Paul Shapiro: [00:00:00] Rotem, welcome to the business for good podcast.

Rotem Cahanovitc: Hi, Paul. It's really a pleasure to talk with you tonight. Today, tonight, different times.

Paul Shapiro: It is always difficult trying to schedule any calls between Israel and California, like Israel and the East coast. No big deal. But Israel and California, I guess a little bit trickier.

What's harder is actually California and like India, because there is like stretching the limit. Yeah, you are going to the limit where basically you're going to be talking at 11 p. m. essentially. but anyway, it's great to talk with you. I am excited about what you're doing because I am a fungi fanatic, like you are.

And so I can't wait to talk more about fungi and what you're doing to harness the power of the fungi kingdom in order to try to do something good in the world. So let me just start from the beginning. Like what got you interested in fungi? Because before you were doing this company, you were interested in mycology.

So why? Like, why were you thinking, huh, this, this interesting kingdom deserves my attention?

Rotem Cahanovitc: [00:01:00] how did that obsession take over my mind? It's a great question.

Paul Shapiro: You were, you were zombified like, you know, like

Rotem Cahanovitc: the last of us. I haven't seen it, but I understood the digits of it. Yeah. So actually I did a degree in biology and plants, and there was a small course about fungi and Also connected to my natural experience of, of just seeing this organism, like through the actual mushroom caps in a forest and just not really like understanding what I'm seeing and, and, curiosity.

And then, the more I delved into it really fast, I knew that this is, what I want to explore.

Paul Shapiro: And where were these forests that you were looking at? Was this in Israel?

Rotem Cahanovitc: also, I lived all around the world. I was also in the States and, in Australia. But I did a long travel after... [00:02:00] I finished the army and I spent a lot of time in New Zealand and over there they have just a huge variety of and all the different kinds of colors you can imagine purple and blue things that you just don't really understand the color as you see it seems like something synthetic but it's just popping out of the moths in the forest.

Paul Shapiro: Nice. So then do that lead you to, study mycology in particular, or were you just focused more generally on biology at this point?

Rotem Cahanovitc: So that was my first degree. And then I continued to do my second in Weizmann Institute specifically about mycology and the different aspects, material science and ecology, which I, eventually And, specifically, their interaction with trees in the forest and the web that they're creating there.

Paul Shapiro: You know, I've seen for a number of years, people have been talking about the wood wide web and how [00:03:00] mycelium is helping all these trees communicate with each other. But I've seen some studies lately, or at least some articles lately questioning how true this is. Have you seen these same articles?

Rotem Cahanovitc: I'm not sure.

Like anything in science, there, there's a. All of the, the voices I would love if you could send, but I'm not sure what you're referring to.

Paul Shapiro: Okay, well, I'll include it in the show notes at business for good podcast. com, but it, it, it, at least the allegation is that it's a little too, it's a little too much of a nice story, that it is not as, as nice as it, might have appeared.

but anyway, I am, really excited to talk with you about what you are doing to harness. Mycelium and how you're going to help save the world with it. So what happened, right? I'm like you were in Ethiopia. And first of all, why, why were you in Ethiopia and what happened that led you to have this lightbulb moment here?

Rotem Cahanovitc: so between my degrees, I did a volunteering in [00:04:00] Ethiopia. I was just, I wanted to do my two bits and I found this beautiful organization to teach architecture and I was there three months and while I was there, it's a country of 110 million people and they have no waste infrastructure whatsoever.

It's, it's really crazy to, to see it. So, they. Do every family does a small plastic pile in front of their house at the end of every day and they burn it. I had to do it myself and, just see plastic burning all around. They don't have running electricity or water, but they have plastic and cell phones.

And that really kind of, woke me up to the, the reality. And I started exploring this problem and I saw that it's, pretty much the same also in Western countries, it's either landfill or incinerated, [00:05:00] but so it's done behind some, some wall, but it's really a worldwide, You could say plague that we're missing, that we're dealing with and, then through my, my, like, what I saw essentially is a waste problem.

Right? And there is no wasting in nature. It's a human invention. We invented this and in nature, the fungi are the grand recyclers. So, through my studies and experiencing this problem,that was the foundation of my passion towards me. Right.

Paul Shapiro: You referenced Western countries and what we're doing with plastic, Rotem, and, I think it's, you know, for people to hear, well, in Ethiopia, families are burning their plastic garbage, people might think, well, that's a real shame, but of course, we have a better system here in the West.

however, what you're implying is that actually we don't have much of a better system. So for [00:06:00] people who think that there. Plastic is being recycled or in some way, move to some ecologically friendly, new second life. What's happening? Like what's happening in these industrialized countries with their plastic?

Like when you put trust, when you, when you're done with a single use plastic, what happens to it? .

Rotem Cahanovitc: so we're, we're really addicted to this material. I mean, look, anyone who's listening to this podcast right now would look right and left and everything is plastic and that's fine because it's a wonderful material.

but then it's wonderful for a long use. And 40% of plastic is being used currently for single use, which is. Something that's not not appropriately functioning because we're creating a material that we use for a few moments and then leave a waste. That would, even be when our grandchildren die. So it's just ridiculous.

[00:07:00] and, only from the entire, waste that we do collect only. 10% between 9 and 10% is actually recycled and even lower than that is, utilized, more than than once. So, effectively, it's not being recycled at all. And. And not also composted,

Paul Shapiro: right? So we, speaking of composting plastic, we actually, a few episodes ago had on another Israeli entrepreneur, Daphne Nissenbaum from TIPA, and, you know, what they're doing is essentially trying to create plastics that are compostable, which is different, I think, from what you were doing was more of like a, plastic recycling.

Well, we'll get, I'll let you describe what you're doing, but I'm looking forward to hearing what, what you're doing and, and how it's different. But one of the points that Daphna made is that, you know, pretty much all the plastic that you use is going to landfills at best, right? [00:08:00] Like, even if you put it in the recycling bin, the chance of it being recycled is low.

And if it is recycled, the chance of it being recycled again is low. And so essentially the plastic that we use is going almost entirely to landfills. And if not to landfills, then into marine waterways, which of course presents all types. of horrible problems. And so all the plastic that we've ever used in our lives ever.

Is going to exist hundreds of years from now, and I think about, you know, even just what I ate, today so far, which, I had, you know, a tortilla that came in a plastic, a plastic bag, I had hummus. On the tortilla, which came in a plastic tub, I put in a bed of greens, which came in a plastic bag.

I put in tofu, which came in a plastic tub. I put mustard on it, which came in a plastic jar. And so it's like everything, I mean, the microphone that I'm talking right now, the headphones, the computer, like the printer, everything near me is plastic, essentially. And it's all going to be here. Hundreds of years later, [00:09:00] and you have a different idea about what to do with plastic, not to stop using plastic, but to change the way that we make plastic.

So what was the idea? Like, you didn't want to see it getting burned like you saw in Ethiopia right then. So what did you think you could do to actually create a different type of plastic industry?

Rotem Cahanovitc: Great. Thank you for the question. So essentially, When we're now singling out the packaging. So it's a huge, huge world.

It's a 1 trillion market. And we have all these different kinds of products that we package. And for them, you need different material solutions to give them. A shelf life, or this is what a package does, right? And when you explore this problem that you see that actually plastic is doing it really well, to give a shelf life and sometimes better than glass and better than aluminum.

As far as the resources and the carbon footprint that it leaves. So we zoomed in about into [00:10:00] plastic, and now there's a lot of different kinds of plastics. And when we're zooming even further into food packaging and cosmetics, so it's not really just 1 material. It's a cocktail of materials that are mixed together to create some kind of functionality as in a shelf life.

so for example, something that would give the cheese, the two weeks it needs, it's not the same as the cosmetic product product that needs two, three years. And these are called additives, additives that we add to plastic to give shelf life. And actually. We think we believe that this is one of the biggest problems in this huge realm, because these additives are the ones that are disrupting recyclability.

for example, 1, 2 of the most common use plastics, polyethylene and polypropylene, they're totally [00:11:00] recyclable. But when you mix it up in this cocktail of materials, some of which are disrupting the recyclability. And then it's hard to collect and distinguish, and you get just a whole bunch of different materials that you don't really know what's in there.

Then you have this really degraded. plastics that don't really give a shot of life. So effectively, there's no market need for them. And then there's, there's, you see these lower cycling rates. so what we do at major, right? Is we create, biomaterial and new biomaterial using fungi. we'd like, you believe that there are our factory to the future.

Paul Shapiro: and, We in turn think specifically for sustainable materials. And this additive is to be mixed with all these different kinds of plastics, fossil plastics, and bioplastics, and give the shelf life. The [00:12:00] product needs, and not disrupt recyclability and not this right compostability. So just, when I were a low volume constitute of the package that gives the shelf life, So basically what you're saying and help me if I'm misunderstanding this, is that when you think about plastic, like I just think about it as like fossil fuels that have been turned into plastic. You're saying there's other ingredients that go in and those make them less recyclable, not less compostable, but less recyclable.

And you are going to grow. Oh, both. Okay. Interesting. And so what you want to do is create those additives from fungi, from mycelium, and essentially, sell those as a B2B ingredient to the plastic manufacturers so that they can have plastics that are more easily recycled. Is that the, is that an accurate assessment of the business model?

Rotem Cahanovitc: Exactly. Okay. Both recycled and, and composted. [00:13:00] Interesting. Okay. So, so for example, before you mentioned, and the wonderful work that they do, they could enjoy such a product because today what they can choose with is only these petrochemical, these highly polluting fossil materials that are very expensive and do a lot of harm, not only in recycling, but also in manufacturing, like all these, Titanium oxide and all all these things that you would really be surprised that they put it in packaging and in food packaging, stuff that you don't really want their

Paul Shapiro: interesting.

Okay. So what is it? Right? Like you, you're making these, pellets that you can sell to, plastic manufacturers. out of mycelium. So how do you do it? Obviously, I'm not asking you to divulge any trade secrets here, but from a general overview, like what is the actual product that you're making and how do you make it?[00:14:00]

Rotem Cahanovitc: So, we mimic the same way that fungi act in nature. Like we said before, that the ground recyclers. So we take industrial organic waste. From all different waste streams, it could be either food or agriculture or biotechnology. You can imagine wood chips from Ikea from their furniture making. Then we grow fungi on this waste and they eat it up and create biomass.

And, from that biomass, we extract our materials that we later integrate to create those pellets that you just mentioned.

Paul Shapiro: So are you using the whole mycelial biomass or are you taking extracts of that biomass to turn into these pellets?

Rotem Cahanovitc: different, extracts of. Of it,

Paul Shapiro: and then what happens to the remaining biomass

Rotem Cahanovitc: because we have a [00:15:00] green process, it could either be used as compost or fermented again.

But it's with no hazardous waste.

Paul Shapiro: Cool. So how much have you scaled this so far? Like, it's still a relatively new company. You guys are founded in 2021. My understanding is you have. Oh, 2022. Excuse me. Thank you for the correction. So how many folks are working there now and like how much have you scaled this mycelial fermentation process, to the point where you know that this actually works and is a viable process?

Rotem Cahanovitc: so we're a family of six and it's, wonderful. And we actually growing and, Now, currently, we're indeed in that early stage. We're optimizing our process. We think that we'll have a prototype of the product, early next year. And in 2025, to to actually have a pilot facility creating, couples of [00:16:00] kilos.

And from that, you can create a lot,

Paul Shapiro: a couple of kilos of, per of products per month or per year or what no per month per month. Okay. And then you, a couple of kilos of biomass or a couple of kilos of the final pellets.

Rotem Cahanovitc: Okay, cool. Any of the final. Pellets, I would say, like I said before, because we're a low constitute, the main constitute is, is different plastics out there, bioplastics and fossil plastics.

we want to focus in on, on bioplastics, but there, there's not a lot, out there. At the moment.

Paul Shapiro: Interesting. Okay, cool. Well, it's certainly exciting. So how much have you made so far? Like, how do you know it works? Like you're saying we want to have a prototype ready. but how do you know it works? I can presume you've already made some of this stuff and that you have added it to plastic.

And what was that like?

Rotem Cahanovitc: Exactly so. And then we tested it out and saw that it [00:17:00] prolongs the shelf life. And now we're optimizing the process. We tested and saw that it has these properties. Okay.

Paul Shapiro: Well, that's great. How much money have you guys raised? So you've tested it. You have shown that it works and that you present that data to, the investor class and they have then invested in your company, obviously got half a dozen people working there, or you're still pre revenue.

So how much money has made right, earned an investment so far?

Rotem Cahanovitc: A million and a half.

Paul Shapiro: Okay, well, that's a good, that's a good size for a, for a company as early stages, what you guys are doing. So first, congratulations on your successful fundraising. Are these investors who are these investors who are typically looking at plastics?

Are they investors who are interested in, sustainable, foods? Like what is, what's the type of investor who would look at made right and think. That's where I want, that's the company I want in my portfolio

Rotem Cahanovitc: are our lead investor is for a start the wonderful incubator sitting in the north of [00:18:00] Israel and there are biotechnological,Incubator, that focuses on food tech and, and the different, biotechnological companies like us as well. And they're led from, in industry partners, to Nova and Tempo and our crowd and Finister, which is. Our crowd, a lot of people know is a, is a global VC and Nova and temple are actually food companies in Israel.

So, like, we hope in the future, we can provide them the packaging that they need in order to not only create great food, but also have it, not create huge amounts of waste.

Paul Shapiro: Yeah, well, that's great. So congratulations on bringing on these very big names, in the, food industry into the cap table. So early on, that's definitely exciting.

you've said in other interviews, right? that, you know, when you're [00:19:00] looking at plastics that often you see a trade off between performance and sustainability that you can have performance. Or you can have sustainability, but you're generally not going to have both. So you're trying to solve for that problem.

what is the tradeoff, generally speaking, like, what are the performances, what are the performance attributes that can be hampered by certain types of sustainable materials that you're seeking to correct here?

Rotem Cahanovitc: So the, the main, ingredient in the cocktail is, is either a bioplastic or a fossil plastic.

So bioplastics or plastic made from sustainable, materials. that that we can make again and again, and not drilling the ground and finish all our resources. And, the, these, these plastics, they give that mechanical properties, but then that means, like, how flexible it is or whatever. But then also a lot of the times you need to block [00:20:00] from the outside environment, you can imagine the, the coffee packaging, that you have a lot of the time it's a plastic and some kind of aluminum or whatever.

So these attributes, these, these materials are giving the performance, as in the shelf life to, to the package.

And, these aspects are, what make. the products, a lot of the times not sustainable, either because their, their source is entirely from fossil fuels, or if I went through the entire trouble of making this wonderful plastic that's made from corn or bacteria or algae or whatever, then to actually satisfy the industry needs.

their performance needs. That means a shelf life. they have to be mixed with these, fossil material, these fossil additives. And this is creating this trade offs, between sustainability and performance. [00:21:00]

Paul Shapiro: And by utilizing mycelial extracts, you think that you can get the best of both worlds, then presumably that you can get the performance without the sustainability downsides that you were just referring to.

Exactly. Interesting. Okay. cool. Well, I can't wait to see it and feel it and touch it and hold it. So I hope that when you guys start producing those kilograms per month that I'll get to try some plastic that is utilizing it. But let me ask you right. I'm like, you were doing something very different, you know, you were basically, studying science and biology and so on, and now you're acting as a CEO of a small startup.

So what's changed in your life? Like, you know, does, do you find that the skill sets that you studied in school were useful for you to be a CEO of a company? Or do you have to learn most of what you're doing now while on

Rotem Cahanovitc: the job? Definitely while on the job, it's, like everybody says it's, endless rollercoaster.

And this is, I mean, you have, you [00:22:00] have to, to want to suffer a bit, I guess, to be a founder of a company. And that's like the basics of your personality, I guess. it's really intense and I love it. It's, what makes it for me interesting. Yeah, sorry. Go ahead. You

Paul Shapiro: mentioned that it's a roller coaster that you have to want to suffer.

So what do you think is the ratio of days in which you're suffering is greater than your elation or your elation being greater than you're suffering?

Rotem Cahanovitc: wow, good question. I mean, I think for me, it's, it's, it's a lot greater the good. But it's, it's just, constantly throwing you, you know, kind of like those balls that you throw in the room and then they go all directions.

So it really depends on the moment, but it's definitely, for now, good.

Paul Shapiro: What's been the hardest part of it for you so far? Is it the fundraising, the management, trying to advance the science, like what's the actual difficulty for you [00:23:00] at most days?

Rotem Cahanovitc: so I would say the fundraising, it's not necessarily, hard, but it is that the circumstances where you find yourself, under constant, Glass looking into every thing you say, and that's fine. This is the investors job to understand how deep, you know, something and ask good questions, but just that the general theme is always to undermine kind of what you're saying. so I do love it because it also allows me to share what we're doing.

And a lot of people get really excited and really love what we're doing. Oh, that's pretty cool. The theme of it. The theme of it. I would say that's the difficult, part.

Paul Shapiro: Yeah. yeah, you know, it is the investor's job. but it is difficult because these investors are oftentimes generalists, whereas you are a specialist on your topic.

[00:24:00] And so there is a some level of difficulty of, trying to get through like what you are completely obsessed with and you're devoting all of your waking hours to, to somebody who is seeing. You know, literally, maybe 100 pitches or more a month, and they are just a generalist on a variety of topics as opposed to being a specialist.

Let's say, in this case on plastics or fungi fermentation and so on. So I get what you're saying. You know, the head with the crown is always the heaviest. But, I think an effective CEO, can help to distill the basics of what the company is doing and why it's valuable to people even who don't have an expertise in, in that particular field.

And so I hope that as you continue to grow the company and raise more investor capital, that you will find great success in doing that. but for now, let me just, yes, you're welcome. Let me ask you though. You know, you have done a number of things. You've lived in a lot of places and you're now embarking on this entrepreneurial journey where hopefully you'll be wildly successful.

But I presume that there have been some resources for [00:25:00] you, right, Tim, that have been useful in your own journey in starting this company and now growing it to a half dozen team members and hopefully going even further. So are there any particular things that you would recommend to other people that have been helpful for you where you would say, Hey, check this out, cuz it was useful for me.

Rotem Cahanovitc: Yeah, definitely. first of all is create a network of people that you can take advice from. That's the basics of how we grow as a network, similar to the way or just humanity and societies. Right? don't be alone. And don't be afraid to ask questions. And then, like we spoke before, there's a lot of different things that you have to learn while you go.

And, at the end of the day, either it's a customer or an investor or your employee. we're all just humans and we all kind of take the same. So there's, a few books I really,[00:26:00] with me for this journey. one is the, the influence of, the psychology of, persuasion. I can send a link and it's just talking about how we are all being affected by the same principles.

I think it's really a known and and the 2nd.

Paul Shapiro: Yeah, I just want to comment. So, I, I love that book and we'll include a link to it in the show notes at business for good podcast. com. but 1 thing I particularly love about it. Is that people who read it, you realize how subject to these types of influences.

We all are like, no matter how smart you are, no matter how much, you know, like we're still human, like you said, and we still are influenceable by the same things generally speaking. And so even reading the book, you realize like you are being influenced in lots of ways. Even once you realize the methods of influence.

You're [00:27:00] not free from them, like you still are infeasible or human, but it's a great book. We'll link to it. And what's, what's the other one?

Rotem Cahanovitc: an NLP practitioner. So it's kind of a mindfulness and it's a place where you can convert more of those really eager, annoying, Oh my God, I hate this day moments to, okay, it's a, it's, it's a journey.

Paul Shapiro: Okay. cool. we will, certainly, put that in the show notes as well for folks who want to check that out. So finally, let me ask you, you are obviously, committed to made right for some time to come. Hopefully you'll be doing this for many years to come, but I'm sure that you have lots of ideas for different types of companies that you would like to see exist.

So if there's somebody listening to you right now who is thinking, oh, that's really cool what he's doing. I want to maybe do something like that, or I want to go on a similar. What ideas would you throw out there? Do you hope that somebody else will create a company to do while you are doing

Rotem Cahanovitc: mid right?

yeah, I would [00:28:00] love love to comment on that. So, actually, most of where money is going in startups is not towards material or hard tech companies. It's going towards software because that's where there's a lot of returns, like cyber and fintech and that's fine. But, actually a lot of our big problems today.

Are in climate tech, and these are hard problems. And I mean, in the sense that they're material problems, and I would urge anyone curious or believing in an idea. That could help us make more sustainable materials. I think it's through fungi, but there's a bunch of different organisms that we could use and kind of integrate how we would want to keep our high life, life standards without ruining the planet and shooting ourselves while [00:29:00] we're doing it.

and just go for it. I mean, when's a better time than now we need it. We really need. Like I could dive into the plastic problem in the value chains, and I can say a lot of specifics, but actually it's all different materials that we consume around this.

Paul Shapiro: It's excellent advice. I am in total concert with you, Rotem.

I, I just, I hope that many people will be starting companies to focus on climate tech and materials and food and so on, because these are what are helping to. Drive the problem, the hole that we have dug for ourselves. So, what your advice is reminds me of somebody who I considered a mentor, in high school, same as Coleman McCarthy, who founded the center for teaching peace.

And he's a former Washington post columnist, and he always used to say for anybody who wants to make a difference in the world, there's only one word that you need to remember. And that word is start. Don't wait. The problem will get worse. So you better start now and start [00:30:00] focusing on it. So I'm glad that you're focusing on trying to create better plastics for a time.

Can't wait to see the company grow and to see made right plastics out on the market. And we'll be following your journey and I'll be rooting for your success.

Rotem Cahanovitc: Thank you so much.