very regenerative for the soil, which is super exciting in its own right. Where you put it's carbon and potash, you sort of close the nutrient loop, make sure the soil is actually getting healthier over time, not that you're just sort of extracting and extracting. And when we think about economic incentive, am I correct here? And I really appreciate you explaining this to be in being patient with me because this stuff is way above my pay grade.

And I think maybe a lot of people in the audience feel intimidated by it. But the farmers who are making, you know, something that results in, I don't know, sawdust, nut shells, stocks from corn or whatever it is, there's no economic incentive for them to do anything other than throw that stuff away or put it in a field next to their cornfield. Am I correct that there's no economic incentive? There's nobody's going to buy that stuff. That's right.

So if you're like the average small older farm in the U.S. growing corn, you're probably making like on the order of $100,000 a year in revenue. On a gross market, like a profit basis, you're probably making 10 to 20K. per year on that, meaning you're probably also doing some other stuff, because that's not really enough to live on. Yep.

And if we then come in and buy the biomass, if we come in and buy the bales of cornstover and so on, it's an additional, like, almost a doubling of net profit, because they weren't going to do anything with it anyway. So now it's just like totally net new revenue. So that's the economic incentive. They have no existing economic incentive for it, but if we come in and buy it and then turn it into this bio-o-all that goes underground

and puts some nutrients back on their field. It can be a really winning proposition for them. Okay. So another stupid question on behalf of the audience myself and people who are trying to understand climate, doesn't like getting that stuff and transporting it somewhere and the process of turning into a liquid take a bunch of energy? So how do you make that energy less than the cost of the energy

to just leave it in the field to rot? So the energy for our process comes from the biomass itself. That's the key. So we're not using any power for the electrical grid or anything like that. In other words, you give it a kick to get started and then it's a self-sustaining sort of system. Another important point is that you're right, transporting biomass is really expensive or really inefficient from a car. It sounds heavy. Nutshells, corn, stocks, saw it dust.

Not so much that it's heavy. The problem is that it's fluffy. Oh, so it takes a lot of volume. You can't fit it. You can't fit it on a truck. So if you look at the economics of it, it's about $10 a ton on the field. So if you just don't move it, just let it sit there. It's about $65 a ton at the farm gate.

And then it's about $125 a ton like significantly down the road. So part of the whole proposition for how Charm operates is we build these machines that do this conversion in a 40-foot shipping container form factor. And the plan is to deploy them at the field edge. So deploy them all the way out right at the farm and then follow the harvest. And that means that you cut out all this OPEX and effort and expenditure and carbon emissions associated. it with moving it. Eventually, we actually want to operate on the field, like a combine harvester or a custom harvester unit. These are like crews of guys that follow the harvest with combines. Wow. We'll have a similar model eventually of following the harvest with, you know,

a wolf pack of 10 or 20 paralyzers. So, um, if I'm correct in understanding, hey, you go to the farm, you take the byproduct. Let's call the corn stalks just because that's easy to envision. You put the corn stalks into some sort of a that, start some chemical, uh, processes. and then it liquefies, and I guess that makes it denser, am I correct in that regard? And this oil or slurry or something you're creating is not dangerous to the earth,

because it's bioproduct. It's not like you're burning it. You're not putting this in the back of another tractor to drive it. You're just saying, hey, we've sequestered it, so now it's not going to release it, therefore we can put it into the ground. You put it underground, takes a little energy, I guess, to drill a hole or something,

or maybe you're filling up a cave. But that's no big deal. if whatever hundreds of millions of gallons of this was buried underground, it wouldn't be a big deal, correct? Correct. And a couple things to clarify on the put underground portion. We are very excited about eventually using abandoned oil wells. So across the United States, there's about 2.1 million abandoned wells, oil and gas wells, that are just leaking natural gas, like generally like leaking oil at the surface.

It's a total mess. There's actually over $4 billion allocated in the last infrastructure bill to help clean up some of these wells. It's a huge problem. But anyways, we'd like to reuse those wells. And so this is injecting way deep underground into old oil and gas reservoirs. We're not like way far away from aquifers like thousands and thousands of feet down. Got it. And what is the nature of the oil or biomass liquid you're creating? Is it like, does it look like oil? Is it like liquid? Does it evaporate? Does it just slowly decompose? What happens to it over a hundred years? Because I'm starting to think of like, who's going to try to stop you in this process?

I think you sort of cut me off with the past, which is like, oh, my God, it's going to affect the water shed and that water table. But if you put it somewhere where oil was previously and dead dinosaurs were, well, that had something really gnarly in it, and this is less gnarly. So that's like almost an upgrade, right? Yeah. So bio oil itself, oil is really a mess number. Bio oil is about 25% water, give or take, another 25% acetic acid, give or take.

and then about 300 other compounds that are all derived from cellulose. And the pyrolysis process is just heating up cellulose, which is basically raw, biomass, straw, stuff like that. One of the most important, there's a few two properties of bio oil that are really important in terms of its sequestration underground. One of them is its density. So after injection, the question is, what happens? Is the water table going to try to push it up or is it going to sink?

And bio oil is very dense. It's denser than water. It's denser than salt. water that it's injected into, typically in these formations. And so it's actually going to sink in the formation. Got it. And the other cool thing is bio oil has a lot of phenols in it. I realize it's getting technical, but what's cool about phenols is they polymerized,

so they turn into long chains. If you heard of like phenolic resin, basically they become solid. And so what's cool about that is we inject the bio oil, it sinks, and we've done core sample tests at the surface that show that within a couple days, the bio oil actually becomes solid. And that doesn't happen at the surface. because of the surface, it's colder. But down hole, it's like, you know, 100 degrees Fahrenheit,

200 degrees Fahrenheit. And so you get this very rapid reaction that caused it to become solid. So this is like gold standard permanence where you like inject it, it sinks, and it becomes solid. It's not going anywhere. Fascinating. How much. So, you know, it's incredible to put an entrepreneur's mind, you know,

and lean startup thinking or, you know, whatever methodology you like AB testing and just consistent iteration on each step of this process. So as you go through and you make each step more efficient and think from first principles, what's the best way to, you know, pick this stuff up, bring the, you know, bioreaction chamber to this place and then where to put it. I guess the question is total addressable market now. How much of this biomass is sitting out there that we can sequester and make into this biomass liquid and then bury?

And then what impact would that have? So if you were to truly scale this and you can make 100,000 of these, trucks that are going all over North America, what impact would it have? So you're right that the constraint is biomass. The constraint is not like subsurface geology. We could put like almost unlimited amounts of biohull down there. The constraint is not the machines. We can build many machines. In fact, they get cheaper and cheaper as we scale, which is great. You're right that the constraint is biomass. In the United States, as one example, there's 100 million acres of corn grown every year. Each acre of corn produces about four dry tons of

stover or straw. We can only take half of that for kind of sustainability reasons. So that's, that by itself is 200 million tons of biomass. If you then look at the other crops, sugar, cambe gas, wheat straw, timber slash from forestry operations, forest fire thinning, beetle kill thinning, like all these different things. In North America, you very quickly get up to a billion tons of biomass, which translates into a billion tons of year of removal, give or take. If you then go global, it's somewhere between five and 10 billion tons a year potential in terms of removal via charms process. Now, that 5 to 10 billion tons of year compares to currently 50 billion tons a year of emissions. So we can maybe 10 or maybe 20% of current emissions. But what's really

important to remember is we first have to go to massive reductions, right? We have to go eliminate all the emissions coming from the grid, all the emissions coming from transport, all industry, all industry emissions. The removals really have to be used to go clean up the stuff that we've already emitted the historical emissions that are already in excess of what we can handle. So this isn't a market that really, outside of initially, like this isn't a, this isn't a technology that should be used to allow us to keep emitting. We have to get reduct. We have to reduce back to zero. And then we've got to go clean up all the junk that we've left in the atmosphere. So in a way, we've got to pay down the debt we owe. We got to. And in knowing what you know now,

We have a large number of folks, you know, out there in the world who are panicking about global warming. Are you in panic mode, concern mode, optimistic mode, or I'm certain you're not in despondent mode like many of the people I see who are like, I don't want to bring children into this world because it's going to be a literal hot mess, you know, that they're going to inherit. How do you feel personally about the state and the chances that we actually reverse, not to be a literal hot mess, you know, that they're going to inherit? is that we actually reverse, not just contained, but actually get into that what you talked about, reversing it and paying down our debt in our lifetime. Can we get there? I think there's a really important transformation

that we need to go through as a society for how we approach dealing with climate change. We've spent a lot of the last 20 years, unfortunately, in broader society, kind of screaming at the scoreboard of like, this is a problem and screaming louder and louder that this is a problem with low clarity and low agency on actually just going and making a change. And I think this is summed up to some extent in a quote that I saw from Greta Thunberg recently

where she said, look, it's not my, it's not my job to figure out the solution. It's my job to demand a solution from our governments. Right. And I think there's a little bit of a misnomer in there, which is like, I'll forgive her. She's a child. I don't expect her to solve the problem per se. But like, I think that mentality of like the lack of agency embedded in that, that like, no, we can go figure out the problem.

Like, I specifically need to go work on this problem. And we need many people saying, I specifically am going to go actually figure this out. And I'm not just going to scream at the scoreboard and hope that someone else goes and figures it out. And so I think people generally think that the space is much fuller of people working on it than it is. There was a conference in September in In Zurich, Coasted by Climborks that basically brought together pretty much the whole carbon dioxide removal space. Everyone sat around two tables. And some companies had multiple representatives. there. And so just the thinness of the

frontier and how few people are actually sort of acting on it with agency I think is maybe the biggest problem. And I would love to see more people coming into the space and as competitors are working in other areas and feeling agency on the problem, I think, is the transformation that we need to go through.

Yeah. And that's starting to happen and that's giving me optimism. It's definitely happening in a major way. We had John Doer on the program recently and he's got a new book out. Actually, you're mentioned in it. The book is Speed and Scale. I'm not sure if you got a copy yet or an advanced copy. But, you know, he kind of outlines there's

kind of like roughly four groups of people involved in this. You got the policymakers, politicians, you got the entrepreneurs like yourself, capital allocators like myself. And actually, you're a capital allocator because my understanding is you got a lot of skin in the game. You put a lot of your own money in this? Yeah. Millions of dollars, tens of millions?

Yes. Yeah. I mean, thank you. First. And I hope it works out as an investment at the very least. So you have capital outages. They have consumers. And if we look at those four groups, it seems to me three of them are doing their jobs. And maybe one group is maybe not. Consumers, you agree, are really voting with their dollar, correct?

Yeah, I think so. Consumers are also a tough one. Consumers definitely are voting with their dollar, voting with their, like, support. I think people vote even in a bigger way with their employers, interestingly. Ah, explain that. Where they want to go work, right? Do you want to work? Imagine you're like, millennial Gen Z.

do you want to go work at a company that has a footprint and just doesn't care? Or do you want to go work at the company that is like, no, we're going to get to net zero ASAP because we care about the future and we care about young people, which is going to have an easier time recruiting young people and like the upcoming generation of super smart people who want to work super hard. So employer branding is big. So I think consumers almost have more pull through employer action than anything else. Sorry, there is one thing you have to be careful of with consumers is BP, British Petroleum actually. an incredible job, a credible ad campaign. We're sorry. Yeah, like a couple decades ago where they basically reframed the problem not as something

that companies needed to work on, but as something that individuals needed to take individual responsibility for. Yeah. Which is sort of true, but it was like really like shifted the conversation in kind of unhealthy ways because often, I mean, most emissions in some sense flow through activities of companies and companies can and now are having a massive impact, like Stripe becoming the first to just purchase carbon removals, Shopify, Microsoft, Zendesk. Google is going to be carbon neutral and then carbon positive, I guess.

Huge levers that they can pull in driving this transformation. If you look at all the solar going in, I think Google might be the biggest investor in somebody who's listening can fact check me on this email, producers at This Weekend Startups.com anytime you want to fact check us, and we'll give you credit when we do on the air, because we're all trying to to get smarter here. So podcasting's about, right? But, I mean, massive solar arrays they're putting in,

and they do these bonds because they've got hundreds of billions of dollars sitting around. It's like, what incredible thing can Google and Apple and Microsoft do with these just massive war chests? Just vote by building more solar arrays and backing companies like yours. So consumers clearly starting to get it. They're buying impossible burgers or, you know, alternative meats, maybe even becoming vegans, driving Tesla's,

putting in solar arrays, smaller homes, just, you know, everything, which is so great. Capital allocators, how do you think they're doing? When you went out and you pitched this, did you get a warm reception where there are a lot of people to pitch and were a lot of people willing to write a check? I know you've raised, from what I understand, over $25 million. I don't if that funding data is correct from Pitchbook or not, or most recently updated. Yeah, the funding situation has really changed, I'd say, from when we first started four years ago. four years ago it was like everyone was like what the hell like this is weird um well it is weird i mean in all honesty it's kind of weird most most things that are high alpha are weird so yeah

but it was like weird enough people were like eh like clean tech imploded last time you can't be serious this time and then i think sequoia wrote a note that was like hey climate's going to be huge and then fifth wall wrote this really amazing essay where they're like hey you know like if we're actually going to decarbonize FYI that's like 10 to 20 trillion in EBITDA that has to roll over somehow. It's like, whoa, that's like compared to 500 billion a year in revenue for software. We're talking like 100 X bigger market in aggregate. So like that size of that opportunity.

I think people started to like actually wrestle with like, no, it actually has to happen this time. We're running out of time. And so therefore the investment opportunities are huge. So I think a lot of that has shifted in the last few years and there's a lot of excitement about investing in climate tech. So it got easier is what you're saying. It's gotten easier. Yes.

To raise money. And now has it flipped over to maybe? where you have too many funding sources because that's what we saw happen in SaaS software and other spaces like yours, consumer. Has it flipped over to that part where people are like, hey, can we put money and you're like,

listen, we got enough right now. It's about execution. I think there's a dearth of good opportunities. I think if anything, we're probably a little short on like really cool, interesting companies coming into the space. Not that there are lots,

but we could use a lot more. So I do think there's probably an imbalance towards more capital than really, really interesting companies. High class problem. Yeah, for sure. Yeah. I think the, I mean, in general, the venture capital market is like at all-time highs in terms of multiples and everything.

So at some point, that's got a cool. All right. So we got, we could use more entrepreneurs. We got tons of capital allocators. Consumers are doing the right thing. The fourth group, politicians, policymakers, how do we assess what they're doing? Because that's the group that I'm looking at that is infuriating me. they seem to be completely asleep at the wheel at best.

And in many cases, they seem to be, you know, listen, they have to fundraise. And it seems like somebody who's got a coal plant or somebody who's got oil is going to really be desperate and they want to pay people off. And so when you see these people who are anti-Tesla, anti-Solar, and, you know, it's liberals and it's, you know, it's people on the left and the right who are getting bought off by these oil companies and coal companies and the bad carbon companies. What's your assessment there? Because you must have been learning a lot now about regulators, regulations, and politicians. Where do you think they're at in this problem? And what do we need to see change there? Yeah, I'm very early in my learnings about the regulatory space.

It wasn't something that we dealt with in our enterprise software world. No, we didn't deal with consumers and hiring people. Oh, yeah. But I would say my first impression is that basically it's the economy and it's the jobs, stupid, and, like, basically nothing else matters. And so, you know, when we talk about, when we talk, so things like, for example, the explosion of solar, super compelling. Like, solar now has all kinds of tailwinds behind it. Wind, same thing.

And that's regardless of, that's regardless of side party lines, right? Like, Texas is huge for wind. And so, like, I've spent a lot of time in Kansas and Oklahoma over the last few months. Like, it's big for all these things. Iowa is huge for ethanol. So, like, a huge proportion of the jobs and economic benefits of the sort of green, future go to these places that are, you know, historically red. And I think there's a lot of excitement there. Like when I, when I have conversations, it's like, look, we're put, charm is putting

oil back underground with the same hard hats that took it out. And like it's super compelling. And so I haven't found, I have found broad bipartisan support for smart technology that, not just ours, but a whole bunch of other interesting approaches like ocean alkalinity and enhanced weathering and all these really interesting processes that are legitimate options for like a bright future. I think that the idea, though, that politicians are going to come up with solutions, like, that's not the role they play. And so I have gone from thinking that, oh, we need politicians to act so that we can create the opportunities for economic outcomes. I've gotten to think about it in reverse that, like, we need to come up with the technology on the options and the business

models and then help politicians understand, educate them on how they can accelerate those, how they can make them huge and successful in their states and in their jurisdictions. So I've kind of flipped like the order of operations in my head from what I thought more naively that like we need politicians to figure this out to actually we need to figure it out and then take it to politicians so that they can help us scale it. Yeah. Feels like these politicians really need to be held accountable. I was watching this one California politician, Lorena Gonzalez, she's the one who told Elon to like,

you know, something like F Elon on Twitter. Remember that whole Brujah? And it turns out, like, big oil is like her biggest contributor or something. Somebody can fact check me on it again. But like, she's taking all these oil donations. And it's like, really? Is that where we're at? And like, oh, Biden is, you know, big donations from unions.

And he can't say the word Tesla. Like, and he can't invite Tesla to anything. It's like, really, is this the pettiness of our politicians? Is that easy to buy? And like, they're so easily flipped to not be pro climate. Like, it's just, it's so. disheartening these people. Those are both super frustrating cases for sure.

Yeah. I mean, and like, I think what has to happen is, as a society, we need to point this out and be unrelenting in our coverage of it and the hypocrisy. You know, even if you're on the left and, you know, it happens to be a politician on the left who's not acting ethically or morally, you've got to double click on it and just be like, hey, listen, we have to be intellectually honest about all politicians and the nature of them wanting to stay in office. And I think in a lot of cases, they're so addicted to their power and staying in office that they'll take money from anybody to stay in office if it keeps them in another cycle.

That's not what we want. We want courageous politicians who will say no to big oil money. It will say no to not backing Tesla the number one, you know, I think contributor to this movement. But listen, is there anything I didn't ask you that's super important here? Because again, I'm trying to get my legs under me here because I want to start investing in climate stuff. We're going to start a climate syndicate, you know, as a part of the syndicate. We're going to try to find out which one of our investors really care about this. And I want to start making some bets and learning.

So what do I need to know coming into this space that you learned three or four years ago that I could benefit from or things I didn't ask? A lot of the bulk of where we talk about climate is played out from a venture perspective, probably, and is now in the hands of like large-scale infrastructure investors. So like solar, wind, like how do we deploy electric vehicles? Like, these are batteries. batteries. Like a lot of this stuff is stuff that we now, it's shifting to industrial scale. And so that means massive amounts of capex. And maybe its own opportunities around the edges from a venture perspective.

But I think the core plays there, obviously, of like going from gas to electric cars and going from so on, is like, it's maturing. On the flip side, there are like whole parts of decarbonization that are like practically untouched. Like, you know, we have to figure out how to get cows to emit like to burp way less. Yeah. I'm like, there's some shots on goal there, but like, I'm invested in some, but like, I don't know. You know, like, it's by far not a solve problem. And it's probably 10% of the entire problem. There's probably another 10% of the entire problem is like natural gas leaks. Unbelievable. The natural gas leaks are crazy. It's just slowly dissipating into the atmosphere. Yeah. And I think the methane stuff is actually much worse than it looks.

People assume that methane, it like, breaks down in the upper atmosphere. And so people assume like it has a lifetime of 10 years or so. problem is that the way that it gets broken down is actually a constant absolute rate. And so as we admit more, we actually are, its lifetime is going up. And so all of our models are actually off. It's actually much more serious than it looks. So there's a bunch of these like, once you get off of like the top two areas of climate focus that have been the focus for last 20 years, you find like this whole spectrum of like niches that are just completely unsolved that are all like 200 billion to multiple trillion dollars of revenue opportunities. People crack them open. And it all has to change in like 20 years.

So it's perfect for venture. It's perfect for venture because there's going to be so much, you know, spending in this area to clean this stuff up from governments. And consumers clearly have voted with their dollars. They're going to pay $10 for an impossible burger. They could have gotten two, you know, in and out burgers for the same price. Like it's going to tell you something, right? Like consumers, especially these next generations. I guess you were a millennial sort of, you're a millennial, I guess.

I think I'm a little too old. Maybe you're kind of Gen Z millennial, yeah, kind of. a little bit in both. But like you said, I mean, people who are part of these next two or three generations are just not going to want to work on projects that are not meaningful to them.

It's like this great trend. And you're doing that yourself. So really, you know, you have my respect for what you did as an entrepreneur in the first company. But, you know, 10X, now that you're doing this,

because it really is mission driven. And you're helping not just yourself as an entrepreneur, but you're helping everybody and their kids. So I really do. appreciate you doing this and it's good to know you. Thanks for having me out. Who are you looking to hire? I know this is like the hard thing to do in our industry is to find talent, Peter.

You know, I'm sure charm industrial.com has a careers page, I'm guessing, that people can go to. But just give us a little highlight of what's the hardest position to hire for right now? The hardest position to hire for right now is actually environmental health and safety. Okay. This is not a thing that we like, you know, thought about writing, building. an enterprise software company, but it's super important if you're deploying big machines out into the real world and moving around big, heavy things and running hot machines and so on. So super important role.

And some others are like account executive for sales, sales hire. Great. Going and selling to corporate buyers, carbon removals, you know, selling to all the software companies and financial services companies in the world. And then the last is a technical program manager, someone to help drive the program of actually getting hardware out into the field and helping scale of manufacturing. And you can find all of these jobs

and the details of how to apply at charm industrial.com slash team. Once again, charm industrial. com slash team. You just type in charm industrial jobs into Google and just look at the first two or three links. It's right there. All right, listen, Peter, continue success.

Keep us updated. And, you know, in a year or two, let's circle back around, have you back on the pod and see how far you've gotten with this amazing technology and mission. Really appreciate you. Awesome. Thanks so much for having me, Jason. All right. We'll see you next time. Bye-bye.

Hey, guys, Rachel Reporting here. On February 14th and 15th, we'll be hosting Founder University intensive. This is a two-day program for Founders. Now, this course is only open to women founders. We'll be hosting a course open to everyone on May 9th and 10th. You can apply for both at Founder. University. And applications for the longer 12-week Founder University program are due on February 14th, and you can also apply for those at founder.com. Follow Jason and Molly on Twitter at Jason and at Molly Wood. If you're not a boomer and prefer TikTok, search for this week in startups to find the fan account at this underscore week underscore in underscore startups.

And our official account at TWA startups, but honestly, the fan account is way better than ours. And if you're still not tired of hearing from Jason six days a week, you can hear a read his book angel at angel thebook.com slash audible.