This Week in Startups - Sequoia debuts Arc, SEC considering climate disclosures, Disney CEO fallout & more | E1414

Episode Date: March 22, 2022

Monday news! Jason and Molly have some big stories to discuss: Sequoia's new "catalyst" program, called Arc (2:37), SEC considering mandating climate disclosures from public companies (19:21), another Startup of the Day (33:28), and they wrap by covering some interesting ongoings at Disney regarding its new CEO and Bob Iger (41:13). 0:00 Jason and Molly intro today’s news: Sequoia debuts Arc, SEC to vote on disclosures of emissions/climate risks, Startup of the day: Heirloom, Disney's CEO fallout 2:37 Sequoia announces Arc, startup “catalyst” 11:14 Coda - The All-in-one doc for teams, get a $1,000 credit at https://coda.io/twist 12:37 Arc accepting Russian founder applications 18:12 OurCrowd - Check out the deal of the week at https://ourcrowd.com/twist 19:21 SEC to vote on disclosures of emissions/climate risks 32:11 OpenPhone - Get an extra 20% off any plan for your first 6 months at https://openphone.com/twist 33:28 Startup of the day: Heirloom (climate-tech co. using heated limestone to remove CO₂ from atmosphere) 41:13 CNBC reports former Disney CEO Bob Iger and his replacement Bob Chapek have had a falling out since Iger stepped down FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Okay, everybody, it is Monday. We have a weekend's worth of news for you. Okay, and first up, big news from my friends at Sequoia. A shout out to Doug Leone, who just did a killer episode of this week in startups. You can search for Doug Leone this week in startups on YouTube to hear it. Sequoia has launched a new catalyst, basically an accelerator, but probably for seed stage companies, not early stage companies, like Wycombinator, Techstars, and launch accelerator.

And we're going to break down the implications because this is groundbreaking. news for startups. Yeah, and then we have groundbreaking news for climate startups. The SEC, as we are recording on Monday, is discussing and potentially even going to vote on mandatory climate disclosures for public companies. This is huge. Groundbreaking day for sure. And we are sticking to our roots every day trying to get a startup of the day.

And you can submit your ideas for startup of the day to producers at this week in startups. Our startup of the day is in the climate space. And it is a company using limestone. limestone, like the brownstone I grew up in Brooklyn, to take carbon out of the atmosphere. Yeah, this is, I mean, it's such a good climate day, but also we're going to have a little leadership talk. We're wrapping with some interesting ongoings with incoming Disney CEO, the new guy, Bob Chappek, and former CEO Bob Iger, and we break down the difference between the bobs, how new and different management can impact a company. It is going to be a great show.

Stick with us. This week in Startups is brought to you by Coda is the all-in-one doc for teams. If you've got a stack of niche workflow tools or if you're buried in docs and spreadsheets, Coda is the dock that brings it all together. Startups can get a $1,000 credit at coda.io slash twist. Our crowd helps you invest early in pre-IPO companies

alongside professional VCs. If you're interested in investing, you can join Our Crowd for free at OUR-C-R-C-O-WD.com slash twist. And OpenFone. As a startup founder, a lot of mistakes are easy to roll back, but using your personal cell phone number as your company number isn't one of them. OpenFone makes it easy to get business phone numbers for you and your team, right on top of your existing devices. visit openphone.co slash twist to get 20% off for your first six months. That's openphone.com slash twist. So our first news story, I'm super interested in your thoughts about this.

Sequoia debuts ARC, which is a London and Silicon Valley-based program to find and mentor outlier startups. They're calling it a catalyst, not an accelerator. although, as I heard on the Equity Pod with Alex Wilhelm today, it sounds a lot like an accelerator program. What is interesting is a couple of things. One, this sort of outlier founder mentality. They're looking for seed stage companies. And when they seed those companies,

they're going to give them a million dollars each per cohort. And the cohorts will be 15 companies. So a $15 million investment, 15 companies at the seed stage to go through this program where they sort of intensively get to meet CEOs, they get a field trip to a legendary company to sort of see it all in action. Their first on-site visit will be to Klarna, where startups will spend time with CEO Sebastian Simitowski and other executives. And it'll be co-run by Sequoia Partners Jess Lee and Luciana Lysandru. What? Are we worried? Well, this is great.

And it was, we, I just went on a rant. I think it was on VC Sunday school with people complaining about super pro rata. And I said, listen, work harder. Do more work. If you want to compete, please compete. And I said literally, I actually invoked Sequoia. I said, you know, I don't expect to win every deal versus Sequoia if somebody's doing a series B or a series A. And, you know, this competition is great for ultimately founders and ultimately for innovation.

So this is an accelerator. Let's not mince words, but Sequoia does like to, you know, based on my knowledge of working with them, which is pretty deep, they do like to do new innovative things. In fact, the Scout program, which gave me my start in investing, I was the first Sequoia Scout, famously and did a bunch of investments there. I think I did 17 or 18 and three became Unicorns. Pretty good track record. I did the three of the first seven became unicorns.

So they do very innovative things and they like to brand them uniquely. I remember having a conversation with Ruloff and he said, we're going to call it Scouts. And I was like, I want to be called a Ranger. So I'll do it if you change the name to Ranger. This is what an idiot I am. I was like debating this incredible opportunity.

No, I'm not going to do it. I was like, I don't know if I want to be called a scout. And he's like, well, you know, like in baseball, they have scouts. They look for talent. And I was like, okay, yeah, fair enough. So I was like the name Ranger better, but in hindsight, scouts better. You're a content guy through and through, man.

Exactly. I said, the first thing I can think of is the branding. So, ARC is a good name. I like it. It's an accelerator. Another thing I like about this is the size of the program. It's going to be approximately 15. So maybe they'll do 10.

Maybe they'll do 20. Who knows, I guess, they'll look at the quality that comes in. 15's a lot. I would have kept it at 10 maybe. But, you know, they have resources. So the million dollars is great for how much. What's the valuation here? So that's left out.

I don't see that anywhere here. I'm going to guess they do 10. percent of the company for a million? And then what stage are they going to accept people? So they're asking for, you know, outlier founders. So that's branding, right? Who doesn't want to be considered an outlier? We're looking for rebel founders. We're looking for, you know, this is just, you know, kind of like branding and trying to get people to apply. But this is absolutely a shot across the bow of Y Combinator. Because Y Combinator said, we're going to give this 375K note. And I said, you know, when we talked on Sunday, right, Molly?

That gives less room for the other seed funds. And so here, if why combinator is going to move upstream and compete with Sequoia on series A's or seed rounds, and arguably we do that too, everybody's just going to do everything and we'll see if they stick to it. That is, I would say, the hardest thing about an accelerator is being able to keep up the energy to do it. It is hard to do. You've got to staff it.

Jess, I know she's amazing. So I think they've got a great person They're leading it. I like the visit to a legendary company. We do something similar. In fact, we bring our startups to two different venture firms for them to beat them. And I think it's great.

It's great if you're a founder, I would love for the founders coming out of our accelerator to go to this one. And I think why combinator companies could go to this one. So this seems like because of the amount of money being put in, that it would go for more seed stage companies. But you never know.

They might have people who are previous founders who want to do this. and that's probably something that Sequoia heard over and over again as a theme. And by the way, they did use to incubate companies at Sequoia. So like Dropbox famously, you know, was based at Sequoia for, you know, the first year or something after they went to Wycombinator. So I wonder if they had founders who they had invested in or people who were on at companies like a DoorDash, you know, the number seven person at DoorDash. And they said, I'm going to go to Y Combinator. And Sequoia was like, oh, but we could have invested in them, you know.

So if we had a program, we might have been able to give them their first million dollars. So great job of Sequoia, and I wish some great success with it. And then the question becomes, does Sequoia do the next round or not? And then the signaling issue.

So Sequoia puts a million dollars into your company, you go to this one. Then it's time for Series A and you're going to raise $5 million. Does Sequoia doesn't invest? You spent eight weeks with them, 10 weeks with them. What does that say to the rest of the market?

So the signaling problem has always been the issue. And I don't think it's insurmountable, but I do think it's something for founders to be aware of. If we as launch fund and launch incubator stop investing in a company, people don't expect us to fund the company through series A. We very rarely will even co-lead series A as we do, but it's not our bread and butter. So that will be the issue, is that if you go through this program and then you don't get the series A from Sequoia, what does that say? It says you're maybe not good enough for Sequoia, right? Right. And it also raises the question of, is Sequoia going to do something similar to what we do and what YC does?

So yesterday, by the way, on VC Sunday school in episode 1413, if you haven't heard it yet, you almost want to because it is becoming like the pre-reading for this episode because then it does raise it. So there aren't very many details about, for example, what percentage Sequoia takes with that million dollars and whether they have follow-on rights that they take. and I think those are both open questions. But you don't see this as competitive. I mean, I know that like, let's just say if I were not, if I were having this conversation with someone who wasn't, hadn't been a Sequoia scout and didn't have a deep relationship with that company, I'd be like, are they coming for us?

Like, are they on our territory? Because the founder, like, is a founder really going to want to take, you know, however much from us or YC and have 6% of the company locked up and then go to this million dollar accelerator program for some other percentage that we don't know, but I would imagine kind of high for a million bucks. Like, is it really a follow-on accelerator or is it competition? Well, find out. You know, it's a small number of companies, but all is fair in capital allocation. So, you know, everybody should be going after everybody. Everybody should provide products and

services that support founders. That's what we're in the business are doing. And I do think, you know, the real person this is competitive with, and I think this is really a shot across the battle of Y Combinator. I think, you know, people don't know this, but Sequoia saved Y Combinator at one point. Paul didn't have any money, and Sequoia became like a major LP for some period of time and, you know, was a huge backer of YC.

And then YC didn't want to have, wanted to have like maybe not venture VCs because they wanted to have that marketplace. And I think maybe, you know, YC, you know, investing more money in these companies is going to be the future. And I said it, you know, like on the podcast, like, well, why should we invest in, and help mentor a company and then not be able to participate in the seed round? It seems unfair.

So, you know, for founders, they should play these programs off of each other. You should try to get it to Techstar, Sequoia, YC, and Logic Accelerator. And if you get into one, great, do it. If you get into two, pick whichever one you think works better for your startup at what stage it is. And, you know, if you think that's Ycombinator or Sequoia or launch festival, go for it. You know, launch accelerator. Last year, I interviewed Cota's CEO

Shishir on episode 1160, and we spoke about the productivity renaissance going on in big tech right now. And that's what Coda is all about. In Coda, your text and tables live together in the same document. And it helps any team collaborate more efficiently. They've got thousands of templates to work with. Or you can take the playbooks published by some of the best innovators out there and you can use them for yourself. Coda works right out of the box and is

completely customizable. So you're going to create a wiki or a knowledge hub for your team. You can onboard new hires quickly and you can adapt fast to any major or minor change in your business. Here's how we use Coda at This Week in Startups. My Guy Presh made us an upvoting system on Coda for questions and topics for twist. You go to this weekandstartups.com slash questions and you can submit questions and topics that our producers might include in the show. And people can vote them up and down. How awesome is that? And you can go find that template on Coda's website, and you can start your own Q&A for your podcast or maybe an internal meeting you're having. That's the power of Coda. They're going to start you on second base, third base. You're going to be on the way home in

some cases. Coda has an amazing startup program. They're going to help you optimize and support your docs. Just go to Cota.com.comio slash twist, and you're going to get a thousand dollars in credits. I love this $1,000 credit. Codda.io slash twist. Coda.coma.comit credit now. I don't know how long it's going to last. It is interesting, too. I will say one last thing about ARC before we move on is that they are they are also deliberately putting out a

more international focus, which I think is interesting. They're debuting in London. They're saying they're looking for founders from all over the world. They're going to accept applications from everywhere in Europe, including Russia, FYI. Did they say that? Yeah. Wow. Well, I mean, let me think that through. What do you think of that, Molly?

Accept applications for a Russian company or Russian founders, but there would be ones who are not operating in Russia? I don't know. If they, I mean, they didn't really make that distinction. She said, we're going to accept applications from everywhere in Europe, including Russia.

This was Lysandru, I think, saying this. I wonder when she's when that interview was. Great founders come from everywhere. This is in TechCrunch today. Okay. So they specifically asked her about that, given what's going on. Sorry, yesterday. Sunday.

So I guess they asked. So I would say, if I met a Russian founder and they were building the company in London, which I think where this is going to be based part of the time, would I have a problem investing in a Russian founder? No.

Would I want to invest in a Russian founder running Uber and Russia? No. So I think that would be the- That's just a business risk at this point. Yes. Well, there's the business risk. And do I want to support

the economy of Russia during a time when we talked about sanctions having a profound impact? Right. Ice Queen from our notice. gang says they corrected themselves and said only Russian founders who are in Europe, not in Russia. Wow, that's interesting. Of course.

Like, of course, fine. Right? It's not, we're not, we're not doing the full on McCarthy situation. Like, I have a much, I mean, I, not only do I think we should invest in Russian and Chinese founders, North Korean founders, Saudi founders. I actually think America should recruit those founders out of those countries. Exactly. And bring them to the West.

Because every time we take some legendary world-class mind, founder, ambitious person out of those countries and put them into America where they can be free to pursue stuff without being worried about their company being taken from them by the authoritarians that run their countries, that builds up our case for democracy and freedom. And it builds up our balance sheet. So I think that should be, that's like the most American thing I think a fund could do. or a college is to recruit the smartest people. And we should go on, that should be like an American imperative. New imperative. Get the smart, ambitious people out of those countries as quick as possible. Okay, here is a story that I know.

Any other questions or on the Sequoia thing? Congratulations to Sequoia. I think it's great. Congratulations. We've got to find out. Yeah. We love it. I would like to find out what the percentage is because I wonder if they're going to negotiate

each million dollar deal as if it's a seed round. So what this would, I think that's what they're doing actually. Now they think about it, I think they're doing seed rounds. Their priced rounds, basically. I think they're doing, well, they put a cap on whatever. So you could say, I want $8 million. I could say I want $10. Another person could say $12.

Another person could say seven. So if they're actually doing that and then that's the accelerator, great. And then what is the goal of the accelerator to raise money to finish their product, to build their team? Company design, which is the part of it. That's the other kind of interesting wrinkle here is that it's super focused on this idea of company design, like how you put together the company. Right, which is what we do.

a big part of what we do. We basically have them build plans, which I got from Doug Leone. Doug Leone taught me, hey, build a plan and I have all of our founders build a plan. So I love the fact that they're doing it.

I love competition. It's fantastic for everybody. Well, I mean, pricing each round would be, pricing each round would be very innovative because when you run an accelerator, if you open up the can of worms of everybody gets to negotiate their deal,

it's just chaos. So we don't negotiate those deals. And if we say, if you want to negotiate a deal, and you want to start the funderating process, let's just move you over here to doing a seed round and not coming to the accelerator. Because then you'd have people, you know,

sitting in the same class and one person negotiated a deal twice as good as the other. And, okay, that means we, you know, think twice as much of that founder because they're a better negotiator. It's just a little bit hard to manage that. But if it's a seed round, they can easily manage it.

So if it was a seed round with an eight-week architecture of your company, I would say this isn't competitive with YC Techstars and launch accelerator. I think that might be what's going on here. Interesting. Okay. See, yeah, I'm glad we're getting to spend a little more time on this because, yeah, it does feel, I mean, details are slim, right?

I read their blog post and it is, they don't say anything about percentage. They don't say anything about round. They don't say anything about how they're going to treat each individual company, but it very specific, I feel like given the money involved and the specificity of the program, it would make more sense of it is. I can tell you what I'm doing. And they're saying it's seed stage. They keep saying seed stage over and over.

Oh, okay. So then that's what it is. So I can tell you what the first thing I'm doing after we stop taping this podcast is I'm going to DM Jess. And I'm going to say, hey, here are three companies from our accelerator that I think would be perfect for your arc program. I look at this as graduate school. So if we're undergrad and this is grad, this is like me running, you know, like a really good undergraduate school. And like they're, you know, Oxford or something, some graduate school. and I'm like, yeah, let's send our smart kids there.

That would be amazing for us because a lot of our friends. That's what I was wondering about the best friends thing is like how can we be a feeder? It's like Harvard to GSB or whatever. Harvard to GSB. Look at you. Hey, it's time for another R Crowd deal of the week right now. You can join Our Crowd's investment in D-I-D. According to the deal memo, D-I-D has patented reenactment technology

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number one, greenhouse gas emissions from their own operations, two, emissions from energy they consume, three, which I guess would be energy coming into your power plant and where the emissions came from, and to obtain independent certification of their estimates, okay, there's going to be a good business for something like Ernst and Young. And in some cases, companies would have to report greenhouse gas output of both their supply chains and consumers, known as scope three emissions. Wow, the downstream and the upstream of their emissions, sounds very comprehensive. The SEC started considering the proposed rules in a meeting on Monday morning. Companies would have to include the information in SEC filing, such as quarterly and annual earnings reports. Currently, the SEC's four commissioners include three Democrats and

one Republican. The lone Republican is Hester Pierce, who was on episode 1136 back in November 2020. She's very pro-cropo. What are your thoughts? And then we'll get into some more details. is huge. So I, when I was at GreenBiz, this conference in Phoenix a couple of weeks ago, I don't know, time has no meaning. One of the sessions that I tried to go to was about SEC reporting requirements. And it was beyond standing room. Like if people could have taken out the door with a sledgehammer, they would have because this is the market maker moment right here. So a lot of companies have been pitching me on various measurement techniques, right? A dashboard for this and a way to measure school three emissions.

Yeah, there are tons of them. And the reason that there are tons of them is because they know that there is going to be some kind of requirement like this. Europe already has reporting requirements around scope one, two, and three emissions. And those are, you know, as you describe them, the ones that you directly emit is scope one. effectively the type of energy you consume is scope two and scope three are these kind of like big broad what's in your supply chain what do your employees do how do they get to work stuff like that that's harder to measure the second that rules like this come into place businesses are going to be born like you cannot believe like they're already planning for it they're already

pitching around this they're already saying if you're a big multinational you're having to do some of this anyway, or like your, you know, LP and a venture capital fund is saying, hey, you told us that your portfolio was going to be such and such percentage carbon neutral. Where's the proof? Yes. And I just, I think this is like, this is what jumpstarts economies. Yeah. And so according to the Wall Street Journal, SEC chairman Gary Gensler mentioned in the past that investors and institutional asset managers representing tens of trillions of dollars have asked the SEC for standard climate disclosures in the past companies had self-reported climate impact data on their own accord. You see that with Apple all the time. And Google buying all these solar farms, they are

proactive about it, I think because of founders and management. And the disclosures were always inconsistent from company to company, making them hard to compare. So if all this becomes standardized, of course, you know, that will help if you measure it and you can manage it. Of course, it could lead to gaming it, but it's going to lead to, I think, overall, more awareness of this, which is always good if a majority of the agency's four commissioners vote in favor, which I guess would be three. The SEC will open the proposal to public comment for at least two months before working to finalize a rule.

So that would be great. We can go take a look at that. The SEC does move very slowly on these things as we learn from things like the Jobs Act, which allowed more crowdfunding, equity crowdfunding and accreditation. The SEC is very, very, I guess, slow. or charitably thorough. Yeah. They really take their time on these things like years.

And sometimes they even have to be pushed by, you know, Congress, I guess, to get these things done. But it seems like a good idea. And it doesn't seem like any public company would be too much of a burden. And I'm sure they could do this over time. In other words, like, hey, this year we want you to report them. this year we're going to review them and then this year we're going to audit them

and so when you're executing on these things the devil's in the details and I do like the idea of companies also being responsible for upstream and downstream I thought that was the most interesting part of this what do you think of that piece of it having to at least maybe not take ownership of but at least be aware of what happens

when your product goes to your customer or when you bought your batteries or you bought your inputs, whatever they were, just having to know, like, was that built in some factory in India, Pakistan, or China? And what is their view of throwing carbon into the, you know, atmosphere? Yeah, absolutely. I mean, there are a couple pieces of this that I think are crucial.

The measurement of the scope three emissions, like, has been a, you know, way that companies tried to get out of accurately measuring anything for a long time, right? They were like, our campus uses, buys offsets, or our campus has solar and we, you know, our actual like on site, we recycle this much of our trash and then never acknowledged like we're in a, you know, coal fired factory in China or we're using like the least efficient, you know, airplane, like cargo planes instead of ships or something to get our goods here. There are a couple, like one, Europe is really pushing this. This is one of those situations where the SEC is moving because Europe already has. And because this is starting to become a

conversation about investment and also risk. So I wouldn't be surprised if at some point we also see the Fed move in this direction because they have made, you know, Jay Powell has made some like baby comments about how it is very possible that there need to be requirements around companies to report their actual financial risk related to climate, whether that's because they're in danger of losing entire facilities to excess weather events or because, you know, they have people who live in like fire prone areas who, I don't know, can't work. They have productivity issues. Like there's a lot of financial risk that goes into addressing climate. So the fact that we're seeing movement on these two things are, it's a big deal. And it's, look, for us as investors,

it's a huge deal because policy drives markets. Governments become buyers. Policy incentivizes companies to get in the game where previously they wouldn't have had like a good reason to get in the game. What's an example of that? Like if this was, you know, we fast forward three years, this is a standard. This stuff is audited. Yeah. You know, and it's costing, you know, these public companies, whatever, a million dollars a year, two million dollars a year to do this.

Putting aside that like there's some industry in preparing these reports, what would be if you think it through an example of a company having to change their behavior some meaningful way because of this? As a result of this kind of reporting? Yeah. I mean, there's sort of big, right. I mean, there's big and small. There's one, you might have to actually start buying either renewable energy offsets or like get solar on your building. That's the like super local.

Scope three, though, you might have to change factories. Like you literally might have to use a different manufacturer to create your products. Like it could really have major impacts throughout the sort of like global supply chain. Or you start emphasizing shipping over air freight, but shipping. but shipping is really expensive, so your costs go up. Like there's sort of a lot, it's a complicated ecosystem for sure. Yeah, I think that's really interesting. You brought up shipping because what came to my mind was, okay, the press decides,

here are the biggest defenders. Here's our top 10 list of the people who are doing the worst job possible. And here are the 10 people who had the best climate responsibility over year over year. We talk all the time here doing back of the envelope math. We're going to be able to do back of the envelope math and say, hey look, Uber was talking about their inputs and their outputs and Lyft and DoorDash. And one of their things is their drivers. And what percentage are using hybrids?

What percentage are using EVs? And they have inputs, the restaurants, fried the food, whatever it is, cloud kitchens. So now you would have people starting to do the press stories about this. Here are the people who are the big offenders. Okay, now we're on the big offender list. And now some, you know, Greta Thunberg, you know, comes. out or whatever the next person is. And they're like, we're going to sit on the front porch of this company and highlight the fact that they suck and they need to suck less.

And they need to start sucking carbon out of the atmosphere. And then that person goes, you know what, they're, hey, I heard that startup on this wing startups that's taking kelp and putting in the middle of the ocean. Can somebody just call them and give them $25 million to put some kelp out there so we can get off this goddamn list of, you know, being one of the top 25 offenders. And the other one I thought of was transportation like you were talking about. Okay, yeah, Flexport is tracking all

this stuff and, you know, there's a series of ships that are using that old oil that Ryan Peterson talked about that is just like this slurry mix that just pollutes the air. I forgot the name of this oil from ships, but they basically use one type of fuel to get out of port that's not so polluting.

And then when they're in the open ocean and nobody's watching, they just spew this disgusting horrible oil slurry that I can't remember the name of. Anyway, that slurry that they have, they'd be like, you know what? Let's find somebody without the slurry. And then they'd go to the ships that don't. And the ships that don't have it wouldn't be used. And they'd say, you know what?

Okay, we'll upgrade the engines because we're losing business. So this, I think, could have wonderful impacts of just raising awareness. And I like it. I like it a lot. You also start to get related to that, actually, you start to get the concept of, you know, you get sort of carrot and stick. Like this is a little bit, this is like, you need to report this stuff. Pretty soon you could start to attach sticks to that.

Like you could start to say, hey, you're a climate criminal. Like, we're going to create a, you know, new jurisprudence around this when companies continue to like flout the law and do whatever they want. And it just like these are the, these are the boring bureaucratic moves that actually have massive, massive, massive impact. So I got very excited about this story today because it's a big deal. And it's bunker fuel is the stuff that ships. Bunker fuel, that's right.

Bunker fuel. Container ships uses a super dirty fuel. Talking to a company that is interested in measuring emissions from ships on a ship-by-ship basis and helping them understand that because it's also a competitive advantage. Like you don't want to waste fuel. Many cargo ships I'm reading from wire still use bunker fuel, the sledgey drags of the petroleum refining process. Floodgy drinks. The noxious blend.

The noxious blend is dirt cheap, making it possible to charge next to nothing to ship goods internationally. So there you go. It's like literally these are the dirtiest vehicles in the world are this horrible bunker fuel. And like how we have not banned it is because these ships are, you know, Chinese or from countries that don't care. Chinese companies. I don't know. They have a different worldview. And, you know, well, who knows?

Somebody can fact check me on that. But I think, you know, the developing world maybe sees. I think anybody who can go cheaper is going to go cheaper. And this is why these regulations start to matter. And so do carbon taxes because it won't be the cheapest thing to use the sludgy dregs. Yes, because the shell game of, well, we just outsource that to a company. We didn't know. I mean, we don't know what they're using, you know.

And now it's like, well, you do have to put your inputs. So if you got, that's, you know, if your iPhones came here on one of those, well, you know, you now have to put that in there. And I wonder if Apple actually, and all these iPhones coming from China, if Apple is letting slurry ships, you know, slurry fed ships, ship our Apple products here because they want to save a dollar per phone. But this is great. You know, it's one of the things I love about having you here passionate about the climate stuff is I'm learning. And scope three is really, really. cool that they can start looking at the inputs and the outputs. Listen, lots of founders are Lucy Goosey with their personal numbers.

We all know that. They put it on company documents. They use it for sales calls and more. And that's where things get super messy. You don't know who's calling you, right? Is it a sales prospect? Is it a coworker? Or is it somebody from your kid's school?

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This is super related. So today's startup of the day is heirloom. It's a climate tech company which uses heated limestone, remove carbon dioxide. What from the atmosphere? Explain this to me. Jason's like, magic. Wait, I, limestone? I grew up in Bay Ridge, Brooklyn. There were brownstones and there were limestones. And they would put limestone on the front of the buildings because it was beautiful and I don't know the rest of the history of it, but I grew up in a limestone. Wow, really? Yeah. Could have been a carbon sink. This is, yeah, this is amazing. It's heirloom like the tomato,

spelled like the tomato, but it is a carbon capture company because the big, the big secret, the dirty little secret about a lot of our climate goals, like the net zero goals that the world has agreed to, they actually depend on technology that does not yet exist to capture carbon dioxide from the air and store it somehow. We are currently unable to do that at scale. I think Elon Musk funded a contest to reward a company who could come up with the most efficient direct air capture. So there's a couple ways that people try to do it. One is like capture the emissions as they come out of a plant,

but another is to try to suck carbon dioxide out of the air and store it somewhere. It's a super hard problem to solve. This company announced a $53 million series A from Breakthrough Energy Mentors, which is the Bill Gates Fund and Microsoft Climate Innovation Fund, to try to do this capture, suck it out of the, air and then they use limestone which is cheap and widely available they heat it super hot 600 degrees in electric furnace powered by renewable electricity electricity that's key the process then releases carbon

dioxide which is captured the leftover calcium oxide is spread out i'm just going to go through the technical details here spread out in these trays that are stacked 20 feet high and exposed to the air like cookies on a baking tray and then over this long process months to years calcium oxide gets converted back to limestone as it absorbs carbon dioxide from the air. Amazing. Yeah. It's very so and and you know, you know that my metric is gigatons, right? I like to talk about like don't talk to me about tons or even hundreds or millions.

The California based startup plans to remove one billion tons of carbon dioxide at gigaton by 2035. Amazing. Possibly. I think this carbon capture. I have questions, but possibly. You know, and the X Prize is running the $100 million prize for carbon removal that Best E, I guess, underwrote, which is super cool. Teams of people, here's how to win. To win the prize, teams must demonstrate CO2 removal at the 1,000 ton per year scale, model costs at the million tons per year, megaton scale, and present a plan to sustainably reach gigatons.

ton per year scale in the future. In the first phase of the competition teams must demonstrate the key components. And I guess the number I want to know is how many gigatons do we need to remove? 50. 50 gigatons. 51 to zero is what we're looking at. 50 per year. Yeah.

Currently, we emit 51. Oh, okay. Gigatons. So you're saying we could be carbon neutral if we took 51 gigatons out. Yep. Got it. So here's just another. That's like the Bill Gates metric, as he calls it, 51 to zero.

So there is putting less into the atmosphere and there's taking out. And we should be going for big, big swings at both. Yeah. This is a big swing. This is potentially a big swing. Now, what's interesting about this process is, and this is also in the Bill Gates book, it's a really, everybody should go read, I can't remember what it's called, but the climate book that Bill Gates wrote is just profoundly digestible.

You know, it's just like a really easy one to get the, big concepts like 51 to zero. And it also lays out, and plenty of other works on climate have done this too, that there are a couple things to look at when you evaluate a new technology. And of course, cost is one of them. Thank you, Nick, how to avoid a climate disaster. Like, does it cost more than the existing solution? But also the one of the big questions is how much space does it take? How much physical space does it take to do this at scale? And so when they say, oh, okay, so we have these huge baking trays of calcium oxide, stacked 20 feet high and exposed to the air. And then we can pull out a gigatone in 13 years.

One gigatone in 13 years, and I don't mean to be disrespectful about a pretty remarkable technology, doesn't get us that far. So like, how do you scale this without needing massive amounts of land and getting those gigatons out faster? Right. So all of these is about scale. All of these become scale. We know that you can take carbon out of the atmosphere.

Carbon sequestration. Sequestration. Yeah. Sequestration is proven technology. We can do it. We need to figure out how to do it at scale and have the energy it takes to take it out of the atmosphere not cause more damage. Yep. Right?

So like you could burn coal, I guess, to run these fans that pull it out or whatever. But that's not helpful because you're burning more than you're taking out. They're using this furnace that's powered by renewable electricity. That's great. It's also renewable electricity. Like that is it, I talked to this really interesting company that's like pre-seed right now. But what they're doing is they're creating a manufacturing technology that's purpose built for cheap renewable energy, which isn't always consistent. Now I'm just nerding out.

But you know how like solar and wind, the sun doesn't shine all the time. Of course. So they're like batteries. And then batteries, there's a carbon cost to building batteries, right? They're literally creating a process that's purpose built for intermittency. Got it. And so, like, if these guys were doing that, if they were like, we know that there's intermittency, but we have designed our process to work around that, that's like, it's,

again, it's like layer stacked on layer, stacked on layer, kind of like these baking trays, ha-ha, accidental metaphor. Anyway, love it. I love that it's happening because we have to have this. We will not. And, you know, like message to Germany, if you want to turn off all these nuclear power plants, well, why don't it to leave them on and let the carbon folks. who are doing this sequestration, set up camp there.

Yeah. So they could have like really cheap energy because these things are already paid for. I saw a story over the weekend that made me think of you. Who is it? It's a Belgium. Belgium's going to extend the life of its nuclear reactors by another decade. I'm just a super pragmatist. And, you know, I was actually going to make a note of this at the beginning of the show.

We are going to talk about Ukraine on the show, but we're also going to keep talking about other things and our hearts, prayers. wallets, everything are, you know, obviously thinking about and praying for the people of the Ukraine. And that this resolves itself quickly. And it's beyond our mandate to sit here and talk about politics. You want to talk about politics? I have another show you can talk about it on there. Or there's a lot of other places. But we will talk about things in relation to Ukraine.

We have to be able to do more thing, more than one thing at a time. We really do. And nobody can afford to put the climate crisis on hold among the other. Exactly. Yeah, like there are thousands of people dying in, you know, this war and other wars. And then there's also the existential threat of millions of people dying from climate. So we have to fight many wars, sadly, as humans on planet Earth. Okay, longtime Disney CEO, Bob Iger and his replacement, Bob Chapman, have had a falling out, according to sources since Iger stepped down as CEO.

CNBC reported this. They said they noted a dozen anonymous sources spoke to them for the article. I hate this anonymous sources stuff, but generally CNBC has a pretty high benchmark for this. And they took a, made a point of putting a dozen up there. So hopefully these are sources inside the company. I would give CNBC the benefit of the doubt. I think you have to think about every publication. I might not give that to, say, Business Insider or Huffington Post, but I would to see NBC based on their track record of getting things right. According to the story they're saying, Iger was an EQ genius, a warm, great leader, people person that seems on track with what you see publicly from him. and reading his book

and the fact that he was able to manage talent and also manage the talent that own the IP that he wanted to buy right of a lifetime great book to read about this. Chapic is a great operator but according to sources, not especially a great people person at least when compared to Iger.

So there's been some backlash over his decisions that we'll go into later in the story. There was the public spat over Scarlett Johan. Johnson's contract lawsuit and consolidating all the P&L sheets across all of Disney's entertainment branches under one group, which people always hate. And that was Scarlett Johansson's contract for Black Widow. It seems like there are sort of two things happening. One is Chapix management since he took over, but the other is the origin of the spat, which is, you know, as we know, Bob Eager stepped down as CEO in February 2020.

he intended to continue on at Disney as an executive chairman and direct creative projects. It sounds like, though, he just has had a really long goodbye. So a few weeks after he stepped down, COVID hit, the park started closing, and Ben Smith at the New York Times interviewed Bob Eiger, who essentially said, you know, this is a huge crisis with its impact on Disney. Obviously, I'm going to have to actively help Bob Chappick, new Bob, Bob, too. and the company contend with it, particularly since I ran the company for 15 years.

Now, let's compare and contrast Bob Chappek's response to, let's say, our bestie Barry over at Peloton. Because by this, according to this account, Bob Chappick had like a shit over this. Really? Yeah. This is what caused the rift. Is Bob Iger saying,

I'm going to stay on and help you run the company during, this massive crisis. Now, there were a couple ways for Bob Chapic to respond, right? One is, thank God. Nothing like this has ever happened before. I welcome all of the input from the guy who ran this company for 15 years, who's beloved. Great. We are going to do this together. And then you, you know, you're like, look, you, you're feeling out your office, you're peeing on your territory. Like, I get it. You want this job and you've worked a long time for it. But evidently, you just could not take this. He was so, I don't know. I mean, he got tweaked by it. maybe insecure, yeah, you got so tweaked by it that their relationship has deteriorated

ever since. Huh. That's strange. You know, that reminds me of what happened with Ben Simmons at the, in the Philadelphia 76ers where the, you know, Embed was like, here's all the things that went wrong in the game. And yeah, we missed the layout was like one of the 10 things that Embed pointed out of why they lost that game. And that tweaked Ben Simmons and he said, I'll never come back.

So people are very sensitive. these days. But if they're saying, if Chapic is not, if he's a hardcore guy with low EQ, then maybe he would just be like, yeah, whatever,

he's helping me. You know, like, what does he care? So he doesn't seem like he's like a snowflake or like some, you know, a really soft person,

but maybe like you're saying, Zigo was bruised or something, but it seems like a super overreacting. But, you know, this is like the he said, she said, nonsense that like,

who knows what happened? We have no idea. We have no idea. Iger. Bob one had postponed his retirement three times already. So if you put this in succession terms, right? He's Logan Roy. Bob Iger is Logan Roy.

Yes. And Kendall is there waiting for the job. And he keeps on not leaving. And then finally, he gets the job. And then Logan Roy is like, I'm back. You know, so you certainly, you could understand why that would be difficult. However, it has just continued to get worse and worse. And then on top of that, you have these sort of moves by Chapek where people don't think he has good EQ, where there was that kind of like pretty ugly stuff about Scarlett Johansson and her contract about Black Widow.

And then also, and I personally think this is just like a kiss of death move as a leader, the ultimate king move of taking away that P&L from each individual division and centralizing it under one. I mean, that's like business weeds, I know, but having worked at several house of brands, that's a mess. and it makes people furious because you effectively say to a bunch of grownups who are running their own businesses within a business, sorry, no, we took that all the way. It's a stupid move. When you're running brand IP,

you need to let people have excellence in units. So as an example, AOL bought Engadget, auto blog joystick, and other blogs, and they had also bought TechCrunch and a couple of other brands. And they were keeping it together that when Jim Bankoff left to start Verge, they started consolidating everything

and doing this exact thing. Condi Nass learned long ago you give Vanity Fair their own floor and you give Vogue their own floor and Vogue has one culture and Vanity Fair has another and the New Yorker has another and they're like three independent organizations they have their own accounting, they have their own HR,

whatever it is. And I don't know if they exactly have HR and accounting but they have their own cultures and ways of operating and they're not forced to be under the same P&S or whatever. This is what like authoritarian CEOs want to do. It's just turn creative people into widgets. It doesn't work.

No. Because they then become like, well, why should I put any work into this if it's just going to be the corporate overlords are going to just roll me every time I want to do something interesting. I'll give bank off a lot of credit. He seems to have kept, you know, at Vox and Verge. He's got a sports thing over there. I think SB Nation is his.

and, you know, all these different networks. He had curbed for a while. They did consolidate, I think, some things into New York magazine when they merged with it. But he's been able to keep these brands somewhat independent, right? And I think it's a real art to do that. So you really want Marvel and Star Wars and Pixar all doing their own thing, having their own five gems. And then you get to have five great leaders in charge of five different sets of IP.

That's better for you. Because then if somebody does a great job, the other people can look at what they did, copy them. If somebody's not doing a good job, you fire them, and it doesn't affect the other four units, all that kind of stuff. It's just easier to manage. So it does require, though, spending more money per unit because you need to have redundancy.

You have duplicative. Duplicate, you know, for sure. People. So, but if you put the same person in charge of the Star Wars franchises as Marvel, that person is going to be like, Marvel's working Star Wars citizen. I'm going to just start working more on Marvel. and the person working on Star Wars doesn't have to sink or swim.

You want people to sink or swim. There needs to be one person in charge. The buck needs to stop. So what they should be doing is naming the CEO of Pixar. They should be doing the opposite. If I was running it, I would have a CEO of Marvel. I would have a CEO, not president, CEO, which is what they did with Susan Wojewjecki at YouTube. They gave her the title of CEO for a reason.

That thing was so freaking big and was such a juggernaut. They said, okay, we'll give you the CEO title. That's the power move. They should be a CEO of whenever a unit hits some level of scale, make a CEO. And then the Scarlet Johansson one seemed particularly lame because this was the first time, I believe, they did a standalone with a female lead. Am I correct in that? Breedarsum was in Captain Marvel.

It was less about that, but it was sort of more, I mean, it added a layer of particular horribleness to what was a pandemic-induced decision in some ways, right? So they said the studio, because they released Black Widow simultaneously on streaming and in theaters, and her pay was dependent on box office performance, she sued and claimed that the studio sacrificed the film's box office potential in order to grow the Disney Plus streaming service, a decision partly driven by the pandemic. and then Disney was like, no, you got paid $20 million. Yes.

And like, yeah. So it just didn't, it just was a bad look all the way around because it was sort of like, well, that's probably less than everybody else got paid. And also they just handled it very poorly and very publicly. And it was just sort of a pile on of bad decisions. Yeah. And you know what? They didn't even get credit for the fact that they gave her this, by creating this tension and not settling it quickly and quietly.

she got paid the same. I just looked it up as Captain America and Thor. So yeah, and I'm looking at that right now. They basically paid her the same as Evans and Hemsworth for their single, which makes sense in today's day and age. Like, why wouldn't they? And then they should get some base pay and then it should be performance. And so if more people see Black Widow than or Black Panther or Thor,

like, you know, there should be some bonus based on performance. So it makes total sense. Nobody can argue with that. They just change the performance metric by putting it out on streaming first, since the performance metric had always been box office. But now what they put in people's mind, I think, Molly, you tell me if your mind goes there. Because when there is a vacuum of information,

people's minds will go to dark places, and some people will be charitable and go to a positive place. Given the history of pay discrepancies in Hollywood, most people's minds would reasonably go to a darker place than a charitable place. And so I would say, in my mind, and I'm a pretty positive thinking person, would they have done this to Ironman? Would Robert Downey Jr. have to fight for his money like this? I think the answer is no. Now, I also understand that he's a better actor than all of them, and he is the anchor and all that could be true.

But I do think you have to, this is where the EQ might come in. Exactly. There's been a history of incredible pay difference. differences. And, you know, sometimes it might be based on boxers, but other times it might not be. So you have to take that into account. That was my reading of it. Oh, no, absolutely. I mean, these, I, to me, these are all of a piece. These are all chunks of the same story. Like, you take away P&L from division heads. That's the ultimate, like, king move, right? You want to get rid of siloing, find a way to do it. But being like the king is bad. You get so, like, tweaked and triggered by

Eiger, you know, effectively offering to help you. Sure, he hasn't gone away for a long time, but there's a way to handle that without ruining the entire relationship. And then finally, instead of understanding all the layers that go into something like this, like, sure, Scarlett Johansson got paid $20 million, the same base pay as these co-hosts, but the back-end pay is all based on box office performance. So you acknowledge, hey, this is a really tough time to be making a decision like this, because we know it could look like this and we want to reassure Scarlet and everyone else that this is not about inequity.

It's a hundred year pandemic. Da, da, da, da, da, da, right? And instead of just being like, she got paid the same. What's the problem? Like, it all adds up to a portrait of a guy who isn't that good at people. And what I actually find super interesting, like on top of all that, the cherry on the cake is like, Bob Iger picked him. That's his hand chosen successor. Yeah.

Well, he ran parks. I think this guy had run parks, which is a. key piece of it and he's an operational machine. So I think maybe the thinking was he was Tim Cook-esque and would be a good like steward of the brand. Maybe he doesn't close the

Pixar deal, but maybe he doesn't also have the iPhone not ship on time. You know? Or have supply chain issues. So I think a lot of times and you have to look at Eisner took this company. I think it was like a billion dollar company when

Eisner took it over and they were doing stupid stuff. Eisner made it unbelievable. He, you know, 10, 20, 30 X the market cap. But he was against the Pixar deal because he and Jobs couldn't get along and he didn't want to concede that Pixar had beaten Disney animation, which was obviously it had. And then it took Eiger to come in and create a super aligned, a super alignment with jobs and a lot of humility to get to pace with jobs and really connect. with him to get him to sell it.

And once Pixar had sold, it made it easier for Lucas to sell because he saw Pixar and Marvel have great outcomes. And Lucas then was like, okay, I can trust them with my baby. I want the cash before I die kind of situation. But remember,

Iger wasn't Eisner's choice. Eisner was going with Ovitz, the ultimate dealmaker. And that would have been pretty amazing because I wonder if Ovitz would have gotten the Pixar, Marvel, and Star Wars deals done sooner than Eiger, or if he would have been, you know, worse. He's the ultimate dealmaker. So we'll never know these counterfactuals, but I think the

history of Disney needs to be made into, this would be the ultimate series. Somebody needs to make a Disney series not approved that goes from Walt and like an anthology series from Walt Disney creating it and then time splicing it back to Eisner to Ovitz to Iger and back and forth Marvel and just show that arc over you know that could be like fascinating an amazing you know the 1940s to 2020s how many years is that 80 years of Disney? Marr oh my lord fascinating I mean you got a real they are also the company that effectively like invented IP as a weapon so you got a little bit of an IP issue with wanting to do this, but I do like it. No, no, no, no. You can tell any historical story. That's true. You know what? This would be a great thing for us. I always love the acquired

FM guys doing these like two hour episodes where they explain the history of a company. We should do our own week where we do each decade and do like a eight decade retrospective of Disney, what they accomplished each decade and we'll just read all the books and like walk phenomenal. And then boom, we've created the IP for the show. That's it. Oh,

look at us IP. Mm-hmm. Look at us being a little, like a studio, a little pipeline. I mean, a little studio over here. It also like,

just as a company building to go all the way back to our Sasquia's story, like as a company building exercise, it is such an interesting, uh, example of all of the ways in that leadership can actually be a make or break.

Like how you structure your company, how you think about empowering leaders. Like Amazon, single-threaded leader thing compared to, you know, consolidation of divisions, like EQ versus IQ. It's just all in there. It's freaking fascinating. Hey, everyone.

Producer Nick here. I want to tell you about the SaaS Syndicate. If you're a founder of a SaaS company with a product and market, our investment team wants to talk to you. Head over to the syndicate.com slash SaaS, S-A-A-A-S, to apply to raise from the SaaS Syndicate. and you can join Jason's syndicate of over 9,000 accredited investors at the syndicate.com. Producer Justin here, no cool startup.

Check out openscouting.com, where anyone can refer a startup to our investment team here at launch. Even if you don't know the founder, if you're the first to flag a company for us and we decide to invest, you'll get 5K in cash or 10% of our carry. Hey, everybody, producer Rachel here. Are you an early stage startup that has product and market, some traction, and are looking to raise at least $500,000. Apply today to Remote Demo Day for your chance to pitch to over 9,000 investors in Jason's syndicate. Submit your application at Remote Demoday.com.

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