Ep. 172 - Turning Waste into Bioplastic Gold with Genecis CEO Luna Yu
SHOW NOTES
It’s rare that we contemplate where all the plastic we throw out goes, but rest assured that nearly none of it is being recycled. Simply put, it’s usually cheaper to make new plastic than to recycle old plastic, even the plastic you put in the recycling bin. Because it takes plastic centuries to break down, this means for each one of us you could build a mountain of plastic from all the packaging we use over the course of our lives.
But what if plastic didn’t have to take centuries to break down, and could actually biodegrade in a matter of days or weeks?
That’s exactly the vision Luna Yu is bringing to life as founder and CEO of Genecis Bioindustries, a biotech company using fermentation to transform food waste into high-performance, truly compostable bioplastics. In this episode, Luna joins us—at 1 a.m. her time from a manufacturing run in China—to share the story behind Genecis, from her early days as a teenage entrepreneur in Canada to raising $17 million for her startup in the climate tech world.
Luna walks us through how Genecis engineers microbes to turn low-cost industrial waste streams like glycerol into PHA, a biodegradable plastic alternative that’s already being used in consumer products like Mad Tea and Mad Coffee. We discuss why Genecis is taking a direct-to-consumer approach, how they’re preparing to launch in Sprouts nationwide, and what it will take to make sustainable plastics cost-competitive with petroleum-based ones.
We also dive into Luna’s big bets on the future—including cell-free biology, the promise of enzyme-only production systems, and her vision for a world where the most convenient option is also the most sustainable.
If you’re curious about the intersection of synthetic biology, circular economy, and product design—or you just want to hear from someone reshaping the future of plastic—this episode is for you.
DISCUSSED IN THIS EPISODE
You can learn more about Genecis' technology by reading their patents and patent applications here.
Luna is very inspired by Isomorphic Labs.
Genecis is backed by Amazon and is a graduate of the Y Combinator accelerator.
CJ Biomaterials manufactures PHA via fermentation.
Plastic has only been around since the 1950s but we believe it lasts for centuries. How do we know? Researchers simulate environmental exposure in labs by increasing UV radiation, temperature, moisture, and mechanical stress to accelerate plastic breakdown. They analyze how the polymer chains degrade and extrapolate those results to estimate natural-world decay timelines.
MORE ABOUT LUNA YU
Luna Yu is the CEO of Genecis Bioindustries. She completed her Bachelors and Masters in Environmental Science at the age of 21 at the University of Toronto. During her Undergrad, Luna co-founded, grew and exited from two profitable software startups. The exciting advancements in fields of synthetic biology, bioinformatics, and machine learning led her to infuse her passion and experience together. This created Genecis, where biotechnology enables the conversion of food waste into high value materials.
TRANSCRIPT
Paul Shapiro: Welcome friend, to episode 172 of the Business for Good podcast. I wanna say thanks so much to everyone who writes in or posts feedback on social media about our show. I take all the feedback very seriously, both the positive and the constructive criticism, and sometimes those come together. For example, H Rourke Post on X recently.
Quote, I love your podcast. I've listened to almost every episode. One small improvement area though is audio volume balance between you two soft and your guests too loud. You need to post-process them to be more equal. So definitely an issue about which I was not aware until this comment and I'll try to be more cognizant of it in the future.
So thank you and please feel free to let me know anytime that you think there is any way, whether technical or substantive, that you think the show could improve. Also, if you listen to Spotify, you can now comment on each episode on Spotify with your thoughts as well. You can also write in via our website Anytime, which is Business for good podcast.com.
So get in touch and tell me why you listen and what you wanna hear more of on the show in the future. Now, if you've been listening to Business for Good for some time, you already know that I have a soft spot in my heart for the F word that is fermentation, of course. And this episode is further evidence of my belief that we are going to live in a fermentation fueled future.
It is rare. That we contemplate where all the plastic we throw out goes, but rest assured that nearly none of it is being recycled. Simply put, it's usually cheaper to make new plastic than to recycle old plastic. Even the plastic you put in your recycling bin, which almost invariably does not get recycled anyway, because it takes plastic centuries to break down.
This means that for each one of us, you could build a mountain of plastic from all the packaging we use over the course of our lives. But what if. Plastic didn't have to take centuries to break down, and it could actually biodegrade in a matter of weeks or even days. That's exactly the vision. Luna Yu is bringing to wife as a founder and CEO of Genesis, bio Industries, a biotech company using fermentation to transform food waste into high performance, truly compostable bioplastics.
In this episode, Luna joins us at 1:00 AM her time from a manufacturing run in China to share the story behind Genesis. From her early days as a teenage entrepreneur in Canada to raising $17 million for her startup in the climate tech world today, Luna walks us through how Genesis engineers microbes to turn low cost industrial waste streams like glycerol into PHAA biodegradable plastic alternative that's being used in consumer products like Mad Tea and Mad Coffee now.
We discuss why Genesis is taking a direct to consumer approach, how they're preparing to launch in Sprouts nationwide, and what it'll take to make sustainable plastics cost competitive with petroleum based ones. We also dive into Luna's big bets on the future, including cell-free biology, the promise of enzyme only production systems, and her vision for a world where the most convenient option is also the most sustainable.
If you're curious about the intersection of synthetic biology, circular economy, and product design, or you just want to hear from someone reshaping the future of plastic. This is the episode for you.
Luna, welcome to the Business for Good podcast.
Luna Yu: Hi Paul. Thank you so much for having us here today.
Paul Shapiro: I am delighted to be speaking with you, although I'm sorry to learn just a moment ago that you're actually doing this from Shanghai, China, where your time it is 1:00 AM and I feel terrible that we are recording this in the middle of your night.
But you reassured me that this is the life that you have chosen to be all over the world doing stuff. So first, thanks for talking in the middle of the night. Second, what's going on in Shanghai? Why are you there?
Luna Yu: Oh, no it's really a pleasure to be here today. And we're just living the life and doing manufacturing runs.
So we're manufacturing Matt Tea as well as Mad Coffee, which are both made out of our compostable plastics.
Paul Shapiro: Okay, very cool. By manufacturing, we'll get into that. That means that you're running large scale fermentors or sometimes known as bioreactors. Why do this in China? Why not do it in the US or somewhere else?
Luna Yu: Yeah, good question. So we're essentially doing a lot of the outsource manufacturing in China because of the speed and the cost associated with it. And also that we can assemble all of our materials here and then ship it over to the US in a pretty timely manner.
Paul Shapiro: Okay, so will the trade war be harmful for you if there's gonna be a large tariff on incoming products into the US from China?
Luna Yu: Fortunately, no, because we got really great sourcing of raw materials as well as supply chain. So we're able to provide our customers with some really great prices and with really quality materials.
Paul Shapiro: So what you're saying is that it's so cheap for you to do it, that even with the tariff, it actually is still more economic to do it in China.
Is that what I'm understanding?
Luna Yu: Yes. And a lot of it has to do with our technology, both for the packaging as well as for some of the Lyle extract that we're using for mad coffee and the teas that we're sourcing.
Paul Shapiro: Okay. That is all that is all quite riveting and I'm eager to hear more, but I don't wanna put the cart before the horse here, Luna.
I want to hear more about. Why you started this, right? So you started this company, I think what, like seven or eight years ago, right? So why Correct? What's the tell tell me the genesis, pun intended, of how this all happened For you. You, this isn't your first startup. You had done some others before and then you thought, I wanna make plastic.
Why?
Luna Yu: Yeah, absolutely. So we were really just inspired by trying to solve the plastic pollution problem and using biotechnology to do and I came across technologies to do this during my master's program at the University of Toronto. And we were researching microbes that can essentially convert various different waste carbon sources into biodegradable plastics.
And specifically the type of plastic that we made is called PHA or poly hydroxy adenoids. Which is really just a fancy word for bacteria fat because that's what PHAs are. And the beauty about PHAs is that because it's super, or it's just organic and it's the fat of bacteria when it gets. Thrown into nature, it gets eaten up by small animals as well as bacteria in nature using used as a food energy source.
So essentially it leaves no choice sorry, leaves, no choice. And it's also biocompatible with the human body. So we wanted to figure out a way that we can basically scale this technology and put it into products that people can use in their everyday lives.
Paul Shapiro: Okay, so that's quite riveting. I'm so eager to get into the science of how you're making microbial fats here.
That's definitely highly interesting. But why did you care about the plastic problem in the first place? You're, most of the people I would imagine who were in the master's program in Toronto with you were not thinking about plastic. What happened for you that you thought, actually, I'd like to devote some portion of my life to trying to make better plastic?
Luna Yu: Yeah, I think I really just stumbled upon this at first, but originally I was just really inspired by solving environmental problems. Went to school for environmental science, and also reducing carbon emissions, and found that by producing PHAs using waste carbons, you can basically do both.
Also huge fan of Elon Musk and was reading up a lot about Tesla and his journey during that time, and wanted to do something that was very similar, where I guess in the food space, especially these plastic packagings can be applied and essentially reduce the guilt as well as the burden on people's minds and the planet's capacity.
Paul Shapiro: Okay. So the plastics that we produce today via fossil fuels do not degrade. Like all the plastic that we have made in the last nearly, I dunno, how long have we been making plastic? Probably nearly a century. Perhaps maybe a little bit less than that. But they're all still, they've either been incinerated or they're all still here.
They just break down. They don't actually biodegrade, but PHAs are different. It's not like you're, it's not like there are fossil fuel produced PHAs, and you are finding a better way to produce something that fossil fuels make. You're creating something that fossil fuels can't do on their own.
Is that right?
Luna Yu: That's exactly it. It takes usually a couple hundred to up to a thousand years for fossil fuel based plastics that degrade. And for PHAs it takes less than a year in nature, in soil, and as well as marine environments. And there's only a couple of weeks in composting facilities.
Paul Shapiro: Interesting. How do we know that it takes hundreds or even a thousand years if plastic has existed for less than a century? How do we know how long it takes to degrade?
Luna Yu: Oh, there's a lot of scientific studies based on that.
Paul Shapiro: Okay, so they're basically doing an accelerated process to forecast what would happen or is this if they say it won't come post for a thousand years, but it's only existed for 70 or so years, how do they, like what, do you know what these scientists are doing to make those predictions?
Luna Yu: That's a really good question. I never looked into the exact science of it, but I would imagine as accelerated processes where really what all plastics are just long chains of carbon. So eventually they will get broken down by weather, humidity, microbes. It just likely they simulated that in the laboratory environment to see how long it takes, with heightened versions of everything.
Paul Shapiro: Okay. Alright. Yeah, interesting. I will look into that. I'll include a note in the show notes for this episode at Business for Good podcast.com. Because while not directly related to what you're doing at Genesis, it is still of tangential interest to, at least to me for sure.
So maybe just some others too. But what got you, Luna, the startup bug in the first place. As I mentioned, this isn't their first time that you've started a company. Most people will never start one company, let alone multiple. So was there was it. Elon Musk's inspiration to you? Was it something else?
Like what gave you the confidence to say, oh, I'm gonna go start my own company here?
Luna Yu: I think it really all started in grade, back in grade nine during Take your kid to Workday with my mom. Okay. Yeah. She basically, yeah.
Paul Shapiro: By grade nine. You are now living in Canada. You were born and raised for the first several years of your life in China.
You moved to Canada. So now you're in Canada. Take your kid to school day or take your kid to workday. Is that what you said? Take or take your mom to Workday. Exactly. Okay. Alright. Alright. Got it. Exactly.
Luna Yu: Okay, so
Paul Shapiro: you're in, so you're in Canada and what happens?
Luna Yu: And then I she had an office job and I just thought I was sitting there for the entire day and I just thought, this can't be it.
And I thought I was gonna be bored out of my mind if I did this for the rest of my life. During university, I wanted to see what else I can do to. Basically break out of that. Did a lot of sales jobs in the, at first, learned how to do door-to-door sales with bell Canada and First Data. Had a lot of fun, really talking to people, learning how to basically find the right fit for a product with the right customers and really making a difference in their lives.
And then after that was able to really I guess start a couple of smaller, web-based companies. We were developing custom apps and web webs for various different clients and thought that was really interesting. But I wasn't really interested in coding, so thought I wouldn't really be able to make a difference there.
And then, I always really liked science and that's what I went to school for. And by the time that I went to my master's program, got into biotech and found PhDs and yeah, here we are today.
Paul Shapiro: Yeah, it's amazing how small things in your life transform what you might ultimately end up doing.
I remember for example one time about a decade ago or so, I was running with a friend of mine. We were running through the woods and we were talking about what we thought were the most important things in the world because I wanted to write a book on what I thought would be the most important thing in the world.
And he gave me this idea that was. Just offhanded I, an idea to write a book about cultivated meat and or what was then called queen meat or even lab grown meat. And I never thought about doing a book on this topic before, but he just made this offhanded comment to me and it really stuck with me and that conversation trans.
Transformed the trajectory of my life, actually, just that one conversation which sounds maybe not too dissimilar to hearing about your story with your mom there. Wow. But yeah, I know. He is aware of this. I've told him about this by the way that he, that the impact that he had on me, now with regard to your earlier startups, Luna, you're doing these software companies where you're basically trying to rearrange zeros and ones. Now you're actually trying to rearrange atoms and you're using biology and bioreactors. It's very different, right? Like when you're dealing with atoms and trying to get something, like the scalability of it is very different.
Have you found this much harder than what you were doing before?
Luna Yu: Oh, 100%. I think I really went in there with, without knowing how hard it was going to be, and especially scaling biology. I think chemistry is actually easier because it's more chemical reactions and those take a lot quicker time in very controlled environments, whereas dealing with microbes is a lot more uncertainty and really basically engineering DNA to control how the bacteria may behave.
There's a lot of nuances that goes into there and nevermind scaling. I think we've learned a lot of lessons throughout the years in terms of how to do this, the most efficient, in the most efficient manner.
Paul Shapiro: Yeah. Yeah, for sure. So you touched on an important issue that I want to bring up.
You're talking about engineering these microbes, right? So my presumption is, by that you mean you're bioengineering them. These are genetically engineered microbes that you and your team have created to invent. Essentially bacteria that will produce a lot more acid. Is that accurate or a lot more fat?
What is it that you want these microbes to turn into?
Luna Yu: A bit of both actually. And we don't really engineer them from scratch. It's more changing their existing DNA to make it a more efficient, for example, at accumulating PHA so that let's. Say each bacteria cell can accumulate 20% PHA as their energy storage unit in the form of PHAs, right?
We're trying to make it so that it's up to 90% PHA and they're making it very fast so we can get higher efficiencies.
Paul Shapiro: Interesting. I learned from reading some of your patents the term I learned acid, genic bacteria, which is basically bacteria that produce acid.
So why do you want them tell me about that. Is this first, is this an aerobic or an anaerobic fermentation that you're running?
Luna Yu: Yeah, good question. The cytogenic bacteria we actually use in the first stage fermentation, dealing with waste materials to essentially create as much small chained acids as possible from various different waste feed stocks.
And then, in the second stage, ferment fermentation, we feed those small chain acids as food to PHA bacteria to then grow the PHAs.
Paul Shapiro: Interesting. Okay. You hit Luna on what may be perhaps the most important part of the innovation that you are pursuing here. When you talk about waste stocks. So there are many other companies that, are I about?
Many, but there are other companies that are making PHS through fermentation. CJ Biomaterials has a big facility doing this. But they just feed sugar. They take sugar, they put it in, and that's the feedstock for their bacteria. You though are using waste streams, agricultural waste streams, I presume, but what is the waste and how are you able to do this?
Like why are you able to make. Waste streams work when a massive company like CJ buy materials isn't doing that?
Luna Yu: Yeah. Great question. So we mostly, right now, in terms of our scaling, just to make it as efficient as possible, we're using waste glycerol and that comes from a lot of different large chemical plants and sugar plants, et cetera.
And that's a really great concentrated carbon source. And we essentially do that. Two stage fermentation process where we essentially convert that into small chain acids and then feed that into PHA bacteria. It did take us quite a while to essentially engineer the microbial pathways to do so I assume that it was more so just time put into it. And eventually we hope that one day a lot more companies will be doing the same things too, so we can make interesting, a lot more proliferate per proliferated, and also reduce the cost of which to scale.
Paul Shapiro: How much cheaper is the glycerol that you're using?
How much cheaper is that than if you were just to go buy glucose on the market?
Luna Yu: Yeah, about if you account for the entire process about like 30%.
Paul Shapiro: Yeah. Okay. And I presume that the feed stock is the largest driver of your cogs, is that right? Yes. One of the largest drivers. Okay, so a 30% reduction in your feedstock cost is pretty massive.
That's like a truly transformational technology. And what you're saying is that the way that you've accomplished that is through engineering the microbe to basically make better use of glycerol, whereas in nature, this bacteria would not really do that. That's right. Exactly. Yeah. All right.
Wow, how interesting. Okay. Where does glycerol come from? What your, it's a waste byproduct from what industry?
Luna Yu: A lot of chemical industries, a lot of biomass industries yeah. Sugar industries, et cetera.
Paul Shapiro: Okay. Interesting. Alright, so you mentioned that your PHAs can biodegrade in a very short amount of time compared to plastics, which degrade for maybe centuries or millennia.
We don't, we will find out after the show. But. How, first of all, how long does it take to degrade and why won't it degrade while being used? If it degrades so easily, why isn't it gonna degrade before the end of its useful life?
Luna Yu: That's an excellent question. So I think the interesting thing about p HHAs is that it's not only a thermoplastic, meaning that it can be thermally formed by applying heat and obtains its shape, and it could be made into both thin film as well as rigid plastics, but also that because it's the fat of bacteria and it's.
Not unlike unlike other types of bioplastics affected by humidity and temperature as much that when you throw it into nature, the only way that it really degrades is with organics matters bacteria eating it up, right? That's how it basically degrades. If you just leave it on your desk where there's very little amounts of bacteria, it can stay the same shape for the next 10, 20 years.
Paul Shapiro: Ah, okay. So basically you're saying that because we live in relatively sterile environments, that's why it won't degrade. Exactly. But if I were to put it in my backyard for example, it would speed that process up. Exactly. Alright, so you mentioned earlier, Luna, your mad tea and your mad coffee. For people who don't know what those products are, what is your intent here?
What are you actually making PHAs to be used for and what types of plastics are they replacing in the market?
Luna Yu: So since last year, we really wanted to build our own brands of products because fundamentally speaking, PHAs are just a packaging, right? They're not a product on its own. And we wanted to make PHAs into products that are both.
Convenient and sustainable for people to use. So the very first product that we wanted to make was essentially Matt Tea. And what Matt Tea is Nespresso or Nespresso original compatible teapots that are compostable with our PHA as the outer shells. And we made them into various different flavors like matcha, chai, camo, lavender.
Thai milk, tea, et cetera, so that it fits into the existing Nespresso original machines. And now you can make really great teas in addition to coffees that you get from Nespresso. So that was the very first product that we made into or packaged in PHAs. And the second one is Mad Coffee, which we're just about to launch now.
And, mad coffee no longer requires a machine, and we essentially use the next generation freeze drying technology which we're also calling Lyle, extract ourselves to essentially freeze dry the various coffee extracts and the coffee brewed coffee to the perfect temperature freeze it down to negative 45 degrees Celsius, and then through a vacuum environment.
Sublimate the water over the course of 30 hours to make this crystallized coffee powder that dissolves instantaneously in ice water and ice milk. So you can enjoy a really great cup of ice coffee very fast. And they're all packaged in our PHA cups so that it's super convenient and you can take it on the go.
Paul Shapiro: So your goal here is not just to create an alternative to fossil fuel based plastic that you'll sell as a B2B ingredient, you're actually seeking to create a CPG brand that people would choose as opposed to something else. Is that right?
Luna Yu: That's exactly it.
Paul Shapiro: How interesting. Okay. Are other examples of other like plastic brands out there?
I can't think of one, but are there other, are there other plastics that have formed a brand like this?
Luna Yu: I think there's a couple that are based around PLA, but they're mostly like, PLA straws or cutlery. Not so much on what we're doing, where we're creating additional products that goes inside the packaging that we're making.
Paul Shapiro: I see. So it's not just Intel inside, it's also the computer.
Luna Yu: Exactly. Yeah.
Paul Shapiro: Yeah. Okay. Why mad? Is it, I presume it's not mad as in angry. It's mad as in this is mad Cool. Is that an accurate assessment?
Luna Yu: Yes. Oh, yes and no, actually. So in the beginning we thought mad because we were really just mad about the plastic pollution problem and that the world wasn't adopting better solutions fast enough.
So we wanted to essentially make our own brands and help accelerate that process. The other thing is that mad because we're all mad scientists trying to apply the latest technologies and whatever products we're making. And then thirdly is that just like you said, it's mad cool. We wanted to create a d experience for people that they would've otherwise not had if it weren't for our products.
Paul Shapiro: Interesting. And I see e even though some of your even some of the flavors of mad tea are called Thai milk and brown sugar milk, they're actually all vegan. So what are you using as a dairy replacer?
Luna Yu: So there is no milk in there. It's more so that it comes out of the espresso machine in a concentrated form, and then you can add any milk to it that you wish, like oat milk, anything.
Paul Shapiro: Ah, got it. Okay. Interesting. All right. I don't have an espresso machine, but I would like to try this and I see that you can go and purchase Mad Coffee and Mad Tea, right? You can go buy these online.
Luna Yu: Correct. Yes, Mattie, we've been around for the last six months or so, and in Matt Coffee, we're just to beta launching the website and we'll be updating our website next week or so.
Paul Shapiro: Okay. We will include a link to those opportunities to purchase these products of the show notes for this episode on business for good podcast.com. And this episode will be airing in mid-August, of 2025. And so it should already all be available on there, so we'll make sure that people can go check those out.
I know. I would like to try it for sure. It sounds pretty. Awesome. Are you also planning a B2B business here or is it all CPG? Would you like to sell your p your PHA to food companies so they can displace plastic with it?
Luna Yu: Absolutely.
So hopefully people can also check us out in terms of Matt Coffee. And on the shelves of sprouts farmer's markets going forward and in terms of the long term for us, we absolutely would love to go back to the B2B side of things once we can really prove to the world that we can make great products that are both sustainable and convenient with our mad brand.
Paul Shapiro: Awesome. Can you compete on cost with plastic? I presume that there is a green premium here, not a green discount. Correct me if I'm wrong, but go on. I'm sorry. Please.
Luna Yu: You're absolutely correct. No, you're absolutely correct. PHAs r and d today, still more expensive than the irregular the regular petroleum plastic, but that's why we also chose to create our own products where we can really figure out ways to reduce on the price.
Of the overall product itself, so we can make up for the additional cost of the plastics. And it becomes very minuscule when you when it becomes a full fledged product versus just a raw material.
Paul Shapiro: Interesting. So even a giant like CJ Biomaterials, you're saying their phs are more expensive than plastics and that those who would want to use them are using them because they have some commitment to environmental sustainability, not because it saves them money.
Luna Yu: Absolutely. I'd say that it's really a long road to get PHAs as cheap as petroleum plastics. And we just would love to be able to be a part of that process and accelerate that timeline.
Paul Shapiro: I presume you think it's possible though, right? If this had been 20 years ago, we would've been saying it's a very long road for solar and wind to compete on cost with oil and coal.
But obviously they're doing that now. Do you think the same is So here, is there a pathway for PHAs to eventually undercut petroleum in the market?
Luna Yu: Absolutely though I will say that I think new technologies would have to be invented in order for that to really hit one day. It's almost, similar to electric vehicles in order to, for it to be really cheaper than petroleum cars, there will have to be more technologies invented to that allows that to happen.
But we can come pretty close in the next decade or so.
Paul Shapiro: Yeah I definitely think there are so many industries for which. That is a true statement that new technologies have to be invented in order for them to actually make it into mainstream market. Meaning they can compete on price, not just on sustainability.
But I'm pretty bullish on new technology being invented because humans are. Good at a lot of things, but one of them is inventing new technologies if the right incentives are there. So what's the one thing that you wish would be invented then, if you're thinking about how to bring down the cost of your PHA production, you're already using this 30% cheaper glycerol, which is driving down your cogs, but is there something else?
Is it a different type of bioreactor or a different type of microbe or what would actually get you to where you want to go to compete on cost?
Luna Yu: Great question. We really do believe in cell-free biology going forward. So really removing the need for it to grow an entire cell and just really essentially honing in on the enzymes that creates the PHAs alone so that we can come as close as possible to a chemical reaction for PHAs.
Yeah,
Paul Shapiro: So instead of using a biological fermentation process, you would just use a chemical enzymatic process in order to do that, and that would be cheaper for you.
Luna Yu: Yes. In general. Yeah, he can definitely understand it that way. Basically, yeah, the name of the game is to reduce the time and the resources needed to go from one source to another source.
Paul Shapiro: Got it. Interesting. Okay, so where do you see the biggest opportunities? Is it in food packaging, like with Mad Tea and Mad coffee? Is it medical? Is it textiles? Something else? Like where did you see the biggest opportunity for your PHAs to make a difference in the world?
Luna Yu: For now, we're really focused on food and supplements because we think that it's a great place for disposable plastics to make it into mainstream products.
And then in the future, definitely medical industry is a great one because PHAs are also biocompatible. It's just that the FDA process six longer time and we're hoping to get some more essentially revenue streams before we go on to the applying the medical space. Yeah.
Paul Shapiro: Is there a pathway to making them edible?
So rather than just disposable, but actually making them, if they're biocompatible, can you eat them?
Luna Yu: That's a really interesting question. We have explored that, but like unlikely though because it does take a while for the human body to absorb PHAs through the digestive system. So unlikely.
Paul Shapiro: Yeah.
Okay. Would it be dangerous for somebody to eat it? Even if it takes a while to to digest it, would it be dangerous?
Luna Yu: So if it's only in a small amount, no, because it's just literally an inert organic matter. If you ingest a huge chunk of it, it's probably just gonna end up blocking our digestive system.
Paul Shapiro: Okay. Alright. So it's more of an obstruction problem, but not a but yeah. Okay. Got it. Interesting. Okay, Luna, you've had quite a storied time. You've raised tens of millions of dollars, you've won big grants, you've partnered with Amazon, you went through the very prestigious Y Combinator. A lot of good things have happened but I presume like with most startups, that there are a lot of troughs not just peaks.
And so often we read about startups, we read about all their great achievements. Then we hear about them failing. But we rarely hear about the actual obstacles that they're facing along the way. So what have been some of the obstacles for you as you have been going through this process of technological invention and scaling?
Luna Yu: For sure. We've definitely faced a huge amount. I think the very first one is just recognizing that to get to scale and like massive productions of PHAs, that takes a lot of money and a lot of time. And the way to essentially accelerate that had to be leveraging existing facilities where we can essentially outsource the manufacturing of the phs.
On its own and also create products as quickly as we can and get into the hands of customers so we can be self-reliant and generating our own revenues. I think that's probably been the biggest lesson and where we have spent the most amount of time ourselves thinking about how to solve this problem.
Paul Shapiro: I see. If the company succeeds, let's just say de define success as becoming profitable and maybe even having an exit in the form of an IPO or an acquisition, what will have happened? What will have gone right for the company?
Luna Yu: I think we would've definitely had to be able to figure out great product market fits with the products that we're making, both Matt Tea and Mad Coffee, and anything beyond where it really justifies a value proposition for the end consumers.
With the, with both the raw materials that we're using as well as the price point of PHAs and also being able to really bring down that price point so it makes sense for them. I think that's where we're spending the most of our time. And with Mad Coffee, we've introduced what we call the Mad Cups as the version one, which is really great premium coffee that you can buy without a machine for roughly a dollar 80 cents per pod.
But we're already working on the second version of that where we're essentially making these stick packs with our compostable materials that can also biodegrade in nature, but are also a lot more cheaper for the end consumers, so that we hope we can reach more consumers with a lower price point product.
That's really great in quality still.
Paul Shapiro: And how long do you think that'll take? Let's say it all goes right for you, you don't have any major hiccups. How long before you can reach a point of profitability?
Luna Yu: Likely in the next one or two years if the products really land with consumers.
And ultimately we have to ensure that we can make products that people want. And that's what we're really just very focused on doing. Yeah.
Paul Shapiro: Okay. Yeah, of course. I'm sure you're focused like a laser on that. What about the inverse Luna? If the company doesn't succeed, what will be the reason for it?
Just because the lack of PMF or of product market fit, or it will be, you think there's some other pitfall that is a serious danger for you?
Luna Yu: I do think so. And if anything, it really just boils down to like our own thinking. I think if it does fail it's really just a big lesson for ourselves in terms of what we could have done better and what we didn't do very good on in terms of decision making.
So I think it all just boils down to our own mindset and how we think about solving these problems.
Paul Shapiro: So if it does succeed if you, if everything goes your way, the company succeeds wildly beyond your wildest imaginations right now. What does a world with widespread PHA adoption look like? Let's say 10 years later?
How is it different from the world of today?
Luna Yu: I think really for us it's just that we know that we can't change the way that people behave and we shouldn't. And ultimately, everyone's gonna want to have the most convenient way of consuming a product in the cheapest price prop possible, right? So that's really what success looks like for us, being able to make products that has the biggest bang for your buck and the biggest value proposition for consumers.
Are also sustainable and they don't have to worry about it. And essentially we can create a world where materials can take care of themselves and you don't have to worry about how to sort it or where it goes.
Paul Shapiro: Because it'll be biodegradable. You say we won't have to sort it 'cause we won't be recycling it at all.
Exactly. Okay. Alright. That sounds like a pretty good world. I hope that your fantasy comes to fruition here. Luna, let me ask you, there have been so many things that have happened for you from your first startups to now doing Genesis for many years and having a lot of success to the point where you're now manufacturing in another country, planning to import it back into the United States.
What resources have been useful for you? Have there been anything that's been beneficial for you that you would recommend to others if they're interested in starting their own company?
Luna Yu: I think the biggest useful resource for us is really just talking to people who are in the industry, who's done it before, and who are able to just really help us along the way, both in the synthetic biology industry as well as the CPG industry and now the D two C industry.
We've had a huge amount of help from people who've really had a lot of success in the past who were able to help us through a lot of the problems that we were working there.
Paul Shapiro: Yes for sure I've, I have thought about this so much that there is really there's no substitute for actually being on the field and playing, but the closest that might be to that is talking to people who have been on the field playing as well.
Like I always think about there are all these business books out there and it's not like I'm against them. Some of them have actually found quite useful, but I've often found that talking to other people who have already. Done something similar is usually a much better guide than reading about things in books.
Exactly, yeah. Okay. As somebody who has started a few startups on your own, now obviously you hope to be participating with Genesis for many years to come, but you probably have ideas for other companies that you wish existed or you wish there were more companies doing something. What's one thing that you wish that somebody was out there doing right now that you don't see enough of?
Luna Yu: Honestly not so much because we've been very much laser focused on how to grow Genesis and how to essentially pivot it into a company that makes products that people want. Along the same lines of synthetic biology, I guess one company that we really look up to, and I really do hope that can make some breakthrough innovations very soon as isomorphic labs.
I think they're doing some really cool things on the genetic engineering. Side of things with AI and if there is one company that can probably have create the next generation of cell-free biology, it likely would be them.
Paul Shapiro: Okay, that sounds interesting. Cell-free biology sounds definitely intriguing to me.
And we'll link to Isomorphic Labs in the show notes for this episode at Business for good podcast.com. But let me leave it at that, Luna. I'm impressed by all that you've achieved so far and I really hope that I get my own mad tea very soon. I'll be ordering that for sure, and I hope that you succeed.
In manufacturing your product at larger scale, wherever you do it in China and elsewhere, and can create a world where the cheaper option is, the more sustainable option, which is the inverse of what we have in this situation right now. So thanks for all you're doing and I'll be rooting for your success.
Luna Yu: Amazing. Thank you so much again, Paul. Really appreciate it.