Ep. 182 - A Better Way to Build: Modern Mill Is Using Rice Hulls Instead of Rainforest Trees
Show Notes
A Better Way to Build: Modern Mill Is Using Rice Hulls Instead of Rainforest Trees
Most of us look at a field of rice and see…rice. But some people see something very different. Instead, they see the future of building materials and a pathway to fight deforestation, all wrapped inside one of agriculture’s most overlooked waste streams: the humble rice hull of which billions of pounds are burned or landfilled annually.
On this episode we talk with Chris Guimond, Founder & CEO of Modern Mill, the Mississippi-based company behind ACRE, a wood-like building material made by upcycling discarded rice hulls into high-performance siding, decking, and trim. If that sounds impossible, Chris is here to explain exactly how and why Modern Mill “cracked the code” on turning a fluffy, agricultural byproduct into a scalable alternative to old-growth wood.
In our conversation, Chris shares how Modern Mill built a state-of-the-art manufacturing facility in rural Mississippi, why the company has already surpassed $20 million in annual revenue, and how they’ve raised more than $86 million from investors to scale a physical, hard-tech startup in a world dominated by software. We also talk supply chains, the economics of upcycling, how to beat billion-dollar incumbents, and what it takes to build a company that moves atoms rather than just bytes.
If you care about climate solutions, circular economy breakthroughs, rural revitalization, or simply love hearing how entrepreneurs turn unlikely ideas into category-defining companies, you’re going to love this episode.
Discussed in this episode
Where to find ACRE products near you
Explore the different profiles of ACRE made by Modern Mill here
If you’re interested in what filamentous fungi can do with waste, they’re also great at wastewater treatment, as discussed here, here, here, and elsewhere.
Chris suggests that building a team is the most critical part of startup success.
Get to Know Chris Guimond
As Founder and CEO, Chris brings visionary leadership and boundless energy to Modern Mill. Under his guidance, the company has evolved from a concept into a national leader in building materials manufacturing. With a bachelor’s and master’s degree in plastics engineering, Chris’ deep technical expertise drives our success. Prior to Modern Mill, he co-founded, built and sold a global raw materials company that achieved over $1 billion in revenue through integrated trading and distribution operations.
TRANSCRIPT
Greetings, friend, and welcome to episode 182 of the Business for Good Podcast. Most of us look at a field of rice and we see well rice. But my guest on this episode today sees something very different. He sees the future of building materials and a pathway to fighting deforestation, all wrapped inside of one of agriculture's most overlooked waste streams.
The humble rice hole of which billions of pounds are burned or landfilled annually. On this episode, I sit down with Chris Guimont. Founder and CEO of Modern Mill, the Mississippi based company behind Acre, a wood-like building material made by upcycling, discarded rice holes into high performance siding, decking, and trim.
If that sounds impossible, Chris is here to explain exactly how and why modern mill cracked the code on turning a fluffy agricultural byproduct into a scalable alternative to old growth wood. In our conversation, Chris shares how modern mill. Built a state-of-the-art manufacturing facility in rural Mississippi.
Why the company has already surpassed $20 million in annual revenue and how they have raised more than $86 million from investors to scale a physical hard tech startup in a world dominated by software. We also talk about supply chains, the economics of upcycling, how to beat billion dollar incumbents, and what it takes to build a company that moves atoms.
Rather than just bites. If you care about climate solutions, circular economy breakthroughs, rural revitalization, or simply love hearing how entrepreneurs turn unlike ideas into category defining companies, you're going to love this conversation.
00:01.66
Paul Shapiro
Chris, welcome to the Business for Good podcast.
00:04.31
Chris
Happy to be here, Paul. Thank you.
00:05.91
Paul Shapiro
Hey, I'm really glad to be talking with you. um You know, there's a lot of people who would look at a field of rice and they would never think to themselves, I want to build my house out of that.
00:17.85
Paul Shapiro
It seems almost like, you know, we're taught like when we're kids, we listen to like the big bad wolf and, you know, they try to, you know, build the house out of straw and it's not such a good idea. But somebody thought,
00:29.14
Paul Shapiro
Building a house out of straw, a rice straw that is, is actually a good idea. Why? Why would somebody think that?
00:35.90
Chris
So yeah, my i mean my background is um really a big part of it's been around, ah first of all, I have ah a bachelor's and master's degree in plastics engineering, so that's how i get into all this stuff. But during those years, especially on the academic side, there was a heavy focus for me around sustainability for sure, recycling of those types of materials that we were working with, but then also finding ways to use throwaway materials, especially throwaway agricultural products. So there's always been a passion for me, in and around that that space. um
01:09.11
Chris
But yeah, i think I think the high level answer is when you see something that delivers a property like what a rice husk does, and and you can take you understand that what that rice husk is doing while the rice is growing, protecting it from moisture, protecting it from pests,
01:24.98
Chris
ah doesn't rot, those types of things. If you can find a way to leverage that into something like a building material, there there became this sort of natural synergy. And, you know, people have been trying to figure out what to do with a lot of these throwaway agricultural products for a long time, be it rice hulls or others. And I think, you know, what we've done is finally crack the code on how to take that material, sort leverage those properties, put it into something that's very usable, um ah you know, addresses a need, and then ultimately is scalable on a manufacturing level.
01:55.06
Paul Shapiro
Interesting. So let's talk about what you just referred to as the need. It addresses a need. What's the need? You know, we we have no problem building houses without rice husks. What's the problem?
02:04.57
Chris
So from the highest level, cutting down old growth trees, right? So if you think about deforestation if you think about the rainforest in you know 25 years from now in 2050 statistic i often quote is we're if we do nothing as a society we could be down to wiping out you know more than half or more of the of the rainforest right so something needs to be done and and it's my view that what that something needs to be done is on the level of supply demand economics meaning if you're
02:35.00
Chris
the the need for cutting down mahogany, ebay, cedar, the redwood, right? Those types of trees exist because people like the look and feel of the the wood. It's stainable, it's paintable. Then if you can find something that is substitute to that, that looks as good around the same price or better, but then also you don't have to maintenance it. That's the need, right? So, so my, my, my elevator,
03:01.24
Chris
pitch is very simple. Don't cut down the old growth tree, upcycle the rice hull, make a product that looks and feels like these types of woods, these old growth woods, that's paintable, stainable, and also that you then don't need to maintenance it in the next two, three, four, or five years. Up to this point, there's been other options besides cutting down trees, right? And that's where this world of composites have come from. But generally, there's been a compromise.
03:26.47
Chris
It's going to look and feel like plastic. It's going to look and feel like cement. It doesn't look and feel like that piece of wood, that mahogany, that ipe, that cedar, that nice piece of wood that people want to to work with, let alone how easy it is to work with. like Carpenters enjoy working with wood.
03:41.72
Chris
Well, they enjoy working with our products. So the need ultimately is you can't keep cutting down. We can't keep cutting down as a society, old growth trees and expect that they're going to regrow within our lifetimes, right? I'm talking 50, 60, 100 year old type trees, softwoods or hardwoods. That's the need.
03:59.06
Paul Shapiro
Okay, very compelling elevator pitch, I have to say. You talked about different species of trees and how they differ from one another, and you're saying your material, Acre, is more similar to them than some of the composites. But if those trees differ from one another, is your material more similar to one? Is it more similar to mahogany or to redwood, or is it just like a more generic wood?
04:24.70
Chris
Love that question. it It all is in the way that you finish it. And and that gets into the workability and ultimately stainability and paintability of our product.
04:34.94
Chris
Now, just through our manufacturing process, um it's it's a four step process, right? So we bring in the rice hulls, we grind them, we mix a compound, then we extrude a board.
04:45.31
Chris
So we have a continuous extrusion process. We're extruding a board anywhere from quarter inch up to one inch thick. Generally it's it's four feet wide and we cut it at whatever length somebody would want. Now we we're in what we call the modern mill, right? The modern take on a sawmill. Don't cut down the tree, upcycle the rice hull, extrude this board.
05:03.16
Chris
And then in the final process of that, so grind the rice, mix the compound extruder board, the fourth step of that is we're now truly in the modern mill. That's where we run our our acre boards, acre because we're saving acres and acres of of of trees and we're upcycling acres and acres of rice husks, right? So we take our acre sheets and we add what we call the acre grain. That acre grain is what allows us to apply a stain or paint or really anybody, right? Because but a good amount of our product, we actually just sell unfinished and people will field finish it. They can take a water-based stain or paint. We generally say, make sure you refer to our coatings guide on our on our website to to understand, you know, what types are approved, but you can apply a stain or paint to that acre grain. And that's what gives that vertical grain look. Now, depending upon which stain you would apply, that would depend on which type of wood you're trying to mimic. So it's really all in about how you finish it. But it's that acre grain is what the real differentiating factor is in our product.
06:02.33
Paul Shapiro
Interesting. Okay. So that is pretty compelling and it actually goes to something that I was wondering, which is about the IP. i was thinking, okay, well, how much IP is there involved in taking rice husks and turning them into this product? But obviously it sounds like quite a substantial amount based on what you said. And and my guess is that it is not purely rice hull. I think you're you're also adding other things to the rice hulls like recycled PVC and other things like that. So is that where the IP lies in the combination and the proportion of rice hulls to your other ingredients? Or is it also in the actual processing steps that you just mentioned?
06:37.11
Chris
Sure. It's ah around formulaic IP, which is essentially what you're saying, taking the rice hulls, mixing with other materials. And and so we call it either the formula or the compound. so So there's IP around that. But also we're we're constantly innovating at Modern Mills. so we've over the years, we've worked on you know, various steps of the process and and we're constantly sort of ah ah ah ah morphing on our IP and adding to it. But yeah, ultimately we would be around the the the compound or the formula and then potentially also around the process. And then really, as we continue to develop various products, there's there's opportunities for IP around that. um i I generally, you know,
07:13.50
Chris
When I think about what have we done that's different than what anybody else has ever done, it's it's cracked the code of how do you take something from something that doesn't you can't really put into a large addressable market because you you can create something in a lab or you can create something that's really difficult to work with. But what we've done is is really expanded this idea into a a a large scale addressable market, right? So our product is such that it can really be, it's it's easily adopted, right? We've created all of the various credentials that we need. and let's talk just specifically on our siding product, right? We've created created the various profiles that that somebody would want. So shiplap is like our main siding profile. So we've gone out and created the credentials around that, right? So we have our fire rating for California, the
08:00.98
Chris
wouy It's called WUI, Wildland Urban Interface. We have the Miami-Dade for screwing nail pull, category four wind load hurricane testing. It passes that. So it's really, it's it's it's about really being able to scale up the manufacturing to create a significant amount of volume, then create a product that is is what the market really needs. And Not only that, making it easy to install, right? So our shiplap, for instance, it's got a flange. You you hit it with some ring shank nails with a nail gun or screws. um You can face fasten it. We have a plug system that that works very simply, but there's there's nothing complicated about how to install it. And that's what allows us to really scale into a volume market like siding.
08:40.50
Paul Shapiro
Interesting. Okay. So Chris, when most people think about um recycling, right? They're thinking like downcycling, right? Like you're taking, you know, let's say something like a new piece of ah glass and turning it into a recycled piece of glass.
08:56.68
Paul Shapiro
You're not really downcycling, though. You're upcycling, right? You're turning farm waste, to these rice hulls that just get burned or landfilled into something of higher value. So what, in your view, is like your secret sauce in making that work economically? You talked about how it needs to perform like wood.
09:13.17
Paul Shapiro
But you also, of course, need it to compete on cost with wood. Sure, there are some people who will want to buy Acre because they don't want to contribute to deforestation, but most people and most builders are going to be you know going on cost.
09:20.89
Chris
Thank you.
09:27.66
Paul Shapiro
So when you're taking this product, which I imagine is either free or extremely low cost to you, and trying to turn it into something valuable, what's the key to economically making that work?
09:40.15
Chris
So the first step of that is geographically where you located, it right? You you want to ultimately be close to where the rice mills are. And the rice mills, because that's where the these rice hulls are generally created through that through an aggregation process. so the So the mills will bring it in from the rice farms and what comes in is rough rice. So that's the the rice grain plus the rice hull goes to the mill. They separate the grain from the hull.
10:04.18
Chris
Ultimately, we, as in in the US, we produce a lot a lot of rice. So Mississippi, Louisiana, Arkansas, Texas, California, those are like your main rice producing states. As a society, we eat a good amount of rice, but we still actually export a fair amount of rice in this country because a lot of other countries might have more demand um for rice than we do. But a good amount, almost all of them, of the the agricultural byproduct ultimately gets left behind. And there's not a ton of uses for that, right? People have been trying to figure out what to do with it for years.
10:34.39
Chris
when we so so So the answer on, you know do we get a favorable price on those rice hulls? Absolutely, because there's there's a good amount of them. You want to be – oh, go ahead, Parker.
10:43.37
Paul Shapiro
Well, sorry to interrupt you, Chris. i that You say you're getting a favorable price. It's the waste product for them. They have to pay to get rid of it. They have to burn it. They've got to put it in a landfill. don't they just give it to you for free?
10:56.79
Chris
um Yeah. so we So we're at this phase, the the majority of the cost is bringing it from the rice mills to our facility. Because if you imagine rice husks are pretty fluffy, so you're you're kind of shipping a lot of air. And that's why you know it's where you locate is probably the the first step of this. I think as we continue to scale, we've certainly have met met with various rice mills that will just give it to us.
11:18.91
Chris
Right now, we have a program where we pay ah ah a small amount in ah you know, the majority, the the bigger cost of that is actually in shipping it, right? So shipping it from the rice mill to modern mill, which is located in Fernwood, Mississippi.
11:31.36
Chris
It's about about an hour outside of New Orleans, hour and half outside of New Orleans, just for geographical point of reference. But that's really where you want to be as close to where the rice is grown and ultimately close to where the rice mills are so that we can bring it from the rice mills to modern mill via truck.
11:46.28
Chris
But yeah, as on on a go forward, if we think about our plant two or plant three, or, you know, we we go to ah a place where you know, theres there's maybe more production and there's more of an issue with them. We could set up a plant potentially next door to a rice mill and all then the freight goes away.
11:59.52
Chris
And then ultimately we could we we could get them completely for free. But I think right now it's a good program that we have.
12:03.13
Paul Shapiro
Yeah.
12:05.56
Chris
The majority of the cost is in the freight, still not a huge line item. And ultimately that's what we're doing is displacing polymer with a throwaway agricultural product, thereby creating a a cost advantage along along with along with property advantage.
12:20.03
Chris
And that's probably the bigger one.
12:22.10
Paul Shapiro
How cool. I actually live near the port of what's called ah West Sacramento, where the rice is exported to Asia. So I see these huge cargo ships taking all the rice from the Sacramento Valley, basically, and bringing it out to Asia.
12:33.62
Chris
Thank you.
12:37.56
Paul Shapiro
And a lot of people are not familiar with the fact that Asia imports a lot of rice from us. Obviously, they consume a lot more rice than we do. And a lot of that comes from here. And so I get to watch that. And it'd be cool to see a modern mill facility located right there. That that would be ah a lot of fun.
12:54.68
Paul Shapiro
You talked about the economics. Is it cost competitive with wood now or is that still aspirational for you? Like, have you already are you already beating wood on price?
13:05.14
Chris
Yeah, so i would say it depends upon the the the timing of the market, right? What's happening with with with the general supply-demand cycles. but But in general, we are cheaper than a lot of the old-growth woods that we're talking about, be it Ipe, mahogany, um cedar, you know, and depending on which type of cedar we're talking about, right?
13:20.31
Paul Shapiro
Mm-hmm.
13:23.19
Chris
But vertical grain, something where somebody's trying to get nice product to use for like a ah vertical shiplap install, generally we're we're significantly cheaper than that. And then i also It's because of the quality of some of these woods that are coming out now. They're not the quality that they used to be. So if you talk to builders, they're going to tell you, you know, a hardwood that they got 30 years ago is very different than that hardwood that they're getting today. if you If you go into your, you know, local big box retail and you go and look in the the cedar aisle, you're generally going to see it's all kind of picked over and what's left is stuff with, you know, cracks or twisted or whatever. So when people get our product, it's a lot easier to work with. Generally, it's cheaper. Again, depending upon what what we're talking about, I would say. but But the majority of the time, we're cheaper than a lot of those old growth products.
14:09.59
Chris
hardwoods and softwoods sometimes. And then it's for sure you get the benefit on the maintenance, right? Because remember, if you install that cedar next year, two years, three years from now, you're out there scraping and repainting with our product.
14:14.86
Paul Shapiro
Thank you.
14:21.34
Chris
You don't have to, you're one and done, put it up, apply that, that paint or stain. Then the next year, the year after the year after generally looks the same.
14:28.73
Paul Shapiro
Nice. So is this the reason why builders build with it? Like you guys are doing over $20 million dollars in revenue now, which of course is sizable for a for any startup, but especially a startup that's selling actual physical goods, right?
14:42.50
Paul Shapiro
As opposed to just subscriptions. And that's a lot. So people are using it. Is this the top reason that it's cost effective for them?
14:50.41
Chris
Thank
14:51.37
Paul Shapiro
Or is it because they prefer the low maintenance nature? Like what's the actual pitch when you're talking to somebody about why they should build with Acre?
14:58.49
Chris
so one of our distributors you know they went through what what happened with redwood they were starting to see what happened with cedar so they were really worried about being able to get cedar on a on a regular basis and then of course the the price getting out of control and again play that play that forward at some point people will have a problem cutting down a tree that's 50 60 70 years to regrow now you can try to say well i'm i'm regrowing it but you know the regrowth cycle is 40 years I mean, when you run those supply demand curves and you look at just the the sheer demand of these products, it's absolutely massive. So the the price over time continues to go up for for woods that are that that take a long time to grow. That's just inherent. So if somebody looking through that lens, that's that's unequivocally what they're thinking about is my point.
15:43.42
Chris
How do how do i get ahead of this? How do I make sure I have the supply to be able to keep to keep the business going or or if you're a builder, just to be able to use it to build your next house? But yeah, and now if you're talking to a homeowner, what a great story. Hey, I've just bought this product called Acre by Modern Mill. They use upcycle rice hulls, which is a throwaway agricultural product. That already becomes dinner party conversation. Oh, I didn't know how much rice we grew in this country. I didn't know there was a rice hull. didn't know you could take it and use it. So that becomes amazing dinner party conversation.
16:11.50
Chris
And now you're out there looking at it. It's not splintering. It's not cracking. The paint's not chipping. The stain's not failing. And so you have the maintenance and it ultimately looks beautiful because now you have this vertical grain, which really... really may or may not be there depending upon the the quality of the wood that you can get. So I would say it's ah it's definitely ah a price thing on on the wood. It's a supply thing on the wood in terms of the availability. But then absolutely, it becomes, I think for the builder, what ah what a great value sell. does People care about sustainability, right? They want to know what what have you done for me lately in sustainability and our our product not only
16:48.44
Chris
prevents having to cut down an old growth tree, but we're upcycling a throwaway agricultural product that left alone turns to CH4, methane gas, greenhouse gas. So there's there's a carbon story there. So people people love the sustainability aspect of it. And it's just, it's a really cool product. And then certainly when you're standing next to it, you want to touch it because it's with the rice hull, it has this feel of wood. So if you can imagine exterior siding and And a lot of people have these outdoor living spaces now that you're in contact with your exterior siding and go up, you lean against it, touch it.
17:17.90
Chris
There's that biophilic nature of our product that people actually want to be close to it and feel it and see it and ask about it. And i always talk about the dinner party aspect of this. People love it. but They love to talk about it, whether it's architects, builders, homeowners.
17:31.38
Paul Shapiro
Yeah, yeah, cool. So I would love to touch it and I'm looking forward to asking you how that may be possible. But before I do that, I want to ask you, Chris, a little bit more about the difference between being hardware based sustainability startup like yourself and then let's say somebody else who's just selling downloads or selling subscriptions, right? Like these hardware based sustainability startups that are not just messing around with zeros and ones, but they're actually selling products made out of atoms, like like your product, like Acre, they oftentimes face tough capital needs, right? You had to build an entire factory, for example. So how did you fund Modern Mills Scale-Up?
18:11.00
Paul Shapiro
You guys have raised over $80 million dollars in venture capital. How did you do it? And what advice you have for other founders who are building in physical industries also?
18:20.92
Chris
Yeah, I mean, you know, simple, not easy, right? That's the first part of that. I think, you know, you have to look at what are the capital needs, right? And obviously, as you said, to build out a a large scale, state of the art manufacturing facility, by the way, in in the US, so we've created We've U.S. jobs, we've got U.S. feedstock, U.S. rice hulls. There's a made in America story there that also people really resonate with when we think about the ecosystem of which we're selling to. They can jump on a plane, they can come down, we welcome people to do it. They land in New Orleans, we take an hour and 20 minute drive, we're at Modern Mill, we tour them through it. Everybody really loves to see it. But yeah, it's a state of the art manufacturing plant that ultimately can scale up to a significant amount of capacity, right, like much more than what we're doing today. And this is that build they will come mindset, right? What we didn't want to do is build a fixed amount of capacity that we sell out then go up. sorry guys, we can't supply you anymore. Now your lead time is 20 weeks. We wanted to hold our lead times as steady as possible, understand that we can continue to grow this over time. We want to be able to match the needs of the market. We're seeing that now. We're starting hit that tipping point where now we have national coverage, national distribution. We have distributors. We have top tier two-step distributors. have top tier dealers and retailers. that are adopting the product. We have builders that love working with it.
19:46.54
Chris
So as that demand continues to come, we can now just scale up in Mississippi at our existing plant. And we also have thought about plenty of redundancies, right? Because you want to make sure that we have plenty of redundancies so we can always be able to provide the product. So if you think about it through that lens, yeah, there's a big capital need. So the way we went about it was we raised just private capital. We didn't go to institutions at the beginning. it was just all high net worth, private individuals, um raised raised those through a few different series of fundings. um
20:16.85
Chris
And we yeah, we raised over $80 million, dollars I believe over $85 million. dollars And we built a pretty significant manufacturing facility to be able to do this. We're we're a high growth company. So I think at the beginning, it's about it's about build that capacity and make sure that you know that capacity is is there and you can tap into it when you need it. And then sort of the second phase, and and I bucket things pretty simple,
20:40.25
Chris
how to make stuff, number one, how to sell stuff, number two. So now we're in that sort of how to sell stuff phase. That's about awareness, availability, and then installation success, meaning people get it. They understand if I want that mahogany finish, I understand what coating I would use. I understand how to install it. I understand how to you know do a folded corner like they just recently did on the television program, This Old House. right they love the folded corners because you you can do so much that we haven't even got into the features and benefits of our product but there's so much on that so as people start to adopt it you really want to be able to match that that that need that demand that starts to come in and that's really all about sort of front loading it to build a state-of-the-art manufacturing facility that can be grown and scaled and that also allows you from efficiency standpoint to be able to get to a price point where we can compete with a lot of the bigger players in our space right because think about
21:30.67
Chris
the companies that we're competing against it's billion dollar companies, right? So, so it's us, it's David Goliath, right? And we have to make sure that, you know, we have the, the, the, the ability to scale and we can get to these efficiencies that we need to get to as that demand can comes in. But yeah, that's how we did it. We raised capital, you privately and you know, there's other options as, as time goes on and we're, we're constantly evaluating what those options look like.
21:57.27
Chris
But, um but yeah, there's, there's, it's a, it's a, it's an, it's a, to your point, if you're moving Adams and setting up a a big manufacturing facility, like we have, it just, it it just takes a significant amount of capital. Then I would also say on the, on the awareness side, so many people still don't know what they don't know.
22:12.27
Chris
they don't even know we exist, right? They don't know about the whole rice hole story, right? Our goal is in a few years, you'll start to see, you know commercials with celebrity, you know, personalities behind them that really starts to get out.
22:23.58
Chris
billboards, right? Ad various types of advertising, social media. We already have a great social media presence, but we just want to continue to grow that certainly billboards and just, just basic things that we haven't really done yet to really get that, uh, available, the awareness out there, which then that parlays into the availability, right?
22:40.48
Chris
Because people want it. Then all a sudden, miraculously it's available, right? Dealers will bring it on. Retailers will bring it on. Um, it yeah, yeah.
22:46.16
Paul Shapiro
So the factory, you you're talking about having a big factory. If you can, Chris, what was the total capex to create the factory?
22:55.87
Chris
Um, I mean, it's, it's, it's, it's intense, right? Because we have, if you think about the, the equipment that we have, it's, it's, it's, it's big grinding equipment. It's, it's just extrusion equipment.
23:05.92
Chris
Um, it's downstream equipment.
23:07.84
Paul Shapiro
Yeah.
23:08.16
Chris
It's, it's material conveying equipment. So it's, it's, it's pretty massive. So it's a, it's a significant, it's a significant number in terms of setting up a manufacturing facility like that. It's exterior silos. It's be able to store the material rice haul offloading.
23:20.68
Chris
We didn't even nobody, you know, it's like good luck trying to figure out how to unload rice holes for our type of a situation. We had to really like engineer that from the beginning.
23:28.98
Paul Shapiro
Yeah. Okay. So whatever it is, let's say 25, 50, hundred million, whatever it is to build the factory, you're talking about being in major growth phase. You want to do national ad campaign celebrities. So, you know, right now, of course, $20 million dollars is a lot for a startup, but in the the total,
23:45.72
Paul Shapiro
wood industry, right? It's a rounding error, right? And in order to make the impact that you want to have, you're going to need to get to hundreds of millions and eventually billions of dollars of revenue. Is that going to require you to then spend hundreds of millions or billions of dollars to build more factories? Or will you find contract manufacturers who might be able to find a way to do this for you, even if they can't, even if they're not currently set up to do that, to do your process, could they do that for you? Is the pathway for you more modern mill-earned self-manufacturing?
24:15.51
Paul Shapiro
Or is there some other way that you might be able to license the tech or have a cmo do something for you?
24:21.51
Chris
Yeah, mean, licensing is always an option, right? But i think our North Star has has always been, let's let's build let's build the one facility. Let's get it to where we're starting to knock on the door of 50, 60, 70% capacity utilization. And as you start to get to those numbers, let's start thinking about our second plant. And we've already, we've been thinking about our second plant, right? We've been talking to various states.
24:42.73
Chris
um there's there's There's funding available, you know, potentially from states there there's um but you got to think as we as we start to ramp up just even our current facility and you really start to show the that the market is really adopting the product in that to your point to grow to probably you know 100 200 300 million in in a massive addressable market like ours ultimately becomes a rounding error and i think you know the people have asked like because even this year we've done really well in terms of of growing our revenue in a year where maybe some haven't you know and i think our sliver of the pie is so small, right? We're just we're we're just adding on to that small sliver of of the pie. and In doing that, we're growing our sales. But yeah, I think as we get to where we're going to start to get into the second or third plant, I would imagine we would probably do it ourselves. But certainly, there could be an opportunity for for joint ventures, you know licensing. i mean, we're open to all options. We get a lot of those inbounds now of people that are interested in partnering in various ways, whether it's to, they would create an offtake agreement with us out of our current facility, um whether it's, you know, ideas around a JV, whether it's there, maybe like a big distributor and they want to just sort of distribute. But I think for us, it's, we've got the facility to do ah ah a significant amount of volume out of that first plant. And as we start to get to where we're using, let's say half or a little bit more of that plant, we probably want to really start thinking about where would that second location be?
26:04.49
Chris
And then the good news is, is once you, you know, you go through what we went through, we really have perfected what does that model look like. So we know exactly what it takes now to build one of these in terms of, you know, equipment, capex, timing on that in in in location, how to, how to, how to move the materials around, how to, how to set up rice hull offloading, right? These are things that we didn't have at the beginning. We had to figure all that out.
26:27.19
Chris
um feeding feeding the mixer right on ah on a very regular basis, like large amounts of material on ah you know and a very regular basis. These are not trivial things, but we've kind of cracked the code and figured that out of how to do it. So I think our second facility will be you know significantly easier for us. Plus, we have all the resources from from from the Mississippi plant.
26:47.06
Paul Shapiro
Nice. Well, that's exciting. It's certainly nice to be in control of your own destiny that way, if that's the way that that the winds blow for you, for sure, Chris. If somebody wants to use Acre, it's not like they're just ordering from your website. You guys are sold in stores. i looked on your website and again, I live in Sacramento and there's a store only five miles from my house that is selling it. So you guys must be in a lot of places. i think you can buy it in some Home Depots. Is that right?
27:11.38
Paul Shapiro
But not all?
27:13.08
Chris
Yeah. So we're starting, like, I'm not sure of, of the program that we're on with Home Depot, but I believe they can get it through their like special order, um, program.
27:20.28
Paul Shapiro
Bye.
27:20.52
Chris
They're, they're generally not stocking it. So, so the way that we've gone to market, right. Is just through what's called the LBM channel, lumber building materials channel. So it's us modern mill manufacturer sells top tier two-step distributor would then sell a dealer or a retailer, um,
27:37.02
Chris
or a lumberyard. Those are kind of interchangeable terms depending upon where you're at. um So, so what we, our goal is to get to that dealer lumberyard or retail level and have them become stocking. Why do we want them st stocking? Even if it's just a couple of, a couple of units, because if you know, you Paul are building a house or your builder,
27:56.62
Chris
is building a house and he needs a stick of acre, he can run to that store five minutes away and hey, I need a you know, one by six by 16 piece of of of acre.
28:01.14
Paul Shapiro
Oh
28:04.19
Chris
um So that's why we want people stocking. And also just they they get a price advantage for doing that. And it's motivational for them. And then we we want them to be able to really be talking about our products. So when builders come in, they can say, hey, Have you heard of this product? It's amazing product. It's stainable. It's paintable. Looks and feels like wood. Cuts like wood. There's there's no dust. It's clean air certification. They can they can you know ramble off all the properties and get people excited. And that's what we want.
28:28.40
Paul Shapiro
Yeah, and I was going to say something similar, which is, of course, nine out of 10, nine plus out of 10 people have no idea about Modern Mill, right? They're not going to know to ask Home Depot to special order a product.
28:39.89
Paul Shapiro
They're to need wood. They're going to go to Home Depot or they're going to go to Lowe's and they're going see what's there and they're going something there. That's awesome. But on your website, which we'll link to at the show notes for this episode at businessforgoodpodcast.com, you can put in your own zip code and see where you can buy Acre.
28:51.14
Chris
you
28:54.19
Paul Shapiro
Because if I were going to put something on my house, I would love to have that story. What you said, Chris, I would like to do something better than cutting down trees, obviously. But I also would think it would be cool just as a talking point.
29:05.43
Paul Shapiro
But like, yeah, this is actually made from rice hulls. That'd be pretty awesome. Let me ask you, there you know this has been a wild ride for you. like Most founders are never going to raise more than $80 million, dollars reach over $20 million in revenue, create a factory, be selling nationwide. You guys have been a large success story. What's the exit look like, though, for you? It's not a success story yet, right? Your investors have not exited. They've put in capital. They expect to see return on that capital.
29:33.08
Paul Shapiro
Are you guys going to be, do you think in the future, like you aspire to be acquired by a lumber company, a wood company, a Home Depot type company, know, IPO, like what what do you think is the way that your investors end up getting a return?
29:46.52
Chris
Yeah, I think any and all of those could could happen, right? So I think if if and when the time was right, if we ran a process that by our universe becomes anybody, like you're saying, it could be you know large strategics that are that are out there currently in our space that we've been maybe...
30:01.44
Chris
selling against, right? Or, you know, and they and they're seeing it that we're taking some market share. So there could be something like that on the strategic side. It could be, you know, some other, it could be, you know, private equity for sure. um i you know, i I think for us, our our North Star has really been to just focus on the um the blocking and tackling, like really get the manufacturing facilities set up properly, really work on those efficiencies, really create a quality product, Really create a this beautiful acre grain that that when people stain it, they go, wow, i cannot tell that is not a piece of mahogany.
30:35.03
Chris
um And then let them let people understand that in that next year, in a New England winter, goes through a free sloth cycle. You go out and you look at it next year. You're not having to scrape and repaint it. That in of itself is is going to create this... And that's what you described. It's this incredible momentum that we've developed, right? In a short period of time, we have national distribution. We have the fire rating in California, right? We have, there's, there's other, ah you know, states now that are, that are having similar issues to California in terms of fire prone areas. So when people understand that, wait, I can have this beautiful look and feel of wood. I mean, think about fences, right? You can't necessarily, as as the rebuilds start to happen in some of these areas, It's it's not ah it's not a good idea, and i don't even know if it's going to be allowed to use wood fences. So this is an alternative to that. It can look and feel like wood, but it's got a fire rating. So there's so many uses, and I think as we continue to figure out where does this product go, where are we really you know meeting the demands of the market, we're always like listening to our customers say, you know what do you need? what What could be interesting? i think as we continue to do that, good things will happen in any of those areas.
31:32.73
Chris
things that you mentioned, whether it's a strategic acquisition, which that's generally probably low hanging fruit, right?
31:36.45
Paul Shapiro
Mm-hmm.
31:38.13
Chris
Is that, is that idea of a strategic acquisition? Because again, they're, they're in the space, they understand it, or they're, they're in our ecosystem in terms of they already have the distribution, everything lined out, you know, ah IPO.
31:48.33
Chris
I mean, they're the, you know, we, we haven't thought too much ahead about that, but, but I think as, as if we focus and do the right thing and really continue to develop Our top line revenue, continue to focus on our efficiencies, focus on our gross margins, make sure we have ah a good, healthy, sustainable business from a financial perspective.
32:04.32
Chris
I think all of those things become options, right, right for us. And, and um you know, it's early so for us still, right? This year, we've done over $20 million in revenue.
32:15.81
Chris
And you know next year, we have we want to grow from there. So I think we want to you know get into it a little bit more and see where seer things go, see how the market develops. But yeah, the the ultimate success, I think, that we've had up to this point is figuring out how to make it, figuring out how to sell it, figuring out all of the the various SKUs that we wanted to make, how to credential those, how to how to get that enemy people.
32:38.40
Chris
We should talk about that. To get people is probably one of the most challenging things, right? To find really good people and build a team and focus on the culture. So we've we've done all, created the creation of quality jobs in you know parts of the US that need it.
32:51.65
Chris
Like it's an amazing story and people really resonate with that story. um And that's what we want to continue to do.
32:58.27
Paul Shapiro
Okay, so you're in no rush to exit. Apparently no need to exit, financial need at this point. So we'll be looking forward to seeing the future success that you'll have and and one and when your investors get that return, what a great moment that'll be for them too. So Chris, there are lots of ideas that people have for doing lots of cool things with waste products or other ideas that can enhance sustainability. i was actually reading a paper recently about using rice hulls and fermenting them to make
33:32.41
Paul Shapiro
animal feed. So you don't have to like grow. um You don't have to grow soybeans or corn to feed to animals. And it's pretty cool to read about some of the stuff like the other uses of rice hulls even. And i I'll include a link to that study in the show notes for this episode at businessforgoodpodcast.com. But are there other ideas, whether so like upcycling or otherwise, that you want to recommend that somebody check out if somebody wants to start their own company to try to do something and they're inspired by you?
34:01.98
Paul Shapiro
What should they consider doing?
34:04.70
Chris
You know, I think um I travel quite a bit, as you can imagine, right? So i'm always flying somewhere. So I think finding ways to create more healthy food options in general, right? I think if if you're at a hotel, right?
34:20.02
Chris
you know there's There's some hotels that that do okay with it now, and and certainly there's DoorDash, but I just think there's there's got to be a way to solve for just having you know simple, healthy meals like in a more on-demand basis. so I think as as for from my own personal perspective, that's that's what i you know if I'm getting ready to go on a plane, I'm always thinking about...
34:39.38
Chris
you know, what, I mean, generally eat healthy when I'm at my house, right? I cook a lot of my own meals, but it would be nice to just be able to be somewhere and just, yeah, maybe maybe it's through tech that already exists. but right now you still have to, you know, go through DoorDash or whatever, you know, one of these apps and figure out like, what's the best restaurant, what are the healthy options?
34:54.08
Chris
It's not super easy, but I just wonder, could there be a hotel chain, something like that, that really offers, like it's it's really catered towards people that, you know, want to get there. And then the other thing i would add to that is like, so so I guess this is, this would be the concept of some type of a you know, hotel offering that, you know, they really focus on, you know, air quality and that this sort of plays into of the world that we're in with Modern Mill is creating products that are that are great for indoor, great for outdoor.
35:19.17
Chris
um they're they're They're, you know, they're healthy to work with in terms of there's there's no skin irritant, no lung irritants. When I think about when I'm in a hotel room, like not having air freshener having maybe materials that are more um, just healthy choice kind of materials, whether it's carpet or whatever else.
35:33.96
Chris
But I think about those things and just in, in, you cater towards the, the, the more conscious, um, you know, traveler these days, like it's, it's probably thinking around, you know, diet, lifestyle.
35:44.72
Chris
I mean, And these are the things that people are really fixated and focused on. So I think making that more attainable, it's still, it's, it's kind of wild to think that there hasn't been this yet. Like maybe there's smaller versions of it, but it's not like in my face everywhere to where it seems like it's an option for me.
35:59.32
Chris
So I would love to see that.
35:59.82
Paul Shapiro
Yeah. OK, well, I'll tell you my own trick for flying. If you want to make people around you on the airplane envious, pack in your bag. It's an amazing technology. It's called a carton of raspberries.
36:12.98
Paul Shapiro
And that is not code. That is literally a carton of raspberries in your bag. And whenever I every flight, I bring a carton of raspberries. It's like my my ritual. And everybody around me is so envious that I have fresh raspberries. And it's such a simple thing. It's a few dollars. Don't buy it at the airport. That's a rip off. Buy it and put it in your bag. And you know it's in a hard clamshell package, so it's not going to you know explode in your bag or anything.
36:35.76
Paul Shapiro
And I find it a really great way to eat something healthy on a plane and make everyone around me wish they were me because it's so much better than eating you know pretzels or whatever. So that's my that's my tip. So not not in any new company there, but it is a it is something that I recommend.
36:51.67
Paul Shapiro
um
36:52.82
Chris
Thank you.
36:52.82
Paul Shapiro
Finally, oh, go on. No, no, you have a you have ah something else on the other tip.
36:56.95
Chris
No, that's it. And I'm umm i' so i was getting ready to fly probably tomorrow. So I'm going be going to look for that. Thank you.
37:02.46
Paul Shapiro
I hope that I inspire you and people listening, Chris, to eat raspberries. a Little would make me happier than to be a trendsetter on that. Okay. Resources that you would recommend. You've done a lot. You've achieved a lot.
37:14.62
Paul Shapiro
Are there any resources that you have used, other books or otherwise, that have been useful for you that you would recommend for anybody else seeking to do something important in the world?
37:26.97
Chris
You know, I think from a resource perspective, there's there's obviously so many books out there, so many books on business, you know, marketing, scaling. I think the the resource that um is is probably most important is is the ability to build a team, right? So, um and that can happen various ways. You can certainly read books around that. um But I, but I think that I think in terms of where to focus that it's, it's focused on how do I build a team, especially when you're in the business of, like you said earlier, moving atoms, making stuff, right. It's, it's, it's really important to have good people that are there. I mean, you've got be able to do what you're doing on you know, ah ah a Monday at two o'clock in a,
38:03.16
Chris
you know, Wednesday at three zero in the morning, right? You have to be able to kind of continue to, to, to get product Does it have a good quality, good, the right consistency? That's all about, I think people, a team. And so from ah a resource perspective, that's really what I try to focus on. And then i I think the other piece I would say is that, you know, just focusing on um making sure that, you know, you yourself are in a good space, right? However, however that works. So it could be, you meditation, yoga, movement, walking, hiking, you know, making sure you take the time to do the things to put yourself in a really good mental state, drinking tea. So I mean, if somebody had to categorize me to probably be hiking, going for walks, spending time with my with my dog, drinking tea, and then just cultivating that time, because I think that's important, you know, to be able to then go out and do the things that we need to do as entrepreneurs, right? So deal with challenges, deal with situations that unfold. So the better you're in your state, the better going be able to deal with those things.
39:00.34
Paul Shapiro
Yeah, it's funny you should mention that. I'll tell you, there's very little that improves my own welfare than just taking my dog for a walk along the Sacramento River or taking him to the park. And I do a lot of work calls there. And so I'm i'm basically with him and I'm i' doing various calls or I call my parents or whoever, you know, but I do something that is really, really pleasurable for him and for me.
39:21.32
Paul Shapiro
uh so i i i joke that like the greatest welfare enhancer i have it's not money or fame or status it's like my dog you know like you know spending time with my dog definitely imp improves my welfare more than anything but listen chris i'm rooting hard for you guys modern mill is a really cool company and uh by the way are you familiar with modern meadow do you know those guys oh check yeah check them out a very different company but it's uh Another cool company that is with a very similar name, they're making ah they're basically making alternatives to weather.
39:42.50
Chris
No. Oh, wow.
39:54.65
Paul Shapiro
So it's called Modern Meadow, and they're using but biotechnology to grow microbes that look and feel like weather but aren't leather. But anyway, theyre they were founded before you guys. So the the modern slogan is very popular one, I guess.
40:07.63
Paul Shapiro
But I'm hoping that you guys have built many factories all around the world, including where I live in Sacramento. And I'll look forward to having some piece of my property have acre on it soon. So good luck. And again, congratulations on all the success you're having.
40:21.43
Chris
Thank you, Paul, and thank you for having me. It pleasure.