This Week in Startups - Steve Jurvetson and The Metals Company on Ocean mining, EV market growth, and AI's tech impact | E1959

Episode Date: May 31, 2024

This Week in Startups is brought to you by… Eight Sleep. Good sleep is the ultimate game changer. The newest generation of the pod, the Pod 4 ultra has arrived. Head to eightsleep.com/twist and use code TWIST to get $350 off the Pod 4 Ultra. Mercury. With Mercury, you can simplify your financial operations with banking and software that power your critical financial workflows, all within the one thing every business needs, a bank account. And with new bill pay and accounting integrations, you can pay bills faster and stay in control of company spend. Apply in minutes at https://www.Mercury.com Northwest Registered Agent. Start your business fast and secure with Northwest Registered Agent! In just 10 clicks and 10 minutes, set up your entire business identity - name, address, mailservice, phone, email, website, and domain. Everything You Need to Launch Your Business in Minutes! For $39 business formation visit https://www.northwestregisteredagent.com/twist * Todays show: Steve Jurvetson and Gerard Barron join Jason to discuss the growth and challenges of the EV market (1:50). Then, they discuss TMC’s involvement in polymetallic nodules and robotic vacuuming for ocean nodules (15:34), the geopolitical aspects of deep-sea mining (40:50), and AI’s impact on technology (52:01). * Timestamps: (0:00) Steve Jurvetson and Gerard Barron join Jason (1:50) EV market growth and challenges (2:42) The mission of The Metals Company (5:54) Gerard Barron explains polymetallic nodules (13:59) Eight Sleep - Head to https://www.eightsleep.com/twist and use code TWIST to get $350 off the Pod 4 Ultra. (15:34) Robotic vacuuming and ocean nodules (19:17) Environmentalists' perspectives on ocean mining (28:16) Mercury - Join 200K startups who use Mercury to operate at their best at http://mercury.com (29:47) Deep dive into VC with Steve Jurvetson (36:16) Northwest Registered Agent - For just $39 plus state fees, Northwest will handle your complete business identity. Visit https://www.northwestregisteredagent.com/twist today. (40:50) Geopolitical aspects of deep-sea mining and future outlook (52:01) The age of AI and its impact on technology * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Check out The Metals Company: https://metals.co * Follow Gerard: X: https://x.com/gtbgtb LinkedIn: https://www.linkedin.com/in/gerardbarron * Follow Steve: X: https://x.com/FutureJurvetson LinkedIn: https://www.linkedin.com/in/stevejurvetson Check out: https://future.ventures * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Thank you to our partners: (13:59) Eight Sleep - Head to https://www.eightsleep.com/twist and use code TWIST to get $350 off the Pod 4 Ultra. (28:16) Mercury - Join 200K startups who use Mercury to operate at their best at http://mercury.com (36:16) Northwest Registered Agent - For just $39 plus state fees, Northwest will handle your complete business identity. Visit https://www.northwestregisteredagent.com/twist today. * Great 2023 interviews: Steve Huffman, Brian Chesky, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis Follow TWiST: Substack: https://twistartups.substack.com Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups * Subscribe to the Founder University Podcast: https://www.founder.university/podcast

Yeah, let's ask the guy who's broadcasting from his bathtub about this. I just want to point out how we're about half an hour into this. This is deep see, baby. He's just doing a soap. Deep soak. He's soaking in a tub right now. There's no water in it, but I don't know about your investment here, Steve. Either this one's going to the moon or you've, I know.

I think it's the eccentric ones. Steve Jobs probably did an interview from this hot tub at some point. With some care of fun, eating fruit with no deodorant for three years, yes. This week in startups is brought to you by 8Sleep. Good Sleep is the ultimate game changer. The newest generation of the pod, the Pod4 Ultra, has arrived. Head to 8Sleep.com slash twist and use code Twist to get $350 off the Pod4 Ultra. Mercury.

With Mercury, you can simplify your financial operations. with banking and software that power your critical financial workflows, all within the one thing every business needs, a bank account. And with new bill pay and accounting integrations, you can pay bills faster and stay in control of company spend. Apply in minutes at mercury.com. Mercury, the art of simplified finances. And Northwest Registered Agent.

Start your business fast and secure with North Carolina. West Registered Agent. In just 10 clicks and 10 minutes, set up your entire business identity, name, address, mail service, phone, email, website, and domain. Everything you need to launch your business in minutes. For $39 business formation, visit Northwest Registeredagent.com slash twist. All right, everybody, welcome back to this week in startups. As you've probably heard, the global transition to EVs is well underway.

EV sales up 52% year over year. Tesla and BID in China, they're battling for market share, and obviously U.S. and China are the leading markets for these electric vehicles, but it's stressing this massive growth, is stressing the global mineral market. It's causing geopolitical tensions, as you probably know, not to mention an environmentally heavy race to dig the required materials out of the ground. And so it's no good to help the planet by moving EVs.

if we wreck the planet while transitioning. So we need a new way to get minerals out of the Earth and into our EVs. Today's gas is working on solving that problem, and they are looking somewhere under the ocean to find these minerals so that we can keep these EVs flowing and save the planet. The metals company wants to collect polymetallic nodules from the ocean floor. The company calls them a battery in a rock. I found out about this company because my bestie, Steve Jervitson,

the founder and managing partner, future ventures, is absolutely over the moon about this startup. And I asked him to bring the founder so we can talk all about it here on this week in startups, Gerard Barron, the CEO of Mentalist Company. Welcome to the program, Steve. Thank you. Great to be in. All right.

Tell me about this investment, why you're so excited about it, Steve. And then Gerard, maybe we'll ask you to just explain technically, operationally, how you found this opportunity. Sure. Thanks, Jason. Yeah. So I, as you know, was on the board of Tesla for like 11 years and am a true believer in the future of sustainable transportation. So one of Elon's early statements that all vehicles would be electric is just the question of, you know, when, not if, with the ironic exception of rockets, is something I believe truly to my core. And as you look at that landscape at large, clearly energy generation and storage is one of the key factors. But really, batteries, it all comes on the batteries. You know, grid storage, vehicle storage, we have the capacity to generate the energy we need, but we need to be able to store it and make it transportable. So as you double-click on that and say, why, you know, what, if anything, is going to hinder

this vision of a sustainable, carbon-free energy future, it's, you know, raw materials like metals that you need to make these batteries, to make the vehicles efficient, to make the design close. And so, and when you look at that around the world, there's been some pretty profound shifts that have occurred even in the early fledgling days of the automotive industry's transition in the use of materials like nickel and cobalt and you'll hear about copper, you'll hear about a lot of materials, manganese that are parts of the cathode of these batteries that are in short supply relative to Earth's resources. And so they, you know, let me jump to a conclusion. As you look at

where you can get these things from, we're currently mining the most environmentally sensitive and valuable resources on Earth, tropical rainforest in Indonesia and Africa and elsewhere, there's been a massive sea change in the last five years to do that. And it's just terrific, right? As someone who cares about the earth and its stewardship, the alternative, picking these rocks off the bottom of the sea, like literally like lifting golf balls that are free standing, not attached to anything and available for us. It's almost like, I don't know, it's almost like the dinner menu has been laid out before

us, but we're just not picking those rocks up. And it is environmentally the opposite end of the spectrum. It's like the second least environmentally rich area on Earth. I think only Antarctica is more barren to life, and the life is primarily bacteria down there by biomass far and away. So, a long story short, you have the resources we need. Geopolitically, America and the West would like to have sources that aren't China, and you'd like to do so in a way that isn't going to further climate change in environmental species degradation, as is currently happening in spades in Indonesia. All right, Gerard, explain to us, and maybe you could show us here how this all works.

I am, based on what Steve said, there are nodules, rocks on the bottom of the ocean, just waiting to be picked up. When did we find out about these rocks, you know, in the bottom of the ocean? How deep are they? How do you collect them? And why haven't we been doing this? Why haven't we been doing this all along, I guess, is an obvious question. Yeah, so thanks, Jason.

Well, we've known about these nodules that lie on the bottom of the ocean floor since the 1870s. And they were discovered by the British, actually, who sailed around the world, curious to know what lay on the bottom of the ocean floor. And so for four years, H&S Challenger sailed around the world with a dredge or a basket off the back. And they, after four years, were coming home down from Japan across the Pacific and came across this patch about a thousand miles off the coast of Mexico. It's now known as the Clarion clippodon. And it is by far the world's largest deposit of nickel and cobalt and manganese. In fact, there's around 70% of the known reserves of those three metals in this one deposit that covers about one. 1.5% of our ocean floor.

You couldn't wish, as Steve was saying, to have these nodules at a better place because if we take it all back to first principles, it makes sense that we carry out extractive industries in parts of the planet where there is the least life, not the most life. And in the abyssal plane, about half of our ocean is categorized as the abyssal plane. In this picture here is around 4,200 meters below sea level. notice there are no plants and there's not a lot of large megafauna either because there's not much food down there. In fact, if you measure the amount of biomass, there's around 10 grams of biomass per square meter and more than 80% of that is bacteria living in the sediment.

And so what we've been doing for the last 12 years now is studying this part of the ocean floor. there was a window also after being discovered in the 1970s. When the industry almost got started, you had Shell and BP and Mitsubishi and Lockhe Martin were all involved building the systems to go collecting these very same rocks. Rio Tinto had built a processing plant and they wanted to move it into commercial production, but the United Nations stepped in because 50 years ago the world had not agreed who earned the oceans and where do you onboard? orders begin and end.

And that was finally resolved when Unploss was signed in 1982. And basically what Unclos says is that as a sovereign, you own everything within 12 miles of your coastline, and you have an economic right to everything within 200 miles, but beyond that, it's owned by everybody. And they set up a group called the International Seabat Authority that is made up of 168 countries plus the European Union, and they regulate this part of the ocean. And so they are the people that we have applied to and being granted our exploration licenses. And later this year, we'll be lodging our application to move from the exploration phase

to the exploitation phase. So it's a really exciting time for the industry. And so, you know, to your question, Jason, about, well, why hasn't it happened before? It's because of that regulatory hurdle. and one of the bad things about having a regulator that represents 168 countries is it's a little bit slow. But that's also one of the good things as well, because one of the biggest challenges and risks in the mining industry is sovereign risk, because countries can change the rules, they can nationalize assets and so on. So it's a really interesting time right now. and we've been on this journey as the Nettles Company since 2011,

and we expect to be commercially picking these nodules up in 2006. Steve, you have a nodule there. Maybe you just hold it up here. It's essentially a rock. Now, how are these formed? Is it because the ocean is so chaotic with tides and all that, that they just break apart from the floor or there are like mountains down there that have just over thousands, hundreds of thousands of years just broke apart.

Yeah. Explain to us how these things formed. Well, there are three different types of metals in the ocean. And this slide shows you, if you can see it, it's on the left-hand side of polymetallic nodules. And that's what we at the metals company are exclusively focused on. And, you know, the amazing thing is they just happen to have the mixture of metals that we're going to need billions of tons more of nickel and copper.

and cobalt and manganese. And how they form is they precipitate the metals that are in the seawater or the sediment. And so they grow a little bit like a pearl grows. And the reason why this field of nodules is so interesting is because if you look to the east, you have the Rockies and the Andes, which were covered in nickel and copper. And so over millennia, these metal tops eroded into the Pacific Ocean. and you had currents pick them up from the north and the south, and then they met together and headed west in this area,

now known as the Claring and Clipidin zone. But there are other types of metals in the ocean as well, sea mounts and also hydrothermal vents. And we are not focused on those. They form in much shallow waters, and they also do have a lot more biodiversity in life around them. And so we think that polymetallic nodules, in the first instance is absolutely the right place to be focusing this new industry.

How do you collect them? I mean, is it been how far down are this? It's as simple as just sending a net down there. You have to send submersibles. Because Steve, this, you know, as capital allocators, it seems to me, just from the outside, you tell me if I'm correct, that we needed to have more demand for people maybe to see this opportunity. And obviously, Gerard's sort of a long time ago.

but, you know, the massive number of EVs being made makes this, I guess, like oil, you know, if you take oil from Canada where there's sand in it, at a certain dollar per barrel, you know, $80, $90, it becomes viable to take that oil and take the sand out of it. Other times, it's just not worth it. If oil was $10 a barrel, it wouldn't be worth it. So is it a similar kind of thing that happened here? Yeah. there's enough of the essential metals for the NMC batteries, as they're called, in this

sort of plot that TMSC, the metals company has to electrify the entire North America fleet. So all vehicles becoming electric just off this one first field. And to your other question, yeah, it's a robotic vessel, a ledge, or go through exactly what it's like, but you've got to have robots to be out of the ocean just to make it cool and make it efficient. And the pricing is, as you say, you have to be competitive. There are a whole bunch of marginal projects where you enter the market at, you know, better price economics. You can have shutdown economics for the others as well so that you're not, you know, destroying these ecosystems the way they have in the past. So, you know, that's the ideal goal. But right now there's just a, you know, we're not meeting

supply. In other words, if all the automotive companies were to be serious about the commercial electrical vehicles and conversion, these would not have enough metals from current mechanisms of mining. You would need more.

And so this is, we'd come online to provide that, especially in the West. You've heard me talk about how great my sleep is. Sleep is a superpower and my superpower is eight sleep.

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every night because of it. I'm coming into the game with good energy. So here's what I want you to do. Get the sleep you deserve at 8Sleep.com slash twist and use the code twist to get 350 bucks off of the pod for Ultra currently shipping to the US, Canada, UK, Europe, and Australia. I love this product so much. I designed it to invest in the company. Yeah. So tell me about this vacuuming robot we're seeing here and again if you're listening to this week in startups. We'll sports cast it as always and show you what we're, we'll describe what you're seeing if you want to. see it, go to YouTube.com and just type in this week in startups and you'll find this. So think of it as there are two phases of our operation, and one of them is picking the nodules up

and then transporting the shore, and the other is processing them into battery materials. But the main thing is you need a production vessel, and while in the future we will build specific special purpose vessels, the first one we converted was a oil and gas drilling ship and it called the hidden gem. And it provides the power. You connect it with something called a riser, an air riser, which is basically the vertical transport mechanism, and then with a electrical cable connected to a robot on the seafloor.

And basically, because the nodules are two-dimensional resource, so they lie unattached on the ocean floor. So we don't have to dig or drill to find them. We just have to go down there and pick them up with the greatest deficiency and the least impacts. And so our robot crawls along the seafloor and we fire a jet of water at the nodule, which creates an inverse pressure. And you'll see it on this video if you're able to. Yeah. So you can see them lying on the ocean floor.

And if you look closely, you can see them being lifted. So we don't go down there and scour and tear up the nodules. the ocean floor, what we do is we pick them up with the greatest deficiency. And in fact, this next slide shows you what it looks like once we've been through. This is that same field, 4,200 meters below sea level, where a collector has gone through and picked up these rocks. And it's literally what you leave behind are a set of tracks. And so in 2022, we were out on our license area as part of our permitting program.

And we were with our first production vessel, pilot collecting. And so for six months, we were at sea. We collected, bought home thousands of tons of these nodules. We had a second boat out there, which you can see in the background of this picture, which was filled with scientists. Because what we were doing is testing our equipment, if you like. That boat in the middle, the hidden gem, is production ready. and for 2026.

And what we wanted to do was study the impacts as we were collecting it because, you know, environmental groups have been having an opinion on this industry. Of course, we founded this company with a heavy thought around the environment because, going back to that first principal discussion, I said, if you really stop and think where our metals coming from, then it will keep you awake at night because we're pushing into some of our most biodiverse carbon sinks known as our tropical rainforests to get the supply of these materials now. And people are going, but there's no alternative, so we've got to keep doing that.

But there is an alternative. There's a much better alternative, but we've got to provide the scientific evidence. And that's what we've been focused on. We've spent $500 million over the last decade. much of it on that scientific research to show the impact. So we've established baseline studies over the last five years of what the environment looks like, how it changes. Let me ask you a question about these environmentalists. Are they looking at this from a logical way or are they just any disruption is bad and they're purest in that way?

Can they keep in their mind, Steve or draw it over it up to you? And Steve, I know you have a lot of experience with Tesla. Can they keep in their mind that, you know, there is cost to all of these solutions and that, you know, there are pros and cons and getting electric vehicles and stop burning fossil fuels? Yes, it requires removing minerals, you know, from different locations, but that will stop global warming and will stop pollution. So are they extremists or are they logical, these environmentalists, or is it a range? because when I see environmentalists hopping the fence at the German Tesla factory, I'm perplexed because they care about the environment, the forest around the Tesla factory, I guess, is their beef. You know, like, we got to keep this like little forest perfect.

But the bigger picture is we don't want to burn the entire planet alive, Steve. So maybe you could speak to this. I'll say something about this group of people. Yeah. And I've seen what this is actually part of what got me really interested in the story is the possibility that it's a, you know, in some ways, similar story to ones where we've had more years to reflect on the wisdom or folly of our environmental stance. And so the answer to your question is there is a gamut. There are enlightened environmentalists like Stewart Brand who say, what is the most environmentally beneficial or benign way to extract the resource to generate

energy and let's do that. It's pretty common sense, you would think. And then there are some on the other end of the spectrum who are, you know, just say no at all costs. Don't talk to me about the alternatives. They're just noists. And part of what drives them is donations. They're not being sincere about actually analyzing the pros and cons of whatever it is they're shutting down because they are in fact trying to shut down the most environmentally beneficial way of doing something on planet Earth. You might look at nuclear energy the same way. That's shutting that down, now with 50 years of hindsight was a huge mistake, right? The carbon crisis we have and the climate crisis we have, the environmental crisis we have,

is partially thanks to, you know, just an ignorant resistance to use the most carbon-neutral energy source we had, which was nuclear. Same for GMOs and food production with European regulation. And, you know, Stuart Brand would be the first tell you that in both cases that we were just dead wrong. We did more to the harm in the environment than anything else. So the framework I like to use, and the one that makes sense, the one the Stewart Brand and others would use, even James Cameron, a lover of the ocean would use, is to say, what is the best way to do something? Not, you know, A versus nothing, it's A versus B. If you're not going to do A, you're going to be doing B, which is better, right?

And knowing that we can't just say no to energy, you can't say no to batteries, you're like, it's just, you know, you'd be promoting the worst health of the ocean. if you just said, let's just keep burning oil and gas and have ocean acidification and warming, bleaching the reefs globally. Let's just continue business as usual and forget about getting off oil and gas, right? You know that's going to kill the oceans. It's such a good point, Steve. You have the Great Barrier Reef, which I dove maybe five or six years ago. And the dive masters were almost, and Gerard, I know you're from Australia, they were almost embarrassed or heartbroken to show us the white anteliorals. coral that had been bleached and was broken and floating at the bottom of the ocean. And taking these nodules out of this area helps that problem. And I think you have to have like a little bit of a wider aperture here.

The no nukes concerts did more damage to the environment than actually having nukes. That's right. The World Health Organization concluded in a study of Chernobyl, for example, and I'm paraphrasing what they said, but the conclusion of what they said was that the human dialogue, a nuclear energy has killed more people than nuclear energy. Meaning the fear, kind of like when the scud missiles are coming, the Israel, people die from heart attacks more than from the missiles themselves. It's kind of a crude analogy, but it's the same idea.

Our anxiety over this is worse than it is itself. And that, I mean, back to fundraising. Anything that can stir fearmongering and the emotions of the people is a source of fundraising. It's not a source of truth and it's not the best policy. Brod, maybe you could talk a little bit about what you're up against you. Yeah, I will say that, it does come in pockets. We have some very well-meaning scientists who care a lot about this part of the ocean.

Now, of course, going back to your point, we need to take a planetary perspective. And so there are some people who care so much about some of the mea fauna or megafauna that has been discovered that they don't want to think about what's happening on land. However, I can report that we're making some good headway with some pretty well-known NGOs about finding some common ground. And I think the reason why we're able to achieve that now is because of the hundreds of millions of dollars that we've spent on independent scientific research. And those results are conclusively showing what the impacts are. So, for example, years ago, when our robot crawls along the seafloor, it kicks up dust like you would if you drive your car down a dirt track. The question is, how far will the dust travel? How much of it will there be?

And some NGOs would say that the dust will travel for thousands of miles, but we always knew that it wouldn't. And what our tests in 2022 had done, and MIT have now reported on this off the back of another collector test, is conclusively proven that the sediment only rises two to three meters above the seafloor and up to 98% of it resettles in the same area because 4,000 tru-metres in this zone of the ocean is very different to the currents in the midwater column and the top of the column. So once you carry out that robust independent scientific research, that disarms people. And, you know, let's give them the benefit of the doubt. I think those great scientists who do care about it are like, okay, well, this is showing that there is, you know, your argument seems to be dispelling some of the things that our desktop study was worried about.

And we have to approach it from a positive sense. You know, we can't bulldoze our way through opposition, unfortunately. We have to get to the flag on the hill, and that's absolutely what we're doing. but social license is important to us. And I think that eventually we're going to be measuring every single impact that we make when we make these metals. And we want to do that because we've already done the life cycle analyses with independent third parties. Benchmark mineral recently completed one for us where we look through the lens of an LCA. And we can press the impacts by between 90 and 100%.

So, for example, when we move this nodule to shore and process it, we generate no waste. tailings, we use 100% of the mass, we'll generate up to 90% less CO2 per kilogram of nickel, for example, compared to the land-based alternative. And so we know that measuring all this is going to be really meaningful to car companies, because eventually they're going to have to pay for that, whether it's through carbon adjustment mechanisms or whatever it's going to be battery costs. I mean, it's incredibly generous of you, Gerard. I mean, the lunacy of these people at times, I'll say I know you're not going to.

Steve, you gave, I think, the middle of the road, Gerard. You're incredibly gracious about this. I'll take the other side. These people are lunatics. To take a rainforest being ripped down, bulldozed, and then the earth with giant, you know, gas-powered trucks and moving all that around compared to lifting up some nodules and a little bit of sediment. moving around is not even comparable.

It's not even in this. This is the what aboutism and the sort of, you know, showing both sides. Any objective person looking at both of these options would clearly say, this is the better option. And it is exactly to your point, Steve, about nuclear. The Germans turned off all their nuclear power. And what are they doing now?

They're burning coal and oil from Russia. It's nuts. It's nuts when people try to make these insane comparisons. I'm sorry, I'll get off my soapbox now, but it's true. Most startups have tight runways. So keeping your finances in order is critical. And we all know it can be really complicated. You got all these tools, you got bill pay, invoicing, reimbursements,

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company, not a bank, banking services provided by Choice Financial Group and Evolve Bank and Trust members, FDIC. While I see some movement in some of the NGOs, I see also a lot of really uninformed people who don't care about. And so we don't bother talking to them, right? At the end of the day, there's a sector of society that we don't spend any energy on because there's nothing that we We could say they want a degrowth and their way to success. And we know what the impact of degrowth would be. It would be civil unrest and who does what society would look like. Steve, let me ask you about this as an investment of your precious time and capital.

We're both capital allocators. Hundreds of millions have been put into this. Is this a venture investment? And I know when you and I talked privately, you had to explain to me last year at my Napa a conference with LPs and GPs, just how future ventures your firm is taking a longer portfolio approach to deep science and tech. Is this a venture investment? Could this possibly be done with venture dollars?

And how do you look at capital allocation when you're trying to solve these type of problems informed by, you know, working on Tesla, SpaceX and other, you know, and also your work on computing, quantum computing, right? You've got a history here of working on multi-decade problems. Some long-year projects. Yeah. Multi-decade, let's say. Yeah, exactly.

Nuclear fusion would fall on this as well. Yeah. So we, you know, as you mentioned, we like to invest in big, bold, audacious companies that if they succeed history books, we read and about them. And so in some sense, the, you know, if this seems like a brave new world, and it seems like, wow, it sort of captures the spark in the imagination, at least it does for me. that's part of what feels like a venture opportunity. Now, as a public company, there's a number, of course, that have gone public that are still venture-grade return potential. There's risk, but there's return potential, right? And that's the filter we're always using in what we do.

So, as you may recall, we have 15-year funds. We typically invested at the early stage. But when I looked at this situation, I saw what fits the usual bill of a venture startup, a unique idea, leader in the field, passionate team, a inevitable future, it seems, right? We get most of our energy from the oceans, right, in terms of the oil and gas industry. Why wouldn't we get most of our minerals? And yes, I can understand whenever there's change, that can be resistance to change. But if you just think beyond the friction of where we are to the, where would we be 500 years from now, it would just be surreal for me to not tap into this resource. As you heard, the abyssal plane covers half

of the surface area of Earth. I imagine that the oceans were gone. It was like, we're talking about half of the planet just sitting there with a two-dimensional resource to be picked up, right? How could we not take advantage of that? I mean, it's like picking up apples that have fallen from a tree. Like, they're going to just, they're wasted if we don't pick them up. So pick them up. I mean, make an apple pie out of it. What happens when you figure this out, you get to production, and since nobody owns this resource

and it's, you know, anybody can go there, are we going to see 50 boats from 50 countries? Are the Chinese going to launch a fleet in here? Is Putin going to decide he wants to come here? This seems like it could be a free-for-all if you do succeed. Well, great question. So we have the metals company have control over three license areas. We are sponsored by three developing countries. So the area has mainly been spoken for already.

So China is the largest license holder as a country. In fact, they had five expiration licenses granted to them by the International Sea Vet Authority. Russia already have an area. So do Japan and Singapore. How do you pay for those licenses? Is it a percentage of what you pull out or something? How does that work? Eventually, there will be a royalty.

Well, there is a royalty being agreed as we speak. But initially, you lay a claim. So providing you're a signature to one loss and a member of the International Seabed Authority or sponsored by a member, you can claim. an area. So we were the first company to claim an area from the reserved area because we were sponsored by developing countries. And so when they were drafting unclosed, they wanted developing countries to participate because otherwise these opportunities are dominated by the wealthy nations. And so what are the rules around that license? Do you have to take advantage of it in a certain

amount of time or lose it? Is it use it or lose it kind of situation? And then can you only, you know, take a small amount, prove that you can utilize it. Then you get to put a second claim in because why would in China? It's sort of like buying domain names. Just buy all of them. Screw it. And then that's what people did. They sat on them or like people are doing in Toronto or in New York City.

Foreigners buy up all the housing and then you can't live there. So how do they keep that sort of squattings, its situation from happening? I'm curious. There are monopoly provisions already aid infloss that prevent that happening. and then you're given a 15-year exploration license, which is cut into three, five-year plans, and you have to improve the ground. So you have to spend money to improve it. And then that entitles you to apply for a 30-year exploitation license over that defined area.

Now, we have a between, we estimate about a six to seven, maybe even longer year advantage over the next license applicant. And the reason for that is that most of the other license. are held by sovereigns, by countries, and they don't tend to be the most efficient at getting commercial activity organized, whereas we've assembled a world-class team who know how to develop projects. We've got people out of the mining industry, the oil and the gas industry, the material processing, robotics, you name it. And so, you know, it's a crack team, and we've been focused on getting to this stage such

But when those final regulations fall into place, that we're ready for production. You know, we've got our first production boat already. So you could argue we've had the cart beside the horse. We've taken a bet that the uncloss, the rules in which the Convention of the Law of the Sea is based upon, which legally binds all of those signatories to it to put in place these regulations. Hey, startups. Are you ready to launch your business without the headache? Well, with Northwest registered agent, you can set up your entire business identity in one place.

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stays protected. Northwest registered agent isn't just a service. It's your startup's new best friend. They've created a new category, a true one-stop shop for business formation. And Northwest loves supporting startups and is offering our listeners a $39 complete business formation package For just $39 plus state fees, Northwest will handle your complete business identity, getting you up and running in no time. Visit Northwest registered agent.com slash twist today. I am shocked that there is an orderly and efficient process here, Steve. I mean, as you probably were when you did your diligence, yeah?

Well, right. So pause for a sec. You can imagine my first morbid fascination with the regulatory body. if you thought the nuclear regulatory commission and, you know, 45 years of its existence not approving a single thing would be, you know, a reference point to what might happen here, you might look the other way. Then you add a UN body with 168 nation states that need to all come to agreement. Yeah. Good luck with that. Well, there's a very important addendum without which this might not have, you might not have any faith that is going to come to closure.

And that is that they have a deadline. And that was put in place. I'll let George give the specifics. but the high level bit is if they don't get their laws put in place and the regulations finalized, then you can commence operations. And kind of like the FDA. If you don't get approval back in a certain time frame, then it's de facto approved. And therefore, they move.

Oh, I didn't know that. Wow. That's incredible. Now, it's not exactly a parallel here in that it's not instant approval, but there's a much lower threshold for commencement voting-wise. So you're not going to have a holdup where, let's say, one or two nations just can't seem to get into agreement with the rest. then that can't hold you up any further. But correct me if I'm wrong in my sort of layperson's summary of that I heard. Yeah, let's ask the guy who's broadcasting from his bathtub about this.

I just want to point out how we're about half an hour into this. This is deep see, baby. He's like, he's just doing a soak. He's soaking in a tub right now. There's no water in it, but I don't know about your investment here, Steve. Either this one's going to the moon or you've, I know. I think it's the eccentric ones. Steve Jobs probably did an interview from his hot tub at some point.

Perfoot, eating fruit with no deodorant for three years. Yes. Steve was the unique guy. You knew Steve Jobs, yes, Steve? That's right. I worked with them. Yeah. You work with next.

Yeah. I'll get to that story in a minute. But go ahead, Gerard. Reporting live from, I don't know where are you. Sydney? You're in Perth. Where are you? You seem like a Melbourne guy to me more than anything.

No, I'm in Queensland. I'm a very proud Queensland. I grew up in a dairy file in Queensland. But today I'm in Dubai. Oh. Yeah. So I've been down to just lifting to Asia and I'm, yeah. So it's constantly on the road sort of jobs.

Still no explanation, the bats up, but let's keep moving. We'll just keep going. I love it. Listen, it's a small hotel room. I had to. Oh, I see. You're in a hotel. Yeah, yeah, yeah.

And this is, I got it. Yeah, you may be. Yeah. Okay. Totally fair. My other half is asleep. It's like 12.30 at midnight, right? I said, listen, I'll take it from the bathroom.

Are you actually in a bathroom? I thought that was just the couch or chair that looks like that. I'm now going to have to. Oh, it is a chair. Okay. Okay. But you know, one of the interesting things, if you look at that regulatory environment, it's the developing world that really want to see this happen.

And it's some of those Western European countries for a little bit, oh, industrialization didn't work out so well for us. We should maybe slow it down. We should, you know, do we really want to do this? And of course, you've got China and all the African group countries and, you know, Japan and Korea who are saying, we need more medals. You know, there is a practicality to this. And you're out on top of that, the geopolitics now. And I think I'm very confident we're going to see some positive language out of the U.S. government because while they don't have a license area sponsorship, the National Defense Authorization

Act signed by President Biden called on the DOD to carry out an urgent study on how they could benefit by processing nodules, by being able to bring them because like America became energy independent with shale, it can become mineral independent because of this resource. It's only a thousand miles off the coast of Mexico. So we could bring them to the USA because no one wants a mine in your backyard. You can't get a mine permitted anywhere in the developed world down. They want to outsource that to the developing world. But the problem with that is you also outsource the regulation and the environmental oversight.

So it's a lose-lose situation. So you've got to be careful about the downstream effect. You've got to be thoughtful about this. If we make a bunch of regulations about fishing, you know, there are a couple of countries, maybe who just decide, you know what, I don't want to be part of that organization. We'll just do whatever we want with our salmon pens in the ocean and dump antibiotics into them. And now we got antibiotics all over the ocean. You really do need to be thoughtful about these downstream effects.

But you know one of the things I can't not pitch this because the way we process our nodules is the same way that you process rainforest nickel. Now, the problem with rainforest nickel, as you alluded to, is you've got to remove the rainforest to get to it. all of the indigenous people and the biodiversity and the sequestered carbon. But what we found is that we can replace that rainforest nickel feed with our nodules. And so we've already announced our first processing partnership in Japan, where there's an existing plant. But there are more than 250 of these existing plants that are in Indonesia currently processing rainforest nickel. And so we will. So if they shut that down, you don't have to worry about those people losing their jobs because the processing plants are.

So globalization can be beautiful in that way. Yes, it can be. Yes, it can be. And what I hope is that the polymetallic nodule material processed in those plants in Indonesia can be become IRA compliant and then be bought into the USA, but further refining into those battery cells. And that's a win-win. That's like, and also try to build a processing plant anywhere in the world is both expensive. It's capital rich and you suffer overruns, you suffer permitting risk.

We've got more than 250 of them sat there wanting to do business with us. And so it's an amazing opportunity which allows us to turn the tap of supply on a whole lot faster than you would with any other resource type industry. So it's got a lot of things going for it. And of course, a new industry has to have a lot of things going for it because it's not easy to get a new industry started because it's a competitive threat. Some of the mining companies don't want to see this because they kind of like how it's going. And that was one of the things that we're very pleased about. We've been able to stay independent as a company. We are able to make our own decisions about what gets this resource into production

the soonest that it possibly can because the planet needs it. Amazing work. Really appreciate you coming on the program. While you're into Dubai, go to Orfali Brothers, ORFALI, I believe, Or Folly Brothers. Have you been there? What kind of an institution is that? I think you have been. been there. I think he's,

Mohammed Mo Orfali is a great chef. He's kind of like, I don't want to say the Gordon Ramsey, but well-known chef who's on like TV shows in Dubai. But it's, I think it's Jordanian and they have these great, like, homemade drinks they make there and breads and everything. It's just, you've been to Orfali brothers. It's a bit of a show and it's some of the best food I've had in my life. But say hi to Muhammad or Mo when you're there.

Steve, I just want to say, you know, it's so great to be your friend and to watch you do this important work in the world. I think you're one of the most underrated people in our industry because of your humility and how you just find these opportunities and make, you know, the world a bit better every time you place one of these bets, capital allocators, VCs, get derided all the time. And rightfully so, in some cases, if we're being honest. but my lord the impact you've had through finding bets placing bets and then shepherding them to success I think is unrivaled in our industry you're an inspiration to me and I think a lot of the people coming up in venture and Gerard you're in good hands with Steve helping you out here so congratulations on landing him yeah we're very we're very proud to count him as a as a part of the team Steve give us your best uh Steve Jobs story since I got you here we'll end on that that's the

Josh story. Yeah, just like, I don't know, sometime when he blew up or he just had an incredible insider did something completely that none of us would ever expect or know about. So I knew him during the next era, which is kind of like an era of exile, almost like a Napoleon is off on the island of Elba, you know, like in his country is, you know, is off, you know, going down the drain right before his eyes. So he was obsessed with Apple. In fact, he had a Mac keyboard on his desk at next.

and he had, like, with an ice pick, chopped out the Apple logo, the six-color logo, yeah, from his, from his keyboard. And it's sort of the symbolism of it. And whenever we went on walks, to talk about next business and the work I was doing a competitive analysis in this night, he just inevitably switched to what should Apple do? What should Apple do? And he would conclude that they should rehire him. Like, this was long before that happened.

And I just didn't have quite the guts to tell him, that's insane. You know, what person would bring you back to Apple and expect to keep. keep their job, right? What CEO would do that, right? And look what happened. The somewhat loosely related back in 1994 to 95. It may have been, no, it's 94. I had him over to my house. I was at school at the time, and there was a high-tech club meeting there we had him speak, and he sat cross-legged and below this position in front of the fireplace to a bunch of students who were like a rapt attention. And at the end, kind of like a geek, I brought my Apple extended keyboard desk if he'd sign it. And I already He had Wozniak signature on the back.

He looked at it and he was sort of startled and like taking it back. And I found out later, another reason he might have been taken aback having to do with the signature. But what he said was, what is this function keys? Like, F1, F2, do you use that? No. And then he took his car keys and he plopped the F1 key up. Do you use F2?

No. At the end, he goes, this keyboard represents everything about Apple that I hate, right? Because it was like that, it was the Windows world that had function keys. No Mac needs function keys, right? And he literally said, and I'm not exaggerating and not adding a single word, he goes, I'm changing the world one keyboard at a time. That's going to stick with you, right? He had a level of passion and focus.

That was unrivaled. Parsimony design. I think he and Elon share one attribute in their product design aesthetic, which is, I think both suffer a visceral pain and agitation from visual imperfection. if something doesn't line up, if it's not done right, things that you may not even see. Parts of the product. Oh, Elon went crazy about that. I was driving in, you know, a Model X at one point, and I had to, like, pull the car over

because there was wind coming from one of the early prototypes. He lost his mind over the gap of the window and the thing, and he was like, just like, he's taking notes. He's texting people, taking pictures. And I was like, calm down, brother. We're just going to dinner. Like, it's going to be okay. But he's really annoyed him that there was a little whistling coming from it.

You know, and the alignment of the tinting on the window with the frame, I couldn't see it, but they were like not perfectly parallel. Yeah, yeah, yeah. Yeah, little things like that. I mean, and then Apple today, Steve, your take on their inability to launch a new interesting product since Steve's roadmap seems to have been exhausted and they've wrung every last song and scrap of a lyric out of his incredible catalog. I mean, what would you do to save Apple at this point?

I'm not sure what it takes to save it. I mean, you look at Microsoft and you see there is potential with new leadership. I mean, under Balmer, it was just a train wreck, right? Yeah, sideways for a decade, lost decade. Yeah. And in this case, you know, Titan, the car project being canceled, all kinds of misfires, like, you know, the VR, I mean, like VR, hello, this is dead on arrival, hello. So it's just sad.

It's sad for me as an Apple enthusiast. I do believe in their potential, but I think if you look at the long arc of Apple or Google or any large company, they only make a difference in the world when they enter a new business, not when they try to restructure or remit their core, right? So even before the post-Jobbs era, when Jobs was riding high, there was nothing new in desktop or laptop computing that mattered from Apple. There's nothing you've pointed in the last 20 years that's improved. It's only when they entered a business, they weren't formal.

in. And this is sort of the broader rule of business that I take is almost inviolate is that no incumbent revolutionizes or makes meaningful change in their core business. And so the key question for Apple is, what new business do they want to get into that they're not currently in? Because you're not going to see them innovating mobility. You're not going to see them innovating desktops on the board. If they had the absolute insight to put you on the board and to help with secession for Tim Cook, who is going to retire at some point, what markets would you look towards? What problems would you try to solve? Yeah.

I have one that came to me today, but I want to hear yours. And, you know, ideally looking beyond the, you know, let's all hunch over in our phones and lose ourselves into the, you know, short focal length screens that are literally our meopic future, right? Yeah, black mirror. Yeah. So some AI first, first person experience is not the humane pin. It's not, you know, the rabbit. It might be glasses. I don't think it's the earphone-based things that some people are working on.

I don't know what the answer is. So often as an investor, you gave me some incredible praise a moment ago. But what I wouldn't say that I do particularly well is envision products the way entrepreneurs do. The best that I do is try to search in the waters for adjacencies to big unbent needs. And then when I see something that looks unique, something unlike anything I've seen before, but adjacent to where I've been, I can sort of move quickly and say, they've got it. So I'm looking a lot around, you know, how does AI reship our? world. I think here's a high level bit. We'll look back from the not too distant future and say, oh, yeah, that was the age of AI, right? Just like it was the age of mobility. Of course, right?

The age of the internet, the age of computing. So it's going to be something around that. And I don't think the user interface has been figured out yet for how best to bring that with you in a way that's persistent, ambient, and passive, right? Yeah. All is that your side. Yeah, that's fascinating. I had an interesting thought today. I was like, why, you know, this, when people have like fancy houses, they have like Questron, Savon, Control 4, all these systems are garbage. Every time I buy a house and these things are

in it, I rip it out and I just go with Apple TV and so knows. Because they're simple and they work and they're elegant. And then I'm saying, well, what the hell does an Apple take over my home and just make this smooth? And they're just like, yeah, no, we just have a home app, but we don't do your speakers. We don't do all the cameras. We don't do any of that. And then I was like, wait a second. I have to open the

aperture here. Why don't they work on housing? Itself. And itself, because Steve Jobs' last inspiring product was the mothership. That was his, that was his like signature, right? Yeah, when he built that round mothership, that was inspired. What if Apple took that inspiration of the mothership and then built those, like, you know, James Dolan's building the sphere, you know, like a new architecture, a new way to live. Apple building, it sounds insane, housing, which is one of the pressing problems in the world,

and having, I don't know if it's ADUs like Joe Jebby is doing, the co-founder of Airbnb, with his backyard dwellings, but imagine Apple going after housing. Yeah. So the beauty of this is, you know, before Apple got into music, it was perceived as insane that they would make a pivot. Like, what in the world? What? You have any business there?

Other than the brand violation of Apple records, there's no connection here that anyone can see. I don't know if Apple does it. They might, but someone who's not in the construction industry should revolutionize the construction industry back to that earlier point, because it has actually slid backwards over the past 30 years in labor productivity. It's just insane. It is growing as a percent of global GDP is becoming less efficient. And, you know, we haven't seen a major revolution.

change in how we build buildings in forever, right? So, from everything from architecture and site selection through final billed materials and everything in between, so much potential. And this is a very much, we're also kind of like a prepared mind trying to find our nurse who are going to show us the, ah, you know, is it a variant on pre-fad? Is it a variant on build on location? You know, with like 3D printing, which has pluses and minuses, a lot of minuses, frankly. Yeah, a lot of minuses.

Something that's not something new. Something that when you see it, you're like, of course, that's how we'll be doing in 50 years from now. There were a couple. I invested in a company called Blockable that didn't make it. And I was doing, like, build it in the factory and then place it and then making like Lego so you can stack them. Terra was, I guess, Masayoshi's bat. That was a disaster.

They tried to boil the ocean. It didn't work with. Well, they got soft bank money. That tends to ruin you. Yeah, it's kind of like. Like here's $400 million. No. Yeah.

Why? Why does that ruin companies? Well, imagine a real competitor. You're actually managing your business responsibly. And then here's this overfunding company plops in your industry. First, it makes harder for you to raise money to compete. Second, they're spending like drunken sailors and kind of ruins the pricing point for everyone. So I've seen it, I would go farther to say not only does a soft-mang investment tend to ruin the company they invest in,

tends to ruin the whole industry for a bit of time. While it's just too much capital, too much distortion, ready to put it to use, right? And so you can cover up for a lot of sloppy thinking on business dynamics. You don't grow by learning from your customers. You grow by listening to what Mazayosius says, hey, there's another bag of money. You're not thinking big enough. You're not crazy enough. You know, like, what it is?

It's crazy. You can drown a company. All right, Gerrard, you got to hear me do a micro interview of Steve Jarvison. Apologies to have you on as a guest and then hijack it. But when I get Steve, he's super busy and I have to ask him a couple questions. You're hiring, I understand. What positions do you need to fill? And if people want to save the planet, how can they apply to join your team, Toronto?

You know, we have, we always have vacancies for, and, environmental scientists and we have an amazing team already. We have over 100 scientists working on the program now, but most of them are throughout partners. Only about 10 of them are on our team, but we always want to see more people there. We've got an amazing team. One of the great things about our business model is, you know, we're going to be very capital light, but it also means, you know, we get to rely on our partners like all seas who for 40 years have been the world's leading high players in the deposition for oil and gas. So they bring all that expertise and they're going to operate our first production vessel.

So we've got to keep our core team really tight. And we're about permitting, we're about social license, and environmental. What's the website? So people can go check it out if they want to learn more. Metals.com. And our ticker is TMC. There you go. All right, everybody.

We'll see you next time on this week in startups. Bye-bye.