(Bio)engineering Better Beef: Josh March and SciFi Foods’ Quest to Cultivate Meat

Paul Shapiro: [00:00:00] Josh, welcome to the Business for Good Podcast.

Josh March: Thanks Paul.

Paul Shapiro: Great to be here. It is great to have you. We've known each other for many years, and I have only known you in the context of the cultivated meat area, although I guess when we first met, which I think was 2016, if my memory serves me correctly at the New Harvest Conference in San Francisco I guess we would've been calling it cultured meat back then.

So, I've only known you as a cultured or a cultivated meat guy. But you actually have quite a lengthy entrepreneurial history prior to being interested in meat. So I know that you have founded, several companies before this one, some of which were acquired, so congratulations on that. But they weren't in the.

Environmental or animal welfare or climate space, they had to do nothing with food or anything. So why don't you just first tell us what were the companies that you spent most of your career running and how'd you get interested in meat in the first place?

Josh March: Yeah, so, you know, it's, [00:01:00] it's, it's an interesting story.

When I, when I was at university, I ended up setting up, I got interested in kind of entrepreneurship and my very first real startup. Was, an e-commerce company that was actually doing eco and fair trade, goods, partly from Africa. Cause my mom was living in Kenya at the time that I was kind of patching up, packaging up nicely and, and, and selling in the uk.

I, I was only 20 and I was a law student with no business experience. When I tried setting up this company and, really had no idea what I was doing, and, the company essentially failed, I kind of figured a lot out and got it up and running and did make some money. It, it was making some money, but realized that I didn't have enough resources to do the company in the way I needed to be successful, and, and I had to shut it.

Paul Shapiro: and for how long did you run it before realizing it was going to shut down?

Josh March: It was probably like a year, year and a half or so.

Paul Shapiro: Yeah. Did you consider it devastating operational? Like did you, did you consider it devastating to see the company that you'd founded Shut

Josh March: down? yeah. It was a big [00:02:00] ego hit, you know, I was a pretty arrogant, kind of overconfident 20 year old, thinking I was gonna take over the world instantly.

Mm-hmm. . and so, , you know, I learned a lot of painful lessons from that failure. yeah, a big part of it being that I should listen to other people, , , you know, as I, as I was kind of thinking about. , all the things that had gone wrong. Yeah. I realized that there were, people had told me that I, every, I, every single mistake I made, someone had pointed out and I hadn't listened.

Paul Shapiro: The problem is though, that when you talk to people who actually succeeded, they'll say the same thing that all these people told me it would never work, and then they finally made it work. Right? So they proved all the doubters wrong, and so you, you know, you don't, you have no way of really ascertaining.

Whether you're in the camp that you were in, which is where they were actually Right. Or whether they, these other people just, you know, lacked the vision that the, that this particular founder had.

Josh March: Yeah. But you know, when I say listen to other people, they don't necessarily mean do what they say. Right.

You've gotta strike your own course and make your own decisions. But if, [00:03:00] if there are people with experience in the industry pointing out mistakes and challenges mm-hmm. , you should pay attention to that. Not necessarily as a reason to not do the business, but as a way to. Yeah, figure out, okay, well is this a real problem and do I, do I need to figure out how to solve it?

Paul Shapiro: Well, we're gonna get all into that actually later in this interview. Yeah, I wanna hear your personal story first. Cuz as you know, there are many people who are quite expert, who are saying, Hey, cultivated meat is never gonna work at scale. And I know obviously you disagree with that, so we're gonna get into that as to why you think these experts are wrong.

but first let's just hear, so you, your first company flopped then what?

Josh March: Yeah. And you know, that experience got me thinking a lot about, you know, why I failed and what I needed to do better. One of the things that I really felt that I'd failed on was online marketing and how to reach out and connect with customers.

And it was just at the time that social media was really kind of taking off and Facebook was exploding. And around that time, Facebook launched their first application platform that allowed third parties to build apps on Facebook that could [00:04:00] engage with customers. And I just thought that was a really unique and powerful way of connecting.

With people in a way that just hadn't existed before. and so I ended up learning how to code, meeting up with developers, starting building apps on the Facebook platform, and ended up founding an agency that became one of the first agencies in the world and to, to be building Facebook apps for big brands.

And we became a close partner with Facebook, and it became a, a successful, profitable agency in the uk. I realized that I didn't wanna be doing an agency. I wanted to be doing a company that could have bigger impact. and we had an idea to spin out a software company that would help companies do customer service, over social media.

and ended up spinning that company out as com called Convert Social. We ended up selling the first agency and raised venture cattle. for the software company, conversational, and I kind of ran that for, ended up running it for kind of eight, nine years or so, before stepping down and having it acquired.

Josh March: Mm-hmm. and then [00:05:00] launching scifi now,

Paul Shapiro: sorry. You know, there's lots of different acqui types of acquisitions, obviously, like, were these, financially lucrative for you as a founder or were they just benefiting the investors with the preferred shares? Like, did, did these have a consequential impact on your material?

Josh March: Well, you know, it, it was a decent but not an earth shattering exit. Right.

Paul Shapiro: Got it. So, but did you, you, did you, did you feel like you were well compensated for those eight or nine years?

Josh March: You know, mostly in how much I learned. .

Paul Shapiro: Ok.

Josh March: But, but certainly enough that, you know, I can afford a down payment on a house in San Francisco.

And, you know, childcare, I mean,

Paul Shapiro: a house center is, down payment on a house in San Francisco, I know is no small feature. So that

Josh March: is a, that is pretty impressive. So I feel very. For, for, for, for that time period. Yeah. Yeah. But,

Paul Shapiro: yeah. Nice. I will only note my parochial interest in this topic by asserting that Forbes did just name that the best city in the entire state of California to [00:06:00] live in is Sacramento.

So should you decide, so should you decide, you know, you wanna go, northeast a little bit, you, your welfare will improve. But anyway, So, you know, after a cover social gets acquired, you have, a little bit more cash in your pocket, and then you decide, I want to do meat. Why? Like, you're, you're focused on these types of companies that are helping, essentially communicate with customers, which is very different than wanting to rebuild the meat industry.

So, what happened? Like why, why were you even at the New Harvest Conference in 2016

Josh March: where we met? . Yeah. And that was years before actually Common Social was acquired, or I stepped down cause I was, it had been an obsession of mine for a long time. well the, the side story is that I'd basically been obsessed with the idea of cultivated meat for almost 15 years.

I actually, around the same time that kind of, we were spitting out con social and all that stuff was happening. I'd, I'd read a couple of, a couple of key books. The first book I'd read was The Singularity is Near by Ray Kurt. [00:07:00] and that book got me incredibly excited by the huge potential that technology could have to, like, make a huge positive impact on the world and change the world for the better.

Josh March: And g got me, made me realize that that could happen in our lifetimes. you know, the, the, the exponential, progress of technology meant that we could really have dramatic positive impacts on the world. . And around the same time I read this science fiction book, a player of games by e and m Banks and in, in e and m Banks's culture, futuristic kind of culture Society.

He talks about the fact that they cultivate their meat and they grow it in tanks instead of having to kill animals. That's cool. And, and as soon as I read that, it just kind of like, it was like a light bulb going off in my brain that I. as I was thinking about, oh, all this amazing change that could happen in the world through technology and like, how's the, how's human civilization gonna look like in the next 20, 30, 40 years?

I was like, [00:08:00] it can't just be that we're like cutting down the rest of the rainforest and throwing like billions of animals into factory farming. Like that can't be the fu. Like, that's not like the utopian future that I was like dreaming of. and it just seemed clear to me that a major part. That future had to be that we could figure out how to create real meat without the.

For all the environmental devastation and animal welfare issues of, of, you know, conventional and animal agriculture. that's

Paul Shapiro: real. It's really interesting that both, the combination of a non-fiction and a fiction book had this impact on you because, it read, singularity is near an, I don't recall Ksw talking about.

Meet in the book. so I was thinking, how, how did he get to that place? And, you know, I, I think about this a lot. The fact that it is typically novels that have the biggest impact on people. Like, you know, people think, oh, well, serious-minded people read non-fiction. But you know, if you think about the books that have had like the biggest impact, on readers in the world.

It's usually novels like Uncle Tom's Cabin The Jungle, 1984 [00:09:00] Animal Farm. Yeah, height 4 51. Like these kind of culture changing books are, are often novels. E even if you look at the Bible, it's basically just a collection of stories. Yeah. , and it's very rare. It's very rare that you find a non-fiction book, aside from clean meat, of course, that has a major impact, right?

No, I'm just kidding about clean meat. But, you know, you do see, like, there are some non-fiction books. animal Liberation by Peter Singer is one that has, you know, been, truly transformative. but e you know, even on the right books like, Atlas Shrugged and Fountainhead are, are really like considered canonical by a lot of people.

Yeah. Transformative effect on them. And so anyway, I find it interesting that it was a novel that helped to spark your interest here rather than reading, you know, some nonfiction book on the topic.

Josh March: Yeah. And you know, I, I think that, especially science fiction, right? If you're working as a entrepreneur in technology, you know, how, how do you think about how, what, what kind of future do we wanna.

And you know, science fiction authors are there spending all day, [00:10:00] every day thinking about how the future could look, right? And so I think it's an amazing source of inspiration.

Paul Shapiro: Well, if you're interested in futuristic books that do touch on this topic, I'll make a recommendation to you. called Tender is the Flesh, which is a, a short novel by an Argentinian woman named, I think her name is Agat Baka.

but I read it and absolutely loved it. but I don't, I don't wanna give anything away, but it, it's, it's not so much about cultivated meat as it is about, so-called defective humans taking the place of. Like for all the uses that we use animals for today. but it's you know, it's quite a compelling story.

Paul Shapiro: I, I, I found so cool. If you're into, if you're into future of certain. Okay, cool. So, alright, so, so you're reading Player of Games, you're reading Ray Curve as well, and you're like, okay, maybe we can actually make this a reality at that point. I mean, I, I presume this was after 2013, so the Mark past Burger had already been debuted, so you may have been familiar with

that

Josh March: or is that not true?

No, it was actually, it was actually before, quite a bit before 2013. and that we we're probably talking. , [00:11:00] 2009, 2010 that I, that I read those books and started thinking

Paul Shapiro: about this. Right? So New Harvest, exi, new Harvest existed, but there was no, nobody really doing this in the commercial sense. Yeah. And, and even really in the academic sense for the most part.

Josh March: Yeah. And so I actually felt like, I didn't realize that anyone was kind of thinking about it. And in my mind I was like, all right, I'm gonna have to figure out how to invent this technology. And so, you know, my. Kind of secret plan back then was, all right, I'm working on these like social media software companies will have to make a load of money this way.

And then you pile that money into figuring out how to make cultivated meat reality . now, so that was, that was kinda my plan for years now, you know, company ended up, ended up taking a lot longer than I thought. You know, it was a kind of overall between those two companies. It was like a 12 year, 12 year journey.

and within that time I started to hear. Other scientists and entrepreneurs working on cultivated meat. They're obviously the Mark Post Berg in 2013, but then especially [00:12:00] 2016, which is when New Harvest did that first conference in, in San Francisco, that was really where I kind of met a lot of the, the, the early players.

and at that point, I did, I wasn't sure if I would need to go and do a company in the space, honestly. And I was like, great, like maybe this is happening without me. Like my main goal was wanting to see it in the world. and so I started doing a bit of investing and a bit of advising and became a donor to New Harvest.

Josh March: And I was like, maybe I'll just be a supporter. and I spent a number of years just spending time with the people and learning as much as I could about the science and the biology and the technology. and over that time I really started to, I kind of came to this conclusion that there were some pretty major challenges that I felt were gonna prevent, cultivated meat from really reaching the impact that I knew it needed to have.

and I kind of, especially around the cost of cultivated meat, and I felt kind of a bit disenchanted what I was seeing in the industry and honestly started to feel [00:13:00] like I needed to go launch a company in the space myself, in order to make it happen. It's maybe a little bit egotistic and messianic, but, but that's kind of the truth of how I felt

and it was really that, that drove me to say, okay, I need to get on this and, and do a company s a p. .

Paul Shapiro: And so the company was originally called Artemis Foods right before you changed the name. What, what is the, why the Greek goddess of wildlife? Like what is, what is it about Artemis that led you to, to call your company

Josh March: this?

yeah, you know, I mean, at the time I knew that hey, this is gonna be a consumer company and we're gonna have to do some real work on branding and brand strategy, right? And so when we first started, we were in stealth and we just kind of needed a placeholder. And, I'm a fan of a lot of the Greek myths and stories.

Josh March: Mehi listening to a book on them at the moment called Mythos, which is awesome. I'm really enjoying, it's kind of a retelling of the Greek, the Greek stories. Oh,

Paul Shapiro: cool. Is it, it it, is it like a retelling that kind of is like a modern version looking at [00:14:00] some of the villains who actually maybe aren't Villainist?

Or is that a different book that I'm thinking

Josh March: of? I think that's a different book. It, it's a, it's a great book by Steven Fry, who's like a UK treasurer. Yes. Intellectual. Yeah. And it's basically, it's, it's, it's retelling the original stories. It's not updating. But it's just Got it. He uses his own words and references modern stuff.

Got

Paul Shapiro: it. There. Yeah. There, there, yeah. There, there is a different book. I'll include it in the show notes at business for good podcast.com because I, I too am a, a fan of Greek mythology and, I haven't read this book, NorCon, I remember the name now. But again, I'll include in the show notes, which is basically like a more woman centric telling of the Greek myths and oftentimes many of the female.

Gods are not portrayed in the best light back then, so it's a different re retelling. but anyway. Alright. Mytho, so we'll include a link to that book

Josh March: also in the notes. Yeah. And Art Myth is obviously of goddess of the, of the hunt and wild animals. Mm-hmm. . So it felt, it felt fitting nice as a placeholder.

Yeah.

Paul Shapiro: cool. alright, so, y uh, you know, we don't need to like belabor the name change issue. [00:15:00] Obviously companies, change their names all the time. In fact, I'll, I'll mention there's a, an updated paperback edition of Queen Meat that is coming out and this is really the first opportunity to update the book in the last five years.

And, One of the updates, it's like all these companies have changed their names. You know, it's like Memphis Meats and Clara Foods, all these companies out now, they're upside foods in every, and so there's a lot of just, and, and in the book it's Hampton Creek not eat. Just so that's like one of the, the key things that is, getting changed here.

But a aside from that, you know, let me ask you, as we get into the, the cultivated meat of the matter here, Josh. So you and I met in 2016. If I had said to. seven years from now in the year 2023, what percent chance do you give to cultivated meat being for sale? Somewhere in the United States? Mm-hmm.

not on Walmart shelves, but just for sale anywhere. What would you have said in in 2016?

Josh March: Well, you know, in 2016 I would've said a hundred percent, you know? Wow. Uh,yeah. You know, I was kind of, you know, wide-eyed, bushy tail. Kind of [00:16:00] excited about everything that was going on. Now, if you'd asked me a couple of years after that, I, that, that percentage would've gone down significantly.

Oh

Paul Shapiro: yeah. If I, what about in 2020? If I had said that by 2023, will anyone be selling it at all in the United States?

Josh March: Yeah, I maybe would've given it a 25% chance. Huh? Wow.

Paul Shapiro: Pretty low. Okay. I think so.

no, I think, I think that's fine. Obviously right now we're seeing that, that that almost definitely will be right.

Josh March: Upside will be selling with chicken, I think in the next few months I would be, I, I would guess. Mm-hmm. .

Paul Shapiro: Yeah. So, let's hope so. I mean, people have been saying it's months away for some time now. but I, you know, yeah. Nobody hopes that's true more than I do. of course. but you know, I wanna ask you like why, and then we can get into what Sci-Fi is doing that's different from everybody else and why you felt the need to come in and do your own company.

But why? , you know, there was so much optimism. There's been a ton of money poured into the space. Why is it n not just the lack of regulatory approval? Because even, even if upside is [00:17:00] allowed to sell, it still is gonna be, you know, a very tiny amount that is being sold, right? Mm-hmm. like, you know, there's, I mean, it's the industry.

Even under optimistic projections, it's gonna be less than 1% of the total volume of animal-based meat for maybe another decade or so. I mean, there's a hundred billion pounds of animal-based meat that's produced in the US every year. . So, you know, to get to a, if you look at, you know, what companies like, believer and Eat, just, they say they're building these huge plants that will be able to produce tens of millions of pounds.

So, you know, when you combine them all, maybe you get to a hundred million, so you're, you know, not even a 10th of a 1% there. so the question is why, like, why is it taking so long and what do you think are the hurdles that you are going to overcome to change that?

Josh March: Yeah, yeah. Fundamentally it's around cost and.

right? It's how can you scale up, you know, sell culture, and do it cheaply enough, right? Because a food product, any food product, including meat, is fundamentally, a [00:18:00] cheap is cheap, right? Even premium meats are still extremely cheap. Even blue thin tuna is still extremely cheap when compared to the cost of cell culture as it's been done for decades in Biop.

Right. And so you really have to take something and, and figure out how to drop the price by orders of magnitudes and sometimes increase the scale by orders of magnitudes. And the reality is, if you look at the history of biomanufacturing and fermentation, you know, getting any biomanufacturing product or process or sell line to real manufacturing scale is incredibly challenging.

You're talking about years of work, years of investment. sometimes a lot of risk as you're, as you're scaling up, right? It's not something that is easy. and the kind of default way of doing that in cultivated meat, makes it even harder. and there's a few parts of that. You know, first, a lot of companies are trying to do that without any kind of genetic engineering.[00:19:00]

and yeah. My essential conclusion, and we'll talk about this more is. , that's just not really viable, right? If you look at any, any biomanufacturing cell line, whether it's fermentation or not, that, that, that can be scaled up and produced at scale, it's generally a pretty engineered cell line in order to do that.

for, for animal

Paul Shapiro: cells, right? Yeah. And even not

Josh March: necessarily, yeah. And bacteria and fermentation as well.

Paul Shapiro: Yeah. The use, well, I'm just, I, I'm just thinking, I'm only playing devil's advocate as, as, listeners will soon hear, or listeners who have been listening for a while know I got, I'm, you know, I, I think bioengineering is essential, but just as a counter example, I mean, corn, Q U O R N for decades has a massively scaled industrial fungal fermentation operation where they sell products for only dollars a pound.

That's true with a, with a wild strand of fungi that has never been n not only. Bio-engineered, they haven't domesticated it in any way. Not any natural select, not any directed selection at all.

Josh March: Correct. Yeah. Yeah, that's a little different [00:20:00] cuz it's actually growing the kind of yeasts, the product or the back, sorry.

The co the, the mycelium in that case. The fun guy. The fun guy, but itself as opposed to like precis implementation where you're trying to get a cell line to produce something else.

Paul Shapiro: Or cultivated. Yeah, very much so. Very much. Agreed. And just for people who are, are not initiated, we're talking about the difference between growing essentially, you know, the organism for itself called biomass fermentation, or using the organism as basically a factory to produce something else.

It, it's kind of like having the chickens for the chicken meat or the chickens for the eggs. Right. And so in some cases you're doing precision fermentation to have the chicken lay a special kind of egg that you want and some, you know. Yeah. Whether it be an animal protein.

Josh March: Exactly. And you know, obviously in cultivated meat, the cell is the product as well, but you're asking that animal cell to grow in a situation which is extremely unlike the situation those cells normally grow in.

Right. And so, and, and this is one of the big realizations we had, is that when you take a cell from an [00:21:00] animal, from a, like a cow muscle, right, that cell has got all kinds of characteristics, and behaviors, which fundamentally have got nothing to do with how it. , but which, do make it extremely expensive and complicated to try and produce outside that cow.

and, and that's where we think genetic engineering plays a really important role in figuring out how to solve those problems. So anyway, that's, Let's say there's more problems. So what is, stop that one. . .

Paul Shapiro: Oh, let's talk about that. Because, you know, I, I think arc under, like, you know, the, the common view of people is like, well, if you take these cells out of the animal's body and you put it in a cultivator that is the same temperature in the same pH, the cell basically thinks that it's still inside the animal's body and it does what it would normally do, which is grow into meat.

And you're saying it's a whole heck of a lot more complicated than that. One of the reasons I presume you're saying that is because you need cell densities that are just, you know, way, way higher. People typically get in these bioreactors. Is that accurate? Yeah, I'd say there

Josh March: are three key challenges.

There's obviously more, but there are three [00:22:00] key challenges. when you take just the kind of muscle cell, you know, the first challenge is that cell naturally only wants to grow attached to other cells or a surface, right? And so you can grow it, you know, on, in 2D, in a flat layer of, of cells on a plate.

but if you wanna manufacture it, you need to grow it in a biatta, right? It needs to be floating and liquid where you can get it to meaningful cell densities, not just attached to the outside of the biatta, where you'll get almost nothing. So that's the kind of first fundamental challenge of cultivated meat.

Josh March: Can you even get your cells to grow in a biatta? you know, if you can't do that, kind of forget about it. the second challenge is that, you know, animal cells will only grow when they're being told to grow. and they're being told to grow in the body when they receive certain signals. Those signals come in the, in the form of hormones or growth factors, which if you wanna reproduce outside the animal, you're producing those recombinantly and they can be extremely expensive to produce thousands, maybe even millions of dollars per gram.

And ultimately, we [00:23:00] realized that the price of those growth factors needs to be reduced by about a thousand fold in order for cultivating meat to actually become kind of afford. That's another challenge. And then the third challenge is, yeah, even if you've solved those and you've got your cells growing in barta, the normal metabolism of the cell limits the cell density that they can grow at.

And if you don't get, if you don't have a certain high cell density, then you are gonna need to spend huge amounts of CapEx on barta. . and that really becomes important as you're looking at the financial model of, you know, Hey, how much can you actually spend on a production plant and what kinda revenue you're gonna get from that.

What's the i r like, it really becomes a very important part of the model. And so if you can't get su and cell density, again, the financials just don't make sense. And so you really need to solve all, all, all of those problems. ,

Paul Shapiro: right? So, you know, what do you think if you're pitching investors and you're talking about your rate of return, you're gonna build a factory and how many years is it gonna pay for itself here?

Is it you? Single digit years?

Josh March: Yeah, that's single. That's the goal, right? There's, there's certain [00:24:00] hurdle rates when it comes to i r R, and those kind of fluctuate depending on the economic environment. But, you know, you've got to have really positive i r r on your, on the CapEx you're spend. to show that it's gonna be a, a worthwhile investment and yeah, ultimately.

Yeah. And one of the things that I think is really important for the industry and anyone in in biomanufacturing is you have to, you have to map out those numbers. You have to do a full, what's called a techno economic. Assessment. Yeah. Or analysis where you understand all of the unit economics, all of the inputs, all of the behaviors of the cell, all of the CapEx going into the bioreactors, all of the energy usage, the staffing.

You understand how all of that feeds into the financial model, um mm-hmm. , and you really need to get down to the smallest details to understand that.

Paul Shapiro: Cool. And yeah, just, just for those who maybe aren't as financial illiterate, I just wanna say I rrr this is internal rate of return. So basically, you know, how quickly can you pay this thing off in the, for the, what you're calling the CapEx or the capital expenditures here.

So if you're gonna spend a hundred million dollars making a [00:25:00] cultivated meat plant in, you know, how many years will you have a hundred million dollars of profit basically from that plant that that pays for it there. Correct. So you're using, bioengineering in order to overcome these hurdles that you were mentioning.

Basically, to get the cells to be happy in a suspended state, to get them to grow at, far denser, cell densities. Mm-hmm. than they would normally grow at. but still, you're not talking about making a whole burger out of animal cells. Right. So what is it that you wanna make? Because I, I looked at the, the lifecycle analysis that you all did, and you're talking about essentially a hybrid.

That is partial, partially animal cell and partially plant-based. and so I'd love to know like what is it that you intend to make? Like how, how meaningful of a contribution are the animal cells and what are they bringing to the table? Like how is it better than an

Josh March: impossible burger? Yeah. So look, uh, my dream, right, and our goal as a company is to eventually get to the point where we can produce a hundred percent cultivated meat and we can produce any kind of meat product at scale and affordable, in an affordable way.[00:26:00]

There are a number of steps needed to get there, and the first step is gonna be blended products that are still mainly plant-based, for which use cultivated cells essentially for flavor, right? To bring in the fats and the proteins that are responsible for the flavor and experience of meat. And we found that we can actually have a pretty transformative effect on the flavor of essentially a plant-based product.

Even with pretty small inclusion rates. Have a kind of 10, you know, 10 percent-ish, 10 to 20% inclusion. you know, it really masks any of the kind of plant-based off notes and creates all of these kind of beefy, meaty kind of smells and aromas and tastes, which just don't otherwise are really lacking.

And you get to the point where it just tastes like beef in a way that even the Impossible Burger, which is the best plant-based burger, still doesn't, you know, it's in this kind of uncanny valley where you close your eyes. You bite the actual burger and it still basically tastes like plant protein. and our burger, they taste like beef.

Paul Shapiro: Yeah. [00:27:00] Well, I, I can't wait to try your burger. but I, I will tell you that, I have a test for all these products. I call it the Eddie test. So this is relating to my dog, Eddie. Okay. And, he is a vehemently anti plant-based meat dog. Yeah. He will not let it pass his lips. He does not care. You can, you know, cook in any way.

It doesn't matter. He hates plant-based meat, however. He's very happy to eat impossible products. And so I thought, I, I theorized it must be the heme in the burger that is actually like sa satiating his meat tooth. However, he's quite happy to eat the impossible chicken nuggets too, even though they don't have heme in them.

So I, I don't know what impossible is doing. But I'm telling you, this is a very discerning dog who hates plant-based meat, normally , and he's very happy to eat. Impossible.

Josh March: So maybe he likes meat. Maybe he likes, yeah, maybe he likes soy and doesn't like pee, which is something

Paul Shapiro: that, yeah. You know, maybe that's so, but I've given him many soy based, products that, you know, he, he doesn't want to eat garden.

He doesn't want to eat. Boca. Yeah. You know, other things that have soy, he, he's [00:28:00] not into it. So I, I, I will do an impossible. Yeah. This would be a pretty expensive test to do, but an impossible and a sci-fi product for him one day. And,

Josh March: I'll tell you what, it's not, it's actually not that expensive anymore.

So when you, when you, when you come down, visit the lab, obviously he can't come in the lab, but he can come into the office. Yes. And we can, we can bring some burgers. Try this.

Paul Shapiro: This reminds me of the old hit job on, what was then Hampton Creek when Bloomberg reported, like they had, Josh Hettrick's dog was in the lab.

You, I don't know if you remember this, it's like, it's like back in like 2016 or 17, like the big scandal was that his dog ran in the lab. but no, will not go in a lab, I promise you that. but yeah, it'll be fun to do. So you're making a blended burger that's 90. Plant-based and 10%, with animal cells.

And, and you think that 10% of animal cells are, these are all, muscle or some of them an animal fat also, or is all the fat plant-based? Yeah. Well,

Josh March: so let me talk a bit about why we're doing this and why this will be, these will be the first kind of products that really will exist in the market. Full stop, not just with us.

you know, there are two, there are two [00:29:00] challenges when you're talking about a hundred percent cultivated meat. One challenge is just. , right? So we just had this whole conversation talking about the CapEx and the i r right? We, one of the outputs of our own techno economic modeling was that, you know, if we assume the progress that we know we can make through bioengineering and we assume kind of standard bioreactor technology today and, or, you know, cost of inputs that are, that we know are true today, then you can get the i r to work on the CapEx for like a a 10 ish, 10, 20% inclusion.

Josh March: Right. That works financially. but if you increase

Paul Shapiro: that, when, when you say get the I r R to work, how many years of the payback is that? Five years, 10 years. Like

Josh March: what, what does it mean to work single digit year? Paybacks kind of i r r. Okay. Get, you know, above the kind of 16, 17% kind of hurdle. Got it.

Which is common. Okay. Right. but you're still talking, if we're talking about a facility that could make a hundred million burgers a year. Right. You're still talking 150, 200 million [00:30:00] of cap.

right. So a a and just to be clear, a hundred million burgers, presumably they're quarter pounders. Correct. So that's 25 million pounds of product, 10% of which is animal cell.

Paul Shapiro: So, you know, 2.5 million. pounds of animal cells basically for, for a CapEx of, what were you saying? A hundred million dollars? I think 150. 150. 150 million. Okay. Yeah. So 150 million basically to produce two and a half million pounds of animal cells? Correct. Now.

Josh March: Got it. If you're making, and you know, you can, how much can you sell a burger for, you know, $2 a Quarter Pounder burger maybe.

Right. is our projection now, if you're talking about a hundred percent cultivated times, that CapEx by. For the same revenue, right? So you're talking about one and a half billion dollars of CapEx at today's ettes technology. , the IRR on that does not look anywhere close as good . Right. You're not gonna get financing for that kind of facility.

Paul Shapiro: Right, right. Yeah. You essentially need like, you know, government grants of, in massive amounts or, or government, low interest lens in massive amounts, like the kind [00:31:00] that, so lender got, you know, like couple hundreds of millions of

Josh March: dollars, right? Yeah. And, and that's just one of the problems, right? Because all the stuff we've been talking about today is just how do you grow a lot of cells in bios?

But when you take those cells out of the bio acid, what do you. , you have individual cells, right? So those individual cells may be incredibly tasty beef cells with all the, the fats and the proteins that create that flavor and experience of meat. But they're not tissue, they're not 3D structured muscle tissue and fat tissue.

And if you wanna make a product that's, you know, a hundred percent cultivated, even if it's not structured right, you, you need to have that real texture. and the technology to create that kind of structure. Today, the kind of tissue engineer. Ultimately, it's still very small scale, very expensive, and not really scalable at all.

Now I am, I, I've, yeah, I'm privy to some new technology that is being worked on by various companies, and, and various like B2B players, and there are, [00:32:00] New bio reactors and technologies being developed that over the next five to 10 years I think may make some of that creation of 3D muscle tissue viable.

But the technology that people are using today is very small scale and very expensive. And no end. No end near ready to ready to actually go into manufacturing.

Paul Shapiro: Interesting. Yeah. Our, our February 1st episode for 2023 was with Taryn Wolf, the c e o of Matrix ft, which is one of these B2B players that you're mentioning, which is basically making micro carriers and scaffolding agents and so on for, to sell to companies like yours, asserting that they can, help overcome some of these challenges that you are, discussing.

So we'll include a link to that in the show notes for this episode as well at Business for good podcast.com. So let me ask you then, , who's the audience? Right? So for a burger that's partially plant-based, partially animal cell culture, is it the same audience like, you know, for a, an impossible burger? Or is it a different set of people who might be interested [00:33:00] in that type of hybridized

Josh March: burger?

You know, I think when you look at the plant-based meat industry, it's interesting. Well, cause if you zoom out and just look at what's, what's happening with just people in America, right? almost 50% of the population now considers themselves some kind of flexitarian. people are, people don't wanna stop eating meat, right?

They, they just, they just don't, they, they generally love the taste of meat. They love the experience, the cultural, whatever it is, like every, everything around it. and I include myself in that as well. But people are increasingly aware of the challenge, the problems with meat, right? The problems with deforestation, the problems with factory farming, the problems with climate change.

And often, you know, they, they want to make a better. But the way that, you know, buying food ultimately is an emotional decision. And when it comes to those kind of intellectual things about being better for the world, right, they may agree with that. But when it comes to buying a burger, ordering a burger in a restaurant or whatever it is, you know, they don't wanna make a [00:34:00] sacrifice.

And, ultimately, taste is a major part of that. And I really view taste as one of the biggest inhibitors along with price, but taste being one of the biggest inhibitors to people, buying alternatives. And I think there's so many people have tried meat alternatives, and plant-based meat over the past five years.

Like almost everyone's tried it. , but it's only a relatively small percentage of meat eaters who've continued buying it regularly. Right. And ultimately it's that repeat rate, which is, you know, really what drives the successful failure of a, of a company over time. And you know, the taste just hasn't been there yet.

Yeah. And so I really see blended products as being able to dramatically increase. The market size for meat alternatives by just tasting better.

Paul Shapiro: Cool. I, I, I see that too. I, I concur with your assessment that, you know, basically if, if it's true that 10%, like if in blind taste test focus groups, 10% animal cell inclusion to, you know, even to an impossible burger, let's say as an [00:35:00] example, you know, back to back if it was dramatically pre preferred on taste, I think that.

Yeah. Yeah. Totally transformative. And

Josh March: we, we do blind tastes all the time internally. Obviously we can't do it with consumers. Mm-hmm. and, you know, adding, adding the cells to our plant-based formula creates like major incre improvements in taste in ar, romos, and overall liking.

Paul Shapiro: Oh, I, I, I can't wait to do such a taste.

My, such a taste That's right. Myself. Anytime I, I I'll, yeah, I just wanna mention, you know, you, you, you commented just a minute ago that, you know, a huge portion of a, of people self-identify as flexitarians. And I too see these same polling,responses, but sadly, I, I, I do think. What people tell pollsters about their behavior is more aspirational than actual a hundred percent, you know, has to be easier.

You know, like, yeah, like, I mean, the facts are that meet demand on a per person basis in America has never been higher than it is today. Like it's. Literally in increase virtually every year. Yeah, every year there's a period, but yeah, there was a period between 2008 and [00:36:00] 2014 where it actually did go down somewhat largely, you know, just in the aftermath of, of the recession for economic reasons.

But people have shown, like they'll eat about as much meat as they can afford. Yeah. and that's true, that's true cross-culturally. As countries come out of, living in, the undeveloped world and they start joining the developed world and start developing a middle class, like one of the very first things they do is just start eating a lot more meat.

And so I, I do think, like, you know, I, I have some friends, who are vegan as I am, who are, you know, very optimistic about the world, you know, changing and, and, and becoming vegan. But I, I share your point of view, Josh, that that's e e extremely unlikely. and I just think. People want meat. so we need to find ways to produce it for them.

I, I do wanna ask you, you know, I, I, as you will remember, I was in your audience for a talk that you were giving at the Reduc Summit back in May of 2022 in San Francisco. And you were very passionately. Defending, bioengineering as a strategy. Yeah, and you know, there've been a lot of companies in this space that either don't want to talk about it, or they don't want to use it at all [00:37:00] because they're afraid, they're afraid that, it'll turn off.

Consumers, you've made a very different decision. Why, why do you think that consumers either won't care or, or might even prefer the product because of

Josh March: it? You know, ultimately, if a product isn't affordable and can't be produced at scale, then it doesn't matter. And you know, my conviction after the last seven years being in this industry is that without the use of genetic engineering, you won't be able to produce a, a product that actually is at, at price parity with conventional meat at any kind of meaningful scale.

and you know, that's a bit of a controversial opinion in the industry, but I, I really, fundamentally, quite strongly believe that. And, and so I view it as an essential, right? And so what, what are they gonna choose versus the genetically engineered, cultivated meat that's on the market? And is it price parity or the one that's.

Josh March: Not being able to scale up or just is 10 x the price of conventional meat, they're gonna choose the one that's that's, that's affordable and available. And I think impossible [00:38:00] versus beyond is a great example of this, right? Impossible. A very proudly G M O, right? They use GMO soy. They're genetically engineered yeast to create their heme protein.

They talk about it very openly. They talk about. Why they're doing it and the benefits, and they sell it in Burger King and no one really cares. And most people, you know, much prefer the Impossible Burger over a beyond, which is proudly non GMO because the Impossible Burger tastes better. Right. And that's ultimately what people actually care about.

Like people, especially in the us, huge amounts of GMO food. And again, they'll tell AOL if you, if you ask them, you say, do you want to eat GMO food? People say, no, I'd prefer not to. But then when they're walking down the aisle and or choosing a burger to order, that's, that's not what they actually think about or care.

Paul Shapiro: right? Yeah. I, you know, you're, you're making a case, with which I strongly identify myself, and I would go even further. you know, polling shows that 80% of Americans want food that contains dna n a to be labeled Yeah. . And so, of course, you know, ev every food contains DNA n a, right? Like, people just don't really, you know, you know, it's, it's asking [00:39:00] too much to ask consumers to be so scientifically fluent.

Yeah. Things, things that sound sciencey, like, you know, d n a or bioengineering and so on. It kind of, it, it, it, it sounds like it's something scary, when, of course to the scientifically literate it's, it's not, but for most people, I think it's asking too much to, you know, for them to. Really comprehend, you know, biotechnology and so on.

The, the real question is, is it safe? And that'll be up to the FDA and its expertise to judge on the merits of the safety, not on public opinion, but on actual science showing, whether something is safe or not. And I think your example about impossible is very apt, which is, you know, to be perfectly honest, I actually like eating beyond because it tastes less like meat to me than impossible.

Right? Obvi o obviously, my dog feels differently, but. . you know, I, I, you know, having been vegan for, the last 30 years, I, I don't have a strong desire to have something that tastes identical to meat. but I, I, I like the taste of meat and if I, you know, I'm traveling and there's a [00:40:00] Burger King, I'll certainly get an impossible whopper for sure.

but you know, I, I do think like we have to go not based on what people tell pollsters, but what people actually do, hundred world percent. It actually, yeah, it kinda reminds me also of. Interestingly in, in California there have been a couple, votes of the populace on eggs from Cage tens. And in 2018 there was a ballot measure called Prop 12.

Paul Shapiro: Two-thirds of Californians voted to make it illegal to sell eggs that came from cage. Tens. Two-thirds said it should be illegal to sell the eggs Hmm, of cage tens. And of course, 90% of the eggs sold in California at that time were coming from cage tens. So, you know, people were voting to ban the very thing that they were.

Yeah. and of course, as somebody who cares deeply about animal welfare, I'm glad, I'm glad the vote went that way. but it's just a great example of, you know, how we act in the voting booth or when we're in telling pollsters is very different from what we do as consumers, which is basically go on ta taste and price.

let me ask you, Josh, you mentioned a moment ago that. You know that you are, not a vegetarian, that you [00:41:00] do eat meat, which is somewhat different from many of the founders in this space. Yeah. Like many of the founders in this space are people who are, vegetarians or vegans. They often came out of the animal welfare NGO world or the environmental or climate movements.

but that's not you. So what's the motivating factor for you? Like you, you've said in interviews that, you know, funding, you know, is not why you're doing this, which I am sure is true. So what is like the motivating passion for you to devote your wife to this?

Josh March: Yeah. You know, as I said, what what initially drove the obsession was just this feeling like this was the future we had to build.

And, you know, I, I, I eat meat, but I'm very aware of the environmental devastation. And a big part of what drove me, kind of really triggered me to kind of make the switch eventually and do it myself was really just feeling con so, such concern about how bad a direction the world is moving in from a climate change perspective.

and a recognition that this is one of the most important elements for solving that problem [00:42:00] and one that I felt needed, needed extra help to do. and, you know, while I eat meat, I'm, you know, absolutely not a fan of hatchery farming, right? I think I do think fit in 50 years or however long it takes, we're gonna be looking back and just thinking, that it was such a moral blight on humanity to be.

Yeah, stuffing billions of animals into these terrible conditions and, and slaughtering them in terrible conditions. and again, that's just not, that's not the utopian future that, that I want the world to see. and you know, ultimately I think that there is actually a lot of benefit for me as someone who eats meat to be, to be the face of, of these kinds of products.

You know, I think one of. One of the big challenges for plant-based meat has been a struggle to reach for a lot of middle America. . Right? And it's, it's something that's done really well among the kind of coastal elites and the food innovators and the vegans and the, and the vegetarians and the hardcore [00:43:00] flexitarians in la and New York and San Francisco.

And, but why is, why has plant-based meat and meat become part of the culture war, right? Why, why, when impossible launch new products are there people with pro meat placards kind of protesting in front, right in front of the restaurants, right? I think language is a big part of that and there has been this really kind of anti meat rhetoric, around plant-based meat.

And it's understandable, right? Cause there's a lot of passion and excitement around that. But if you want to switch the habits of the kind of, you know, the normal, the normal people who like their burgers and like their beef and like their barbecue, right? It's, it's a hard message to be getting. From, you know, no offense, but kind of from a vegan activist, right?

Telling them that they should not be eating their meat. and

Paul Shapiro: I, I, I, yeah, I, I, I gotta assure you, Josh, I don't take offense. in fact, I have, I've joked for many years that, I, I'm not the person who made up this joke, but I do repeat it, which I find funny. and, and sadly sometimes true. do you know what the biggest impediment to widespread veganism.[00:44:00]

Josh March: No, but I, I think I can tell what you're gonna say. Yeah. Be good . Yeah. Yeah.

Paul Shapiro: Yes. Yeah, yeah, yeah. yeah. Yeah. It's just, it's sadly is, is sometimes true. so, in, in addition to, defying the odds and trying to. You know, grow cells at a density and in a manner that has, not been done before. so at least from what we can tell from what these companies say publicly, you also defied the odds and raised a ton of money in the middle of 2022, which is a very difficult time to be raising cash, because it's a economically wintry time.

And VCs had their doors locked shut for the most part, but not. you raised a 22 million round, congratulations. This had, happened on the heels of the, the now famous or infamous, depending on which way you look at it. counter story, about the technological lack of feasibility for cultivated meat.

So with such a negative. Environment for fundraising coupled with a negative environment on, you know, this, lack of optimism for, cultivating animal sales for commercial food purposes. What was your pitch, [00:45:00] like h how did you make this argument that you were the one who deserved tens of millions of dollars to actually prove the skeptics wrong and say, Hey, actually, This can be done.

Josh March: Yeah. Well I think it's interesting cause this actually takes us full circle back to the beginning of the interview when I was talking about, you know, the need to listen to, to skeptics and, you know, we are a little different in the cultivated meat industry because, you know, when David Humbard released his techn economic analysis, which is, you know, the kind of basis of that counter article, we read it and we agreed with it.

It, yeah. Largely lined up with our own techn economic analysis and, you know, essentially the conclusion was a hundred percent cultivated meat. If you're not using any kind of genetic engineering and you're assuming today's supply chain and, and bette's technology is not commercially viable, and we, we came to the exact same conclusion, right.

That's why we're creating blended product. That's why we're using genetic [00:46:00] engineering, and ultimately we have a techno economic analysis that shows how we can create a profitable and affordable product at scale. Using the same assumptions that David Humbard uses in that tech economic analysis. Mm-hmm.

Paul Shapiro: and interesting. Yeah. So you're, you're saying at scale you can make it profitable and affordable, but what about now? Like, you know, the famous, 2013 Mark Berger, you know, it costs 330,000 US dollars. Now, of course, that was just a hundred percent Cal cells. Like it wasn't a blended product. It didn't have even any fat in it at all.

Pure muscle cells. but what's the sci-fi burger cost to produce today? Like a 10 90 hybrid product?

Josh March: Yeah. So, you know, beginning of last year, before we'd achieved this big milestone around suspension, single cell suspension, it was still $10,000 a burger by the end of last. So 20. Yeah, by the end of last year, year.

We've got it down to about 200, $250,

Paul Shapiro: $250 a burger. So basically a thousand dollars a pound. Yeah.

Josh March: And if it's a quarter pounder and, and this year, we were on track [00:47:00] to get it down to about $10 a burger. By the end of the year.

Paul Shapiro: By the end of 2023. Yeah. Correct. Great. Exciting. Oh, that's really exciting keeper than I

Josh March: thought so, yeah.

And our goal over the next few years is to get it down to a dollar. .

Paul Shapiro: Nice. Well, it, it already at present, if that's true. It's a, you know, it's a lot cheaper than I thought, so I'll feel less bad feeding it to Eddie for, for his, for his, his, we'll make him a slide up. . . That's fine. That's fine. It's just for science.

that's cool. Yeah. You know, if you, if you're into Greek mythology, maybe this hybrid product, you know, the first one will be called a centar or some other hybrid, animal that you could put in there. that's cool. Well, congratulations on the fundraising. Exciting, for you as a founder to be leading the company and to have that type of, fundraising completed in such a difficult time to start scaling and, and trying to prove that this can work at greater and greater sizes.

Paul Shapiro: So, I'm very, I'm very encouraged to hear that. And of course, we'll be rooting for the success of the company. You've named some books [00:48:00] during this interview that I will include in the show notes at Business for good podcast.com. For somebody like you who's had, been a, a serial entrepreneur with several exits, is there, any resource or resources, Josh, that you think would be good to recommend if somebody says, Hey, now this guy's had two, two companies acquired.

He has tens of millions of dollars for a third company. This guy must know something. I don't know. What resources might you recommend?

Josh March: Yeah, you know, there's a book which I read in my early twenties and I, I still reread every now and then. and, you know, the title is not a great title in some ways, but it's purposefully, kind of slightly ironic, but it's a book called How to Get Rich by, Felix Dennis.

And it's a kind of anti, it's kind of an anti self-help book. Felix Dennis was a very successful entrepreneur, UK British entre. although he did a lot of stuff in America as well, did a lot of different companies and it's kind of a book of his personal journey and his kind of, it's kind of his memoir and his story and his advice to kind of [00:49:00] young entrepreneurs, and I feel it captures the kind of heart of being a founder and the challenges of being a founder and the sacrifices that you need to make in your life in order to kind of commit yourself to this.

and I think it has a lot of true gems of wisdom, that for any kind of young entrepreneur in any, any field at all, I think can be very impactful.

Paul Shapiro: it. It's funny you talk about that as like, you know, cuz these days like, quote unquote work-life balances, you know, often talked about as a very important thing.

And, you know, my own experience both running a startup and in talking to other founders is that if you really want a chance of success, it's, it's very hard to say that you want work-life balance. that that's something that, you know, people talk about, but in reality is a very difficult thing to achieve.

Has that been your experie?

Josh March: You know, it depends. there are times I find everything goes in cycles as a founder and you know, there are times when. It's just full [00:50:00] on, you know, fundraising is often one of those times where it's just nonstop. It's intense. You are working late every evening, you know, staying on top, on, on all on emails and working at the weekends.

And, that's just how it is. And if you wanna be successful, you, you've just gotta put the, the grind and the hours in. there can be moments when sometimes things are a little more relaxed and you've got a great team and everyone's just executing and your kind of heads. And, you know, you can find some more time for other things and you can, you know, I've learned to enjoy those moments cause I know that, you know, at some point it's gonna be full on again.

And, you just have to find, find, you know, the things that make you happy and that keep you going around. Around the needs of, of the startup. and it varies, but, yeah, I, I also think that, yeah, startups are super hard and you have to work incredibly hard. I, I do think that some founders, Don't recognize the moments when they can step off a little bit.

You know, especially some first time founders, you know, that it could be, there's moments of intensity where you have to be [00:51:00] putting in the hours all the time. And then there are some times where you don't, and I know some people have kind of burnt themselves out by thinking that they need to be killing themselves every day, regardless of whether it's really essential.

So you just have to, you have to have a, yeah, get a feel for what's needed from the company. .

Paul Shapiro: Very good, very good. Well, sage advice for sure. Before we let you go, Josh, one final question. Obviously you're committed to sci-fi foods. I presume you believe you're gonna be running this company for years to come.

So as somebody who has founded many companies, you probably have thoughts about what companies you wish existed that don't exist. So, let me ask you like, are there any things that you hope maybe a listener to this show will start on their own and do something good in the world by creating that company that you're not gonna do yourself?

Josh March: Yeah. You know, I think we've chatted a lot about kind of, you know, how to make the unit economics and the CapEx for cultivated meat work. And the, the reality is that this is a big challenge, not just for cultivated meat, but but also for any kind of precision fermentation. Products, right? There's a lot of products that just are [00:52:00] really gonna struggle cuz they can't quite get the economics to work.

And a lot of that is, is from the CapEx and from the bio technology and you know, there are a couple of companies, startups working on some exciting stuff around thinking about how they can create U kinds of bioreactor and biomanufacturing technology that does reduce the CapEx. We need them and I think we need more.

Right. I really think that's one of the biggest opportunities is if you can really. Invent technologies and hardware that really changes the economics of producing bio manufactured products, then that can have such a huge impact on the world, for all kinds of things from cultivated meat through to fermentation and, and everything else.

and so that's one thing that I'd love to see more startups in.

Paul Shapiro: So basically, B2B players in the alternative protein space.

Josh March: correct. But you know, yeah. More efficient. Biomanufacturing technologies have all kinds of use cases. It doesn't have to be specific to, to cultivate a meat, it can be across the entire industry.

Paul Shapiro: Yeah, good point. Yeah, very good [00:53:00] point. Alright, well with that, Josh, congratulations again on the success that you're having. I am definitely going to take you up on this taste test opportunity. Yeah. I cannot wait. So, thanks in advance for offering that and thanks for all you're doing to try to create a better meat.

Josh March: Of course. Thanks so much, Paul.