Beanstalk
An interview with co-founders Mike and Jack Ross
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Ali Tabibian: Welcome, welcome, welcome everyone to this episode of Tech Cars Machines. We could also say it's Tech Cars Agriculture, and even Tech Cars Y Combinator. In fact, we have a little bit of a double header for you and the reason for that is Y Combinator. For those of you who don't know, Y Combinator is probably the best known your incubator in Silicon Valley and about twice a year they do a major event where they introduce some of their graduates to [00:00:30] a group of investors and a couple of us at GTK were there as investors. It was so inspirational to be around so much energy.
We decided to give them a couple of the companies that fall into the tech cars, machines, category a platform on our podcast. [00:01:00] One is Beanstalk – indoor farming, and episode to be released simultaneously will be about Bearflag Robotics, autonomous tractors for orchards.
As you all know, in this podcast series, we talk a lot about various technologies that go into the world of cars and machines. Most of those cool things we talk about or are best known, really I should say, in the context of self-driving automobiles. But what if we left the roads and looked elsewhere?
[00:01:30] In the last episode we interviewed Knightscope, which is a security robot that roams around the halls of major companies in their parking lots and makes funny noises and keeps things secure. What if we actually left not just the roads but left town altogether and went to farms specifically?
In this episode it's going to be about Beanstalk as, in Jack and the Beanstalk. What they do is indoor farming. Most people think of indoor farming as greenhouses [00:02:00] and generally these greenhouses are located where farms are. The beanstalk folks, however, are using hydroponics – they'll explain what that means -- to grow food close to population centers in warehouses. So where's the technology you're asking yourself, Mike and Jack Ross, [00:02:30] the sibling founders do a great job of explaining things in detail, but let us point a few things out before we get there.
This is not the first time someone has thought of this concept. In fact, some of our own affiliates, several years ago, right after the great recession, looked at similar concepts in Detroit. Buildings were cheap because so many were abandoned and electricity was relatively cheap as it tends to be in areas with good hydro electric power. At that time, three things were problematic: the economics didn't quite work. The distribution turned out to be a challenge, and of course over the long-term you have to worry about the commoditization of your produce. That's why you'll hear us focus during the interview on these particular three questions. Now, as far [00:03:30] as the economics go, two things have changed in the last several years to make things very different.
First, providing the plants indoor artificial light has gotten a lot cheaper, not because the electricity is cheaper, but because the lighting is a lot more efficient and cost effective. In particular LED lights, which use the same technologies used to manufacture electronics, have improved and gotten cheaper dramatically in the way that things tend to do, meaning get cheaper dramatically when they rely on [00:04:00] semiconductor technologies. Those LEDs are on the same price and performance curve as your computer has been for 30, 40 years. A unit of light generated by LED lights is about one fifteenth or one twentieth the cost it was 10 years ago. That's pretty dramatic.
Second, 3D printing has come a long way and you may be thinking to yourself, has this guy lost [00:04:30] it? You know, we're here to hear about indoor farming and he's talking about 3D printing. Here's what's relevant. That components in these 3D printers, especially the larger ones that physically move things around inside the printer, have gotten a lot cheaper. This matters to indoor farms because it turns out that these part moving technologies from 3D printing are actually applicable to the sizes and spaces that one encounters in indoor farms at warehouse scales. In other words, it allows you to reduce labor costs through automation.
[00:05:00] So, just like autonomy where technologies like cameras and image recognition which where we developed for other applications are making a difference. Now, without further ado, let's head to Beanstalk and hear from the two really great founders, Mike and Jack [00:05:30] Ross.
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Mike Ross: Great! Thank you Ali. I'm Mike Ross and the Co-founder and CEO and I'm here with my brother Jack, who is gonna give a quick intro on the company.
Ali Tabibian: Jack, why don't we do it in the format of Y Combinator and just so you know, listeners, we met the Ross brothers at the Y Combinator Winter. What's it called? Winter-[crosstalk 00:06:00] ...the winter [00:06:00] batch. Winter batch. We were there for Demo Day, they impressed a lot of people with their presentation, got a lot of attention from the people in the crowd and we were fortunate enough to be able to meet them as well. And I thought, you know what? Let's put their achievements and let's put their dreams in front of our audience and see what you guys think about what they're up to. Give us the two minutes and believe it or not, they're restricted to two minutes at Y Combinator. Give us the two minute spiel.
Jack Ross: Happy to. So am Jack, the Co-founder of Beanstalk. We grow produce indoors at the cost of outdoor farming. [00:06:30] We get this done because our indoor farms are manufacturing lines. Our manufacturing process increases the simplicity of our farming. It also reduces costs and we were able to do this because we looked at where labor is most costly in the farming process and we built machinery to replace that and so that allows us to actually compete on volume and price with big agriculture. Over big agriculture however, we have some serious benefits.
We grow indoors, so we are not subject to the ever changing [00:07:00] climate. We grow within a hundred miles of our customers, so our food is fresher and therefore more nutritious. We don't use any pesticides because we don't have pests inside. And we also use 95 percent less water than a traditional farm at a time when water is becoming more and more scarce, our technology can grow. It uses hydroponics.
You can grow anything that grows really above or even below ground. But we're starting with heirloom grains because of their high sale point. They're grown on only a few select areas around the world and we [00:07:30] can bring that very high quality produce much more local. United States heirloom greens are a $5 billion market, our fresh produce is totalling nearly $50 billion annually.
My brother and I, we are experienced operators and engineers and we're really starting this company because we want to create a sustainable abundance of healthy food through technological advancements. So, we're being soc. We are a manufacturing line farm. We are initially targeting the $5 billion green's market in the US [00:08:00] and we're beginning production this year.
Ali Tabibian: Let me tell you, it's very inspiring to meet folks like yourself. It really is, just taking the market, attacking it very systematically in a very thoughtful manner. Let's draw for our listeners a mental illustration of what this whole looks like.
Mike Ross: So there's definitely another worldly feel walking into a vertical farm. So we're inside of a light industrial warehouse, so buildings that are 15 and 20 thousand square foot footprints with 20, 30 foot tall ceilings. [00:08:30] Really the way we like to describe it is, it's kind of like an airport baggage facility. You know, these plants are grown in a standardized container that's fit shipped around the warehouse for the different stages of growth in life. So it's a beautiful thing, there's a lot of green and purple and different colors and it's all lit up. So, it's a truly unique sight to behold
Jack Ross: And you know, we can control the entire climate inside. And as Mike likes to say, it's always 65 and sunny facility, [00:09:00] it's a pleasure working here. So if the plants like it, not too bad for ourselves.
Ali Tabibian: Where are you located? Where is this facility located?
Jack Ross: So, right now we are in Mountain View, we are part of the Y Combinator program, but we are moving back to the East Coast to open up production.
Ali Tabibian: Okay. So do you have a running facility right now or is it mainly sort of a test bed that you have?
Jack Ross: So, it was mostly a test bed. We've done a lot of work over the last year to two years of drilling with hydroponics testing different growing [00:09:30] methods, selecting the right crops to go to market with. And we came out of Y Combinator to really focus on proving unit economics, getting cost to the right point to enter the market. That's definitely a big need in the green's market from indoor farms. We've yet to see a real clear winning strategy, and we think it's going into the commodity environment markets, so we proved that while we're out here and now we're in the process of tearing down and shipping it across country to get started.
Ali Tabibian: I can imagine the warehouse you're describing. When I walk in, is their natural [00:10:00] light coming in, do you augment the natural light or do you rather just control all the light artificially?
Jack Ross: So we wanted to have as precise of an environment as possible to really reduce any variation in growth. So all of our latest artificial with high efficiency LEDs, we will look into using natural light maybe we capture through PVs, but in the facility is all artificial.
Ali Tabibian: What do you mean by PVs?
Jack Ross: Photovoltaic cells. So, solar can go a long way in this business. Still not yet at a hundred percent where we'd like it to be, but we're definitely big [00:10:30] proponents of solar and any building that we buy or build will have solar on it.
Ali Tabibian: When you go back East, what city? What location are you looking at?
Jack Ross: So mainly Mid-Atlantic region. I'm starting there and kind of growing from that.
Ali Tabibian: OKay, that's great. So, that's kind of starting at the ceiling. What's coming through the ceiling, as I look around your facility, what am I going to see? Is it plants growing out of pots with just water in it or is there soil? What am I seeing?
Jack Ross: So it's a pretty typical hydroponics set up. They grow in a soil replacement [00:11:00] in bins of water. So what you'll see is we're very good about maximizing that volume metric density, packing plants in as tightly as physically possible. So mostly what you'll see is plants, you'll see plants growing. Very little of the facility is dedicated to anything other than something that will generate revenue. We have several robotics that we've built and some machines that help with that automation process, but by and large it's mostly just growing plants.
Ali Tabibian: So basically what I'm gonna see is vats of water, essentially with plants growing in the water and there's [00:11:30] some sort of nets or meshes or something that provides support for the roots. How does that work?
Jack Ross: So, we use a soil replacement. It's kind of [inaudible 00:11:39] material, similar to the size of a K-Cup. It's just enough to give the plant some support as it grows and then plants grow essentially on a tier system, almost like shelves and so, looking at them from the ground you're just gonna see these shelves going all the way up to the ceiling with a bright white light above them. And mostly just [00:12:00] green beneath, because we've really tried to minimize anything else. So it's just plants.
Ali Tabibian: So it's almost like they are growing in a custom bookcase cabinet where each layer of the cabinet has its own light.
Jack Ross: That's it, you could also contrast that with going to a place like Costco where you've got these huge pallet racks. So again, we are more on the industrial size, so you'll just see very large essentially bookcases or shelving units full of greenery.
Ali Tabibian: Okay, excellent. Let's talk a bit about your technology. You've got sensors, [00:12:30] you've got equipment and actuators that presumably control the water lighting, maybe nutrient flow. There's probably some conductivity that established a connection. And then you've probably got some analytics on top of it and you certainly mentioned the robotics as well. Which one of those is the most important? Which one is unique to the company?
Mike Ross: It definitely starts with the mechanization of the process. Luckily growing plants, it's fairly straight forward and there's really nothing new there. The things that we bring to the table that [00:13:00] allow us that unique ability in the market is the mechanization. It's finding the hotspots where labor is very intensive in an indoor farm and reducing that by either simplifying the process or simplifying it and then automating that. So it's building very specific machinery around, very specific in controlled parts of that process. And then on top of that, of course you can't improve what you don't measure. So we make heavy use of sensors that monitor things like air quality, water temperature, you know, how things are moving through the facility, [00:13:30] operational efficiency, things like. So, Jack I think you work on that heavily.
Jack Ross: Yeah. And additionally, and focusing on the operating expenses in the farm. And we also wanted to focus on making sure that these facilities reasonably costs a build out. So we focus all of the things that we grow inside of the hydroponic systems themselves are all our own and we've been able to really drive down that cost of building these facilities initially once they're up and running. We've designed several pieces [00:14:00] of machinery from seeding to moving plants around to a minute planting plants as they go through their life cycle. They needed to be spread out and things like that, to have more room to grow. And so that's really allowed us to reduce the cost of labor that traditionally have a very high cost for indoor farms. And so that's what brings us much closer to a commodity prices to be profitable at that.
Mike Ross: And then on the, on the software side, we're using several products from the Google cloud and AWS platforms. There some really great tools out there, [00:14:30] We're big fans of things as a service right now, even though we had a career in software engineering. Anything that reduces that setup time and overhead, we're big fans of. So things like Lambda and Firebase, they're really great tools to start with and we're seeing that actually be a little more viable to scale with as well. So we're using that for running analytics, for running alerts, building some very basic dashboards off of those tools to kind of gain insight into the farm. But you know, for right now we're still very hands on, on the process. So remote management [00:15:00] isn't as big of a priority for us right now, but of course that will be down the line.
Jack Ross: And one of the great things that we have working around that additional manufacturing mind, design, is any manufacturing line is gonna have different areas for quality insurance where you can run your tests on everything as they go through the line. So we can have very dedicated sensors just in a few locations to make sure that our food is really of the highest quality. Very, very safe and of the right size where it needs to be.
Ali Tabibian: Describe for me one of the machines, the specialized machines [00:15:30] that you've made, just draw a mental image for the listeners here.
Jack Ross: Sure. So one of the machines that we focused on over the past half a year or so is really involved in taking high dense array of plants, you know, as they're kind of leaving that seedling stage or that young stage of growth and spreading them out into a wider array for the hybrid stage. And so effectively what we've done is we've tried to keep things again as Michael said, you know, as simple as possible. And [00:16:00] so our machines, you know, we don't have these six axes arms that are extremely expensive and complex to program. Were much more along the lines ... You know, 3D printers are good at getting the exact locations and moving things around. And so we've tried to take inspiration from things like a 3D printer or you know, other [inaudible 00:16:17] systems that are really good at moving objects and they're rather cheap to build.
And so for that a system for moving those plants around we have something that kind of along those lines that can pick a plant [00:16:30] up, bring it somewhere else, put it down and do that over and over and over again at a quick speed.
Ali Tabibian: Thanks for the explanation. Jack. Let me ask you both, what are your backgrounds? What allows you to be efficient and good at creating all the technical components of the Beanstalk company?
Mike Ross: I really think it starts with our parents and our upbringing.
Ali Tabibian: I was gonna ask you about this.
Mike Ross: They found our path very interesting. We both left maybe more traditional software engineering roles to, go [00:17:00] start farming and start a company. They had their fair share questions. But now that we're up and moving and they see that we're growing things, they're very happy. They don't mind. My background is a degree in aerospace engineering from a Georgia Tech go jackets.
Ali Tabibian: Nice, nice. I went to high school in Florida. Georgia Tech was a big destination for people in my school.
Mike Ross: So we're big fans of the Southeast. There is a lot of fun living in Georgia for a while and then I went into a Software Consulting and got experienced with some machine learning, back end [00:17:30] systems, data management, and then at the very end there I was in sales. So learned a lot from some really great mentors about how to talk to these large enterprise businesses, which are now our customers.
Jack Ross: My background start with technology rather early. I was building computers and tablets in Junior High and into High School. I started writing iPhone apps just about a year after the App Store came out. That was fortunate enough to create a game that spread pretty far across the world,
Ali Tabibian: What was it called?
Jack Ross: It was called Grackle. It's just an arcade game-
Mike Ross: It's got [00:18:00] a farmer actually.
Ali Tabibian: How do you spell it?
Jack Ross: G,r,a,c,k,l,e- I don't think it's been updated in sometime. That was almost eight years ago, seven years ago, but ended up reaching up five hundred thousand people. That gave me enough money to go to college, so I ended going to UVA and [inaudible 00:18:19] and studied electrical computer engineering there. And so between the two of us, we kind of have that mechanical side that's needed to build these large farms and the automation [00:18:30] side. I spent a lot of time studying task robotics and fleet robotics, that we can build the client what we're doing right now.
Mike Ross: So between the building drones and fleet robotics at school and working in the wood shop with our dad, just that really hands on appreciation for craftsmanship, just understanding that learning is really the key. So we're big believers in finding mentors and areas that we haven't, you know, don't have the most experience in and just staying very open to other ideas. [00:19:00] Very much not precious about a lot of the things that we've built.
Jack Ross: It's very rewarding, you know, we spend a lot of our time today either, you know, making robots or designing bigger structures, but at the end of the day we have food growing, right that we get to take home and eat. Those long, hard days are rewarded by eating our own product, which coming from software, that's not something I was able to experience.
Ali Tabibian: That's a great. Maybe let's move on to the strategy and the rationale and the construct of your business, how you assembled it, some of the features you [00:19:30] wanted to have, some of the branding that you wanted to have that makes it a distinguished and sustainable business. Talk about that other Jack or Mike.
Jack Ross: True. So sustainability for us is really creating a process that can run forever. To us that means that it needs to be powered by something that can continue to run forever, renewable energies. We need to conserve resources that are very precious, like water and, you know, we're making food. We need to make sure that this is something we designed that can generate food for [00:20:00] really the rest of time that humans are on earth. And so these facilities that we're building, we're paying close attention to everything that goes in. We don't want to use anything that's not necessary. We don't want our machinery to use great amount of power and we want to be very conservative in what we use.
Mike Ross: So, We definitely measure ourselves on that metric, sustainability. It has to be sustainable. After that, It also has to be high quality, it has to be nutritious food. We're addressing the problem of a lack of nutrition and we produced a lot of food, but not all of [00:20:30] it is nutritious and even the stuff that is nutritious, by the time it reaches that consumer, it's lost a lot of its value.
Ali Tabibian: And by we, you mean society at large.
Mike Ross: Society at large, right? We're, getting very good at maximizing our arable land, but that shrinking, and the US in particular is importing a lot of it's food. So we just need a way to kind of restore that locally and that's how we bring that nutrition back.
Jack Ross: And the quality and nutrient density of food or nutrients inside the food will degrade over time. And so the [00:21:00] farther food travels, the more time it spends traveling and therefore the worst of the food will be when it gets to your plate, you know, strawberries in New York in the middle of the winter, they're not that great. So we want to make sure that we can grow food locally to ensure it's the highest quality. But to us that's also not good enough. We need to make sure that we're producing food at a price point that really everyone can afford. We don't want this to be exclusively for the high end restaurants. We want this to be in your local grocery store or at the place you're getting a salad for lunch.
Ali Tabibian: [00:21:30] That's great. So the passion is around sustainability and affordability. Now, what are the features your business needs to have to be different from hydroponic concepts that have come before, whatever their shortcomings have been, you can talk about that. And what are the highlight phrases that you want attached to your business for it to be attractive to investors and customers?
Mike Ross: The market is just fraught with volatility. There are incredible amounts of risk just baked into the system, starting with water and weather, moving onto [00:22:00] labor and then finally transportation. So really it's addressing that risk upfront. For us, that's local production indoors where you can control the environment and bringing that stability back to the system is what makes it so attractive to our customers. Beyond that, it has to be the pricing, so really this business is judged on quality and pricing. We've achieved the quality through hydroponics as a society again, and it's been stock that's bringing the prices down to the volume in the market, the wholesale [00:22:30] side of the market, and that's really the biggest feature to our customers.
Ali Tabibian: So, Mike is the implication of what you just said that hydroponics so far has proven itself to be able to produce equally nutritious food as soil ground. Is that what you're saying? But they haven't been able to do it at the right cost.
Mike Ross: That's exactly correct and a lot of circumstances because you might be in a greenhouse or some other indoor, more controlled environment, you can actually grow better seeds. You can grow heirloom seeds and this is food [00:23:00] that has been handpicked over many, many generations to be the tastiest food. The problem is the past has also evolved over that same time period to recognize that food and to eat it. So, it's just not economical for an outdoor field to grow that really high quality food.
They have to use food that's been engineered for pest resistance, weed resistance, and then that long travel to the end consumer. So hydroponics has proven that you can grow these things and they taste great and they're very healthy and you have [00:23:30] a really good control over its origin. It's just the price has been too high. It's not been stable enough to produce in a large enough volume.
Jack Ross: Hydroponics is really just the method of which you're delivering nutrients to the plant. It's through a mostly water-based approach, whereas traditional growing has done in soil which retains the water in some of the nutrients are in the soil. With hydroponics, you have to deliver the nutrients through the water.
Ali Tabibian: What do you say to the skeptics that say, it just can't be the same from a nutrient a perspective.
Jack Ross: [00:24:00] In particular with Greens, the vast majority of the nutrition comes from the seed itself. So by starting with the highest quality seeds, we get to have incredible taste and nutrition in the food. Beyond that, about 80, 90 percent of the plant, depend on what you grow as water and then there are a few key elements, fertilizers that you need for growth. And so it really boils down to just biology and chemistry, ensuring that the plant has what it needs for photosynthesis and to grow [00:24:30] in size. And so when you know, you look at the end product, the nutrition and plants grown indoors because one you're using a better seed, until you have a perfect environment, that plant is going to be the highest quality that we can create.
Mike Ross: And there's actually a lot of innovation being done and then microbiomes and additives that you can bring to simulate that biological environment in the soil. That matters more for the fruiting plants, things like tomatoes [00:25:00] are more susceptible to needing different nutrients in the soil and different biological activity. And there's a lot of research being done and we're certainly talking to a few research universities that are working on that. So we hope to kind of push that science forward.
Ali Tabibian: Great. So let's start switching into some of the business decisions you've made about what you want to grow, what kind of plants you are growing, how far away you want to be located from whoever your end user is, how do you get your stuff into people's mouths?
Jack Ross: [00:25:30] Sure. So, for us, just thinking about a sustainable business where you are impacting a lot of people and proving that you can hit the price points. For us, it's wholesale. That allows us to really focus on refining our process, making sure that we're delivering the best product on time to the specifications of the customer and not worrying as much about, you know, other aspects of a business that might want to go into retail or things like that. That is on our, on our roadmap. But for now we want to really focus on just [00:26:00] providing high quality food and in large volumes. We've also decided to locate within about a hundred miles of our end consumers, that provides us that local label that proves the nutrition of the product. And because of some of the software and sensors we're using, we're able to tailor our harvest schedules based on delivery so we can ensure that, you know, that farm to plate time is minimal.
Ali Tabibian: What's selections have you made in terms of what you want to grow, and why?
Mike Ross: The products that we're starting with [00:26:30] are our heirloom Greens, in particular we're looking at, things along, salad mixes, head lettuces, that they have a bit of a higher price point. They're increasingly demanded in large cities as people eat more salad and tried a bit of a healthier lifestyle. And for our customers it's really a great need. They need more supply and those greens categories as the climate change, they have to change where they're getting food from currently. And as you know [00:27:00] the tracking is increasingly changing. That adds a lot of complexity and from any of them they can't meet the demand that they have. And so not only can we provide a better product, but we can actually provide something that they just can't get right now, which is that high volume that they need for their customers.
Ali Tabibian: You mentioned the word local. What does it take to qualify to be called local? Is there a mileage or distance or time?
Mike Ross: A lot of that really depends on who's purchasing and you know, for example, there are companies like to pull away that are [00:27:30] really focused on supporting local growers. And so for them they've set that radius to where they can guarantee quality and still need that more local demand. Then there are restaurants in the area we're from, in Charlottesville, Virginia, they were very stringent. They actually want to maintain a one to one relationship with farmers. So for them that can be as small as 50 miles away. So it just depends on who's buying. We've seen a in terms of that wholesale market, 250 miles seems to come up a lot. [00:28:00] So we wanted to set our sights a little higher, just to make sure that we're maximizing that potential customer base.
Ali Tabibian: So the Mid Atlantic makes a lot of sense, right? Right population density, the transportation networks... It seems like you've thought a lot about taking a lot of the costs out of the hydroponic system through automation, mechanical automation essentially. Now, presumably that warehouse you're renting is a lot more expensive than land in the middle of nowhere, you know, a few thousand miles away. What makes up [00:28:30] for that? Can you grow more often, more cycles? How were those economics?
Mike Ross: It's an interesting trade off actually. So, you're talking about maybe $1 or $2 a square foot in the middle of nowhere, per year of course. [crosstalk 00:28:44]. We gotta be careful with that, that's a monthly value.
Ali Tabibian: Maybe weekly. Where you're standing right now on a weekly basis.
Mike Ross: Well, we've done our research [00:29:00] and It's around that $1 to $2 per square foot per year in the outskirts and it's really only about $10 a square foot a year in the city limits. So for us, because we're vertical, we're making great use of that square footage. We're even going a step further and maximizing volume, but being that close affords us that local brand, it makes it easier for transportation. You know, we'll be in transportation hubs, we'll be in distribution center hubs. We could very well end up next door to our [00:29:30] customer and that just simplifies the business so much for us that the real estate kind of falls out of that.
Ali Tabibian: And other people have attempted this so far, mainly because they don't have your integrated set of skills to mechanize what needs to be mechanized
Mike Ross: That's essentially it. Plenty of businesses that have tried, you know, in the years pass for them, it was mostly around energy costs. LEDs have come a very long way. So the folks that are out in the field now, no pun intended, they are just coming up [00:30:00] on that labor costs. You know, there's a great report put out every year by [Agrolists 00:30:04] and they're putting the indoor labor at 50 to 60 percent of their operational costs, which is just really, really high. You lose a lot of the automation indoors when you come off the field, you know, there are no John Deeres, you know, case tractors for indoor farming and that causes expenses to go up.
Ali Tabibian: What do you say to the people who say, Oh look, if it turns out to be a great idea, you [00:30:30] know, Mega Corp Inc will come and take over.
Jack Ross: You know, it's for us to stop doing what we're doing because of the possibility of the big industrial farmer coming after us, that's just not who my brother and I are. We started this to really change the quality of food that's grown and you know, we're up for the challenge. We're really excited about all the different problems that this business entails. Be It in engineering, be it on the sales side or working against a competition. [00:31:00] We think what we're doing is really important to one, increase the sustainability of our food supply. You know, the way we currently grow food is not just sustainable and it's not gonna feed the increasing population and it's also going to harm the world that we live in.
Ali Tabibian: Let's talk a bit about cost, because I remember you've given me these numbers before, but let's have people to understand how much progress you've made on the cost side.
Jack Ross: So without going into too much detail, essentially [00:31:30] what we've been able to do is get our unit economics to the point where we're able to actually sell to the wholesale customers. Yeah. And that was really important. So what we focused on over the past year or so was getting to a point where we had enough margin to go after that wholesale market with great stability. And so those wholesale prices, they are a good bit cheaper than what you're gonna see in retail. And you know, there are some people that have tried direct to consumer to get that ultimate price point. But [00:32:00] we view going into wholesale as the way to get the largest volume and having that capacity will afford us the opportunity to do a lot of things.
Ali Tabibian: What have we not talked about that you want people to know?
Jack Ross: We've covered quite a bit. One of the things we'd love to talk about is how we're expanding our team, where we are looking for smart people to bring on board to really help us kind of create the next sustainable farm. We're [00:32:30] looking in particular for engineers with experience in automation, manufacturing line robotics, but also a lot of plant scientists. We believe that there's a lot to be done that hasn't really been able to have been done before because we can control environments to an incredible point of precision in that we can really start to test out different ways to grow things that can grow faster, to change the nutrient quantity in plants. And so yeah, we're looking for any smart engineer or plant scientists who wants to come on board and help us.
Ali Tabibian: Okay, so call for resumes. [00:33:00] You're looking for people and you're on your way to the moon, do you want people to go along?
Jack Ross: The moon and maybe Mars.
Ali Tabibian: You know, one thing that's fashionable in the bay area, sort of start up and venture capital community now is always to looking under the hood of the company and say, hey, is there something? Is there a part of what these guys are doing that's maybe just as valuable or can really contribute value to the whole, have you thought about selling your mechanical creations, patenting them, [00:33:30] productizing them, rather than selling the leafy Greens?
Jack Ross: We certainly do have a lot of IP that we are protecting. We plan on operating the farms for at least the first little while just to really ensure that we are creating the highest quality product and we have that very close loop of feedback. As we've talked to people from all across the world, we've realized that there's really a great demand for this internationally and that there are people that have expertise in expanding into different regions [00:34:00] across the continent and across the world. And so as we get farther down the road where we're certainly open up to opportunities of gathering some partners to help expand this via through franchising, licensing or some other method.
Ali Tabibian: Actually, that was the exact question I was going to ask you, is a franchisable idea, especially if you're able to brand the produce, which is happening increasingly frequently, I mean, you go to sort of mid scale in our restaurants now and they tell you what farm or what particular location the [00:34:30] ingredients are coming from. So that seems like a really interesting sort of hydroponics and a box type of perfect potential for the company.
Jack Ross: Yeah, we will be branding everything that we use. We've already established some great relationships with chefs and restaurant owners back in the mid Atlantic that are very excited to use our produce. And we just hope to expand that base as we grow.
Ali Tabibian: Great. You know, guys, it's been inspirational to have you here. I hope to enjoy one of your salads [00:35:00] soon. Which cities in the mid Atlantic do you think that will first happened?
Jack Ross: So we're looking around the Philly, Baltimore and DC areas. It's been a real pleasure. Thank you so much for having us.
Ali Tabibian: It's been exciting for me as I told you guys, it would be before. Great. Thank you so much. Bye Bye.
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