#254 The Path to Cost Parity Between Sustainable Fuels & Fossil Fuels | Conor Madigan, Aether Fuels

CleanTech founder Conor Madigan (Aether Fuels) reveals sustainable fuel tech breakthroughs, smart hiring, & building resilient climate startups.

Join us as Conor Madigan, Founder and CEO of Aether Fuels, shares how their innovative tech is set to decarbonize aviation and shipping by drastically cutting costs and boosting fuel yield from waste streams. A second-time founder, Conor also unpacks his proven strategies for building high-talent, low-ego teams and fostering constructive tension for optimal results.

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Memorable Quotes:

• "The overall result of that is to cut the capex of a plant by about 50%." — Conor Madigan
  
  
• "Until you've built a big network of your own... it's pretty invaluable to have a top-notch recruiter." — Conor Madigan
  
  
• "If you compare an electrified system versus a fired system, you can boost the output by about 20%." — Conor Madigan
  
  
• "I… try to create a constructive sort of tension inside of an organization by pairing together certain personality traits." — Conor Madigan

In this episode, we discuss:

• 00:53 - Introduction to Conor Madigan and Aether Fuels
• 03:55 - Aether Fuels' core technology and market
• 05:27 - The innovation: cutting CAPEX and boosting yield
• 28:00 - The year-long "funnel" to choose the right climate problem
• 30:59 - Conor's philosophy on team building: high talent, low ego
• 32:00 - Creating constructive tension in R&D vs. Engineering
• 38:35 - Why senior hires need to be "player-coaches" at startups
• 40:30 - Transparent communication during challenging times
• 46:00 - Policy trends and market drivers for SAF
• 49:50 - Cost parity expectations for Aether Fuels' product

Links

• Conor Madigan | Aether Fuels
• Connect with Somil on LinkedIn | Connect with Silas on LinkedIn
• Follow CleanTechies on LinkedIn
• This podcast is NOT investment advice. Do your homework and due diligence before investing in anything discussed on this podcast.

Chapters

• 0:53 Introduction to Conor Madigan and Aether Fuels
• 2:42 Aether Fuels' core mission: decarbonizing aviation and shipping
• 3:12 ClimateTech OG inspiration: James Hansen
• 3:55 TLDR: Aether Fuels' technology and market
• 5:27 Visualizing the innovation: cutting CAPEX and boosting yield
• 14:15 Optimizing for 1-5k barrels/day scale
• 15:16 Feedstock flexibility and mixing waste streams
• 17:21 How the innovation was discovered (GTI Energy partnership)
• 19:00 The contrarian view on hydrogen prices in 2022
• 21:55 Conor Madigan's background and journey into ClimateTech
• 27:40 The incubation process with Zora Innovation/Temasek
• 28:00 The year-long "funnel" to choose the right climate problem
• 30:59 Conor's philosophy on team building: high talent, low ego
• 32:00 Creating constructive tension in R&D vs. Engineering
• 33:55 The invaluable role of top-notch recruiters
• 38:35 Why senior hires need to be "player-coaches" at startups
• 40:30 Transparent communication during challenging times
• 43:27 Why founders should share challenges and invite ideas
• 46:00 Policy trends and market drivers for SAF
• 49:34 Business model: tech & project developer, future licensing
• 49:50 Cost parity expectations for Aether Fuels' product
• 53:16 What needs to happen for widespread fossil fuel cost parity
• 55:10 Final call to action and where to find Aether Fuels

Transcript

Silas Mähner (00:00.12)
Today we are speaking with Connor Madigan, the founder and CEO of AtherFuse.

Instead of making those fuels by refining fossil oil, we are taking a variety of different sustainable waste streams. We dramatically reduce the net addition of CO2 into the environment.

have found a key innovation in the production process that was commonly overlooked.

are fortunately lots of sources of waste carbon out there. All of those waste streams have carbon that we can access and convert into fuels.

In this conversation, he breaks down that tech and the overall landscape of the sustainable fuels industry.

Conor Madigan (00:33.324)
we believe will give us the lowest production cost and highest yield.

We also took time to ask him about his advice on hiring and team building and it did not disappoint.

until you've built a big network of your own. Pretty invaluable to have a top notch recruiter.

Silas Mähner (00:53.198)
Hey, everyone. Welcome to another episode of Clean Techies, the best podcast for clean tech founders to learn from others. I'm Silas Maynard, Clean Tech Headhunter at Earth Tech Talent. And today I will be your host. All right. Today we are speaking with Connor Madigan, the founder and CEO of Aether Fuels. In the sustainable fuel production industry, they have found a key innovation in the production process that was commonly overlooked. This innovation combines two core parts of the production, leading to a much lower capex to build projects.

which in turn leads to projects that make more financial sense or projects that pencil out. In this conversation, he breaks down that tech and the overall landscape of the sustainable fuels industry. It's also worth noting that Conor is a second time founder and in the first company that he founded, they built large machines that produced OLED screens. It's a very large company that ended up raising hundreds of millions of dollars in capital and has sold over a billion dollars worth of machinery. In 2020, he stepped away from that to go build Aether fuels. Because of this second time founder aspect,

We also took time to ask him about his advice on hiring and team building and it did not disappoint. He offers a lot of really interesting gems, which we'll talk about a little bit later in the show. Before the show starts, big shout out to Earth Tech Talent for sponsoring this episode. If you do need help hiring top talent, but don't want to pay absurdly high recruitment fees, reach out to Earth Tech Talent today. All right, enjoy the show. All right, Connor, welcome to the podcast. How you doing today?

Great, great, thanks. I'm to be here.

Yeah, super excited to have you. Where are you calling in from again?

Conor Madigan (02:16.935)
from Chicago where we're home based.

Nice, so I'm not too far north of you, just up here in Wisconsin enjoying the slightly colder weather.

Nice. Yeah, I had a very hot weekend.

Yeah, it is summer obviously, so it's fine in Wisconsin now, but I just think, thankfully we're not going to be here this coming winter for much of it. So, but anyways, for anybody who's not familiar with you, of give us a quick intro on who you are and what you're working on today.

Sure, yeah, so I'm the Ather fuels CEO and co-founder and our company is developing what we believe to be the most cost effective and flexible platform for producing sustainable fuels for some of the industries, the big industries that can't electrify like aviation and ocean shipping. And we're aiming to bring them fuels that are cost effective and enable them to decarbonize.

Silas Mähner (03:12.032)
Amazing, amazing. And something we like to ask people at the beginning is also who is a kind of a climatech OGRs, we like to call them a clean techie, that you would love to be able to have dinner or coffee with somebody who's really kind of inspired you or been a changemaker in this space.

Yeah, I mean, it's probably not an original answer for this crowd, but I would definitely point to James Hansen as sort of one of the most interesting guys to talk to about really bringing the science of climate change to kind of the broader community and making us really aware that this was a challenge that we needed to tackle urgently.

Yeah. Okay. Awesome. Actually, we haven't heard that name yet. I appreciate that. Now let's spend a little bit of time kind of running through the technology, kind of a TLDR. again, explain what you're making and who do you sell to and we'll go from there.

So we make sustainable fuels that are drop-in compatible with existing fleets of planes and ships. So in short, what that means is we're making jet fuel and diesel fuel that's chemically identical to the fuels they use today. But the critical difference is that instead of making those fuels by refining fossil oil, we are taking a variety of different sustainable waste streams and converting those

waste streams into these fuels so that on a life cycle basis, we dramatically reduce or even eliminate the net addition of CO2 into the environment associated with using those fuels. And the innovations that allow us to bring something unique to the marketplace are based on some unique catalysts process and equipment technology that greatly reduces

Conor Madigan (05:04.856)
the cost of the production facility and increases the yield, the amount of product we can get per feedstock coming in, and to do this with a lot of flexibility to use different types of feedstocks. And altogether, those innovations have allowed us to really bring something that's a breakthrough for the market into reality.

So you probably can't explain all of it otherwise you give away your secret sauce but can you just for somebody who's not you know super familiar can you can you help me visualize kind of the core blocks of what is usually done and then which pieces you're able to remove or make more efficient that you're doing in your process.

Yeah, so there are a few different ways to make sustainable fuels. So let me briefly explain what they do today, which is a main type of source of fuels, and then explain what the industry is moving to. And that's really where we are able to bring some unique innovations to the table. So today, most of the sustainable fuels that we have are produced by converting waste fats and lipids, like used cooking oil.

into jet fuel and diesel fuel and that's a what's called a hydro treating process that people often use the acronym HEFA or HEPA to describe and that is a great technology. It's why we have these sustainable fuels like sustainable aviation fuel or SAF today but there's not a lot of used cooking oil in the world and so even if we use all of it up we're only going to be able to service a few percent of the world's demand for

aviation and shipping fuels. So we need to be thinking about what's next. What are the abundant sources of waste carbon that we can use? And there are fortunately lots of sources of waste carbon are out there like CO2, biogas, agricultural waste, forestry waste, industrial off gases, all of those waste streams have carbon that we can access and convert into fuels. So that's where we're focused that sort of next wave.

Conor Madigan (07:10.156)
Those have enough feedstock for us to completely solve this problem. But the challenge is that these waste streams are much harder to convert into jet fuel and diesel fuel. And so you need more equipment, which increases the cost of your plant. And you're also constrained to pretty small scale plants relative to oil production because you can't get the same volume of feedstock in one place the way you can with

fossil oil. Fossil oil is really easy to put into a ship, move it around cost efficiently. So you can make really big plants. in the US, we use barrels per day as a scale. So like 100,000 plus barrels per day would be pretty commonplace for a refinery. If I want to aggregate wood waste or industrial off gases in one place, I'm typically talking one to maybe 5,000 barrels per day. So 20 or 100 times smaller.

And so that's also bad for capex efficiency because smaller plants just can't get as good economies of scale. And so we really got to tackle and focus on how do we bring capex down. But at the same time, we don't want to sacrifice yield because in the sustainable fuels industry right now, these fuels are very valuable to all of the aviation and shipping companies that want to meet all of their regulatory obligations to keep producing their emissions. And so how do we

cut capex but also maximize yield. And that's really the fundamental problem. So one of the main ways that people have proposed to do this is a route called the Fischer-Tropsch route. And in the Fischer-Tropsch route, there's basically three main building blocks. There's a first block where you convert your input into syngas, that's CO and hydrogen. Generally, you'd call that the syngas generation block. Then there's the actual Fischer-Tropsch block.

which converts CO and hydrogen into hydrocarbons. And those hydrocarbons are basically just carbon in a cane with hydrocarbons around. And that's a kind of mix of all kinds of different lengths of hydrocarbons. And the hydrocarbons are what are called normal paraffins. And so you need to do a little bit of further processing. You've got to chop some of them up to make them the right length and do a process called isomerization that branches them. And that gets you to your finished product.

Conor Madigan (09:37.39)
your jet fuel, diesel fuel. So that third step is what's called upgrading. So where we come in to help drive innovation is that we had a recognition when we looked at the market, when we were setting up the company in 2022, that the Fisher Trope Block had been the focus of a lot of really good innovation in the industry over the previous couple of decades. And there are now today,

multiple good companies building fissure troves technology suitable for that scale of plant that I described, that sort of one to 5,000 barrel per day scale. But there hadn't been a lot of innovation on the syngas generation and upgrading steps. And so that is where we focused our innovation. And so what we found is with some new catalysts and some new equipment designs, we were able to drastically cut the equipment cost for those two sections by concentrating

what was multiple steps into fewer steps. the overall result of that is to cut the capex of a plant by about 50%. And so that on its own is already a big step forward. The way we boost yield is that the first step in that process where you make syngas, that step requires heat input. And traditionally, that would have been done by burning fuel to make heat.

in what would be called a fired reactor. And we use electricity to drive the heat into the reaction, basically by running electricity through a heating element that just gets hot and transmits that heat into the reaction. And the advantage of that process is that we don't burn fuel and produce an emission. So all of our input stream and any of our recycled material all just stays in the process. None of it's diverted as a fuel.

And so it means that we can maximize the amount of carbon that we get out in our finished product relative to what we put in. And if you compare an electrified system versus a fired system, you can boost the output by about 20%. And so that combination, very powerful for being able to drive down the cost of the product. On the back end, the innovation that allows us to improve things is driven by eliminating separations from the stream.

Conor Madigan (12:00.126)
And so that the process intensification where we said earlier, we reduce equipment is realized by some special catalysts that allow us to basically take the raw output of the Fischer-Tropsch reactor without any separations or cleanup and run it straight through the upgrading reactor. And all together, those innovations are really just about how do I make the plant as simple as possible so that I have fewer steps, fewer pieces of equipment.

and as efficient as possible. And we integrate our innovations in that front and back end with the best of the commercial Fisher-Tropsch technology that's already out there. And that package is what we call Ather Aurora. That is our brand name for our unique solution, which, as I mentioned earlier, we believe will give us the lowest production costs and highest yield. And the last point

I mentioned in the introduction that's very important is that this approach is particularly flexible. So we can apply it to a CO2 and hydrogen plant, which some people refer to as e-fuel if the hydrogen comes from electrolysis. We have very efficient design for e-fuels, but we can just as easily take biogas, which is CO2 and methane, as an input to our plant. We can take the off-gas from

refineries or other industrial facilities that currently might be either flared or just burned to make heat. As those industries switch to more sustainable energy sources, they are still producing those wastes, which will eventually get stranded. And then we can go use those to make more sustainable fuel. And lastly, we can work with the gasified output.

of various types of waste streams like wood waste and agricultural waste. And so this sort of very flexible kind of Swiss Army knife solution in the middle that we have allows us to work with almost every type of waste stream, get deployed in almost any geography, and just bring down the cost of that production.

Silas Mähner (14:13.422)
Got it. So a couple of follow-ups. So number one is you're saying that the objective here is to actually build the very large output systems, right? You're not looking at that one to five thousand barrels a day.

No, we are. So we're still doing one to five thousand barrels per day, but we're solving the CAPEX challenge by greatly simplifying the plant design. And in many ways, what we're doing is we're optimizing it for that scale. And the Fisher Troche companies that I mentioned, they figured out over a number of years how to optimize for that scale. And we're now applying

innovations that are optimizing the first and third steps, the Syngas generation and upgrading steps for that scale so that we can recover a high capex efficiency, which was lost when we attempted to just use sort of conventional technology and designs and to kind of use them at these small scales.

Now, does every facility have to be optimized for a certain type of input? Because you can take in many types of waste input, it sounds like. But would that be each plant is going to be optimized for a different type of input? Or can you kind of mix a bunch of these things together?

You can definitely mix multiple streams at a given site. Usually, you would not be able to perfectly optimize a plant to be dynamically changing the feeds. And so it would be no problem, for example, to design a plant that could use part of its feed as, say, wood waste, and another part of its feed is biogas. You could design such a plant. But you would generally want to keep using those feeds.

Conor Madigan (15:56.748)
you could certainly design in an ability to flex, maybe it starts off at 60 % wood waste and 40 % of your input comes from biogas, but you designed it to be able to flex between 30, 70, and flip back around to 70, 30, something like that. So it does have that flexibility because the same catalysts and equipment are used for all of the different feeds.

you would size the equipment a little differently depending on which feeds you were using.

No, I think that's fascinating because that way you can just find the place that has abundant feedstock, right? So you can optimize for whatever that is, but I'm assuming, depending on what industrial production is going on nearby, you can just build it correctly, right? Build it to size, if you will.

This is actually one of the critical, I think, sort of learnings about dealing with waste, is that because it's sort of inherently not grown or manufactured as the primary output, you a lot of times just have what you have. And so that flexibility is really just sort of an essential feature. If you can only process one waste stream very narrowly,

then it's just inherently gonna be a drag on your scalability.

Silas Mähner (17:18.798)
Yeah, I'm very curious. How did you guys come up with this innovation? Because it sounds like if I'm not mistaken, there's a couple of core blocks here. And for some reason, everybody was focused on one area of it. Whereas you just looked at the process and said, OK, what about these other areas? Can those be optimized and innovated in? How did you go about that? Or did you guys take this out of some university? Like, how did this work?

Yeah, so the core technology was found after we had developed our business thesis. So the company had kind of an interesting arc. I'm a repeat founder and in my first company, I came to believe that the number one most important thing in sort of building a startup is you have to establish a really compelling business problem with a deep and sort of fundamental customer need.

That's really what we focused on first when setting up the company. So that's how we focused in on aviation and ocean shipping and coming up with drop in fuels and we knew what we wanted to do. And then we looked around for the best technical solutions we could find. And that technology was ultimately came from a really amazing research Institute here in the Chicago area by the name of GTI Energy. More than 80 year history, being an innovator in

originally the natural gas industry and then more recently as a great innovator in energy transition. And they had been developing a set of technology as part of a gas to liquids program that they started doing in 2016 with DOE funding. And we got to know them starting in late 2021. And then

got into some more serious business discussions in 2022 once we saw that what they had we felt was a good fit for what we wanted and was at the right maturity level for a company to kind of spin it out and take it forward. And that idea of broad flexibility was something that we could see that technology could deliver. And the real sort of critical sort of thesis for us was

Conor Madigan (19:31.404)
that the industry had focused for a number of years almost exclusively on CO2 and hydrogen as the way to make these fuels. And we still believe CO2 and hydrogen long-term is critically important. But what we felt was that the hydrogen prices at that time were being projected to come down very fast. And we just didn't believe that that would be true, which at the time was an unpopular view. There were a lot of folks who were.

Absolutely convinced and full, very invested in hydrogen prices coming down quickly. Now, yeah, everybody agrees and it's just sort of like that's a mainstream view. But at the time it was contrarian. so that really drove us to think about, can we come up with a solution that is perfectly optimized for CO2 and hydrogen, but also works great with other feedstocks that are available now? And when we saw the technology at TTI,

So unpopular now.

Conor Madigan (20:27.278)
We saw something that was really interesting in bringing costs down, but also had this feature of being very well suited to these other feedstocks.

Nice, now that's really cool. I just find it interesting how people can decide where to focus the innovation on because, you in your case, you were able to find something that existed, but I'm assuming if you had not found some existing technology, you guys probably would have went to work trying to do R &D to identify those areas. Is that accurate?

Yes, but I will also say that when I set out to build this company, so I was coming in as sort of the business executive interested in doing something in climate, but without like a specific objective that, it has to be this one particular thing. I was basically looking for the business that would be a good fit. And so I was looking at multiple different business problems, searching for technology at the same time. And I think in our case, we were really looking for

the combination of a technology at the right stage, matching up with a really compelling business problem. So if we hadn't found the technology, we might have picked one of the other routes to focus the business on. But in this case, we were able to find the thing that we were looking for. And so when I tell the story this way, it just sounds like it was this straight line where I said I was going to build a company in this space, and then I went and got the technology. But really, hearing the result of a funnel that this is where everything came together.

Now, we've had a couple other guests who did something kind of in a related fashion to this. And I do find it quite fascinating because it's often the case that there are technologies out there that solve some of these problems if you can figure out the business case properly at the beginning and then just kind of do the research to find the technology. And a lot of these people, they just develop technology. They don't even necessarily know how valuable it is because they're just playing around in lab, which is good. We need these people, right? So it just may be some encouragement for other people out there who are...

Silas Mähner (22:17.634)
commercially minded and think, Hey, I'm not a scientist. am I going to, you know, how am going to start a climate tech company? But you're, you're proof of that right now. So, you know, let's go back a little bit more on, your background. you know, can you, can you talk about where you came from before this? What were you doing before? And then how did you have the conviction to specifically work in, in, in this space? In climate.

Yeah, happy to. So my background is originally technical. So I have a PhD in electrical engineering from MIT. And I was mostly like a physics person in school. And my first company was the sort of traditional startup route where I had a technology that I worked on in my lab. I got to the end of my degree. I was interested in spinning out a company. And so my advisor and I

sort of brainstormed like which we thought was going to be the most interesting technologies and then basically launched the business technology first. We had an idea of how it was going to be used. But honestly, we did not do much deep thinking about was this really a great business problem. In the end, it worked out as being a pretty interesting company to build. So what we were doing was making manufacturing equipment for the OLED display industry and

We launched the company in 2008, which was before OLEDs were really a commercial thing. And so we had sort of a conviction that they would be the display technology of the future. And we had identified what we felt was going to be a really challenging manufacturing step that needed this sort of new innovation, new process, new equipment. So over the 12 years I was at that company, we successfully took this technology from basically a chemistry fume hood experiment where we were

in effect, trying to do inkjet printing as a technique for doing precision deposition of coatings, because something companies have been trying to do for like decades, but not successfully doing. But we felt we had like some unique ideas on how to do it. And then over seven years, we were able to get that technology matured into a machine that we got accepted in Samsung's manufacturing lines. And we were in the

Conor Madigan (24:30.05)
very first display, a production that Samsung did of these OLED displays on plastic substrates, which is basically what almost all of them are now. And since then, the technology has been sort of widely adopted as the main technology for one of the critical manufacturing steps. And I had a chance to, over that period of time, raise a few hundred million dollars in venture capital funding. So I got to see all the different stages of fundraising.

We sold more than a billion dollars of machines over that period of time, and many of them are in the leading OLED production fabs all around the world. And in 2022, I had, sorry, 2020, I had an opportunity to hand off the reins to the current executive team and step away so that I could basically do it again. But this time I wanted to do it again in an area where

the work itself had more measurable, beneficial impact on society. OLED displays are great. I think they've made people's viewing experiences better all over the world, and batteries last longer because of them, and devices are lighter, so that's great. But I really felt like I could use my experience and do something a little bit more meaningful, and climate was sort of at the top of my list. And I like doing big pieces of hardware.

I had a chance to do that at my last company and there aren't a lot of people that like to do that or have experience doing it. And so I sort of thought to myself, know, climate has a lot of big infrastructure challenges. You need to do big complicated pieces of hardware. I want to find a problem that fits that sort of mold so I could use what I've learned and then assemble a team because I did feel like one of the things I got good at at my last company was

attracting the right talent and putting them together in teams that could be really effective. And so I didn't worry too much about not being a technical domain expert. I figured I could learn what I needed to learn to be a passable expert. And then that I would have a good eye for assembling the right team. And the last ingredient for making Aether Fuels successful was having the

Conor Madigan (26:52.318)
the fortune of connecting up with a really fantastic investor to incubate the company with. So I ultimately launched the company with a fund called Zora Innovation, which is part of Tomasic, the large Singapore investment platform. It's about a Singapore-based investment platform. It's about $300 billion under management. And the chief investment officer there, Phil Inagaki,

He and I really bonded and got really excited about the idea of launching a company in the sustainable fuel space and working together with the Tomasic family has been really powerful there. Very well connected, very patient, have a lot of capital and that's been very helpful for building the company.

Yeah, their model has been very interesting and I think they do have a big focus on the kind of sustainable fuels industry if I'm not mistaken. But what I do want to know is I don't know if you shared the dates exactly but from when you left your last company, said 2020 I think, right? Yeah. So when you kind of landed on the specific idea that you were going to work on, how long did that take you? What was that time?

Yeah, so also to put it in context, so I didn't realize that I was going to be doing this in the middle of COVID. So it ended up being in some ways a fine time to be sort of doing a lot of sort of reflection and thinking and brainstorming. But it was ultimately about a year, give or take, to think of different ideas and sort of beat them around, talk to friends and colleagues and come up with a really strong short list. And it ended up being about three or four sort of finalist ideas.

that I did a more intense study in for about six to nine months to get to this one. And we really knew that this was gonna be the one towards the end of 2021. And so we focused all the energy there. I would say, like I put aside all the other climate ideas and this was the one climate idea I focused on for about four or five months to finally get to the point where we would launch the company. And during that time,

Conor Madigan (28:57.526)
I did also look at other industries. So I was also interested in healthcare and in AI, but climate is always one of the thrusts. And so I'm happy that this is the one that worked out because it's been really satisfying to be in this space. One of the really fun things is you meet a lot of other folks who are very talented, but also feel strongly about doing something that matters to society. And it's kind of inspiring for me to be around

that kind of passion.

Yeah. Now that's interesting. How did you, so you, I think you said your last company is what? 13 years you worked on it? Yes. So you worked on something for 13 years, great commitment to something long-term. And then you go through this phase of, you know, really exploring and kicking ideas around. How do you turn off of that? And then like go back to, Hey, I got to stay focused on this for the long-term because I think a founder's dilemma, obviously this wasn't, this isn't your first go round, but a founder's dilemma tends to be like they chase shiny objects and they want to kind of look at the new thing. So how do you.

How do you switch so efficiently it appears from being focused to exploring and then being back focused again?

Yeah, I mean, I think what helps me is that my natural instinct is to be an implementer more than the sort of brainstormer. So I can do the brainstorming task, but really what I want to do is I want a big problem to just go work on it, solve. And so for me, it was almost that the harder part was the part where I was brainstorming the ideas and looking at all the cool, shiny new objects because I kept being a little bit impatient.

Conor Madigan (30:32.344)
that I was like, OK, let's pick one. And so we can go build it. So for me, actually, that was actually the easy transition. But what was helpful for me was bouncing my ideas off of colleagues and friends who I learned to trust over the years so that they helped me make sure the idea that I picked was a really good one in the end.

Yeah, no, that's interesting. Yeah, I don't know that we've had a lot of people who had that natural tendency. You should see the other way around. It's a little more challenging to stay focused. At least that's personally how it is for me, right? There's always too many things to chase. You you talked earlier about how you had very high confidence you could surround yourself with a good team. Hey guys, Silas here. Welcome to the Talent Tidbit part of the show, sponsored by Earth Tech Talent. Connor is about to drop a bunch of gems when it comes to hiring and team building wisdom. If you're a founder in the hiring process,

please get out your notepad because this is top tier advice that only comes with years of experience hiring and running teams. All right, let's get into it. So I want to talk a little bit about team building. how can you walk us through how you, okay, once you found the technology, how did you go about building that team? Kind of go step by step for all the core people who you brought in. Where'd you find them? How'd you go about that?

Yeah, so I mean, I think I had a couple of sort of philosophical views that I'd formed on my previous company. So the first is that my kind of basic formula for, you know, what kind of profile of leadership team I wanted is I, of course, on the one hand, I want very high talent people, people who are exceptional in their space, but that are also low ego. And for me that

sort of if you can find that combination, then you can assemble a team with sort of not worrying so much about how are these people gonna work together. The bigger the ego is, the more you have to watch out for like, do these particular sets of egos fit together? And so I found, you know, that by really emphasizing that characteristic from the early on, I've had good success. The second is that I do have a general philosophy of trying to create

Conor Madigan (32:42.542)
constructive sort of tension inside of an organization by pairing together sort of certain personality traits. And so I generally try to bring in people on an R &D side who tend to be more fundamentally optimistic. So their like sort of baseline answer is yes, and only if they're totally convinced they can't do something, then they say no. And then on the engineering side where it's sort of the people who now need to take the R &D aisle,

ideas and build a big machine that for those folks, try to make them sort of fundamentally a bit more pessimistic, where their sort of default answer is no, unless they're absolutely sure they could go build it. And then sort of keep open mindedness on both sides, but put those sorts of characteristics together. And so with that in mind, we did set out to go hire really strong head of R &D, really strong head of engineering and

you know, we were able to get those characteristics and put them together. Now, in terms of actually finding the people, I just used a really good recruiter. I, I, over the years have gotten to know a few different recruiters who just really run an exceptionally good process. And, the folks that I use for kind of senior hires, they've just done a really good job. They're very good at, walking through a smart process to define the roles and.

They have some specialty in materials and climate. And so they know all the companies and have a good network. I would say at the very beginning, until you've built a big network of your own, or if you're not coming over from the same space and you have kind of a built-in team, it's pretty invaluable to have a top notch recruiter.

So this is really fascinating. think a lot of founders could benefit here, benefit to hear from that. Obviously I'm a little biased because I am recruiter, but I am curious. Did you, when you talked about these kind of building a team where there's two different sides of the coin effectively, was it that you had to find the people who understood that, or did you have to kind of communicate once you come in, this is how we're doing it. And we want to have completely opposed kind of natural tendencies, but we need you to have open minds together.

Silas Mähner (35:04.972)
How did you go about that process or was it just natural to those folks that you found?

Yeah, I mean, I, it was part of actually the job description is that like on the recruiting team and in my own interviews and with folks, I would tell them like, we're looking for somebody who has this sort of mindset that this is their natural tendency. And so when we put these folks together, I would say that the, the, the tension is sort of there by kind of natural, sort of instinct.

And the open-mindedness is also part of the search process. So you try to see what kind of projects they've worked on in the past and sort of probe people on how comfortable they are with sort of structure and uncertainty. And you kind of try to put them in a spectrum. Since you come from recruiting, you know that you can only learn so much in a bunch of sort of 40-minute

you know, sessions. And so it's an imperfect process. so you can put together people with instincts, but there's still management to do. You've still got to make sure people understand their roles. You understand why their role is the way it is. You sort of teach people to kind of have permission to be the way that they sort of want to be, but also know what their roles are. So all that's still important. But we did it mostly by trying to recruit the right people.

Yeah.

Conor Madigan (36:37.378)
When the company is small, there's only so much you can do with just process. The company culture really mirrors the way that the leadership team behaves and interacts.

Yeah, that's interesting. this framework, this is one framework I think that is very helpful. I really appreciate you sharing that. Are there any other frameworks for different teams where you say, we actually, we don't follow the same thing where it's, you know, we want two opposites. We want something else. Are there any other structures that you've learned? Because you obviously built a successful company before and you're working at it again.

Yeah, I mean, I would say that there are versions to some extent versions of the same thing in other parts of the organization. Like you by design want your finance team to be more pessimistic. You want your like BD team to be like the more kind of optimistic, innovative personality. And I would say the only other thing I would say that's just universal is that I have become a big believer that

at least at the leadership level, sort of clear thinking and clear sort of reasoning. It sort of is not something you can sort of compromise on. And so even if you can bring in somebody very, very charismatic, but if you sort of drill down to their sort of internal thought processes, if they're not like crisp and clear, that at least for a small company, you

have to make decisions so often and the decisions need to be sort of well reasoned and thought out without a lot of supporting process and iterations and sort of consensus building or it becomes too slow. So you need everybody to be really, really good at that sort of clear, rational, kind of data-driven thinking or you start to get kind of a chaotic organization. so that

Conor Madigan (38:33.256)
sort of applies to everybody. So whether they're more pessimistic, more optimistic, more innovative, more structured, like all of them were definitely probing, like asking them, trying to ask them questions about how they made decisions in the past and sort of biasing towards the folks who seem to be very sort of organized and thoughtful about, okay, I like I made this decision for this reason. And I sort of naturally want to gather data and

make decisions where I wasn't sort of unconsciously, you know, just going with where my gut took me, but, really thoughtfully choosing a direction. I guess the other thing I'll say is just that the, the, the last caution for team building is that you have to be careful, to when you bring in senior folks at the early stage of a company to make sure that they are still folks who know how to be, a player coach because.

Small organizations at the beginning generally can't afford to have fewer managers that like are prepared to do some of the work themselves. And that is a particular challenge when you're recruiting from big companies. And so, you know, successful folks may have been the player in the early stages of their career, but but in a bigger company, there's just more infrastructure and you get away from needing to really do too much directly yourself. And there's nothing wrong with that. It just means that

You have to be aware of the extra risk you might be taking when you try to transport somebody like that back into an organization where they're like, you're going to do your own calendar and you're going to have to make your own presentations. some people can do that transition. Some people really struggle with that shift. And so that's definitely something to be mindful of.

Yeah, I just really appreciate it. think the underlying thing to me of what's really good here is that you have very clear expectations at the beginning, which is something not a lot of first time founders tend to have because they haven't been through the ringer. So they can kind of try to at least visualize what they might run into through listening to your advice here and do the same for themselves. know, maybe one more thing I'd like to ask is, you know, in the early days, especially if there is a lot of change, how do you manage...

Silas Mähner (40:44.384)
ensuring that everybody has been communicated to the different changes. Cause I've seen a lot of times where founders, they're very clear about what's going on in their head, but they forget that they have to, you know, communicate it to everybody else.

Yeah, we do a system where this is not, you know, groundbreaking, we, at the early stages of the company, which we're still doing now, even with 25, 30 people, every week there is a weekly meeting that's the entire company for an hour. And we run through all the different divisions, like doing their rapid fire updates. But I...

Like part of my job at the end of every one of those is to let people know what are what's the big picture? Like what what has changed or not changed in the big picture? Why is this or that work stream like right now the most high priority one and and why? Or what should say what work stream is the high priority one now and why? For that specific reason and I have heard

founders be like, but you you don't necessarily want your team to know everything that's going on. Like maybe they can't process it or so. And what I'll say about that is you absolutely need to be thoughtful about how you're communicating what's going on. So you can't just, you know, like share with no context. but it's usually worse if things are starting to go off track and you're not saying anything about it because these organizations at these sizes typically kind of naturally

know something is off, but you're just not saying anything about it and it's creating even more sort of distress and uncertainty. So staying on top of like, if you are starting to feel like, this is not on track anymore, then your team probably knows this, at least unconsciously. And so I'm kind of forcing yourself to make sure that you're thinking about, like, what is the known problem and like,

Conor Madigan (42:44.216)
getting in front of telling people like either I have this solution, this is how we're tackling it, or we know this is a problem, the leadership team is on coming up with a solution so that people don't think it's just sort of a, you know, that the leadership team is unaware.

I mean, this is super valuable. You sound like somebody who's got a lot of scars because nobody seems to know these things, right? If things are going badly, they just try to focus on, know, high energy and just ignoring the problems as if their team won't notice, right? And their team always notices. And as a recruiter, you know when their team notices because they all start giving you calls.

Yeah, well, and sometimes like, that there's a, you can get used to the idea in as a CEO that like, you know, who has the right ideas for a certain problem. And you're like, I don't need to tell everybody about this because I know that it's these three people who can help solve this problem. And that is usually true that you are right on who's going to solve the problem. But it's often enough that somebody in your team has

a bright idea that is not the person you thought would have the interesting idea that there's also just value on its own in terms of the problem solving to be willing to share kind of what are the challenges and invite people to weigh in. And you have to be actually prepared to answer questions and tackle them even when sometimes the suggestions might not make sense, but you still have to be constructive. yeah, it's like, it's not just about

getting your team comfortable, but you really honestly don't know where the good idea might come from. If you hired a bunch of really smart people, then they all can contribute.

Silas Mähner (44:22.124)
Yeah, that's a really good point too, actually. All right, I hope you guys found that valuable. To recap, have a very clear vision of the role that you're hiring for and also the dynamic of the team that you want to create and to have. Create constructive tension in how you construct your teams. As he mentioned, you want optimistic and pessimistic people, but with an open mind to each other. So that way you have this kind of push and pull or stop and go within the team that creates a really, really healthy environment.

Another one is find people with high talent but low ego. Another one, as an executive team, ensure that you embody the principles you want others to follow because especially when the team is small, the culture is basically emulating whatever you are. So you are the default culture as the founder or as the executives. Another one, when hiring senior people, make sure they are able to be a player coach. Often when you're hiring from big organizations, this is much harder to find. So be very, very intentional about it. Another one.

ensure all executive hires have clear reasoning and the ability to communicate that to the team. It needs to be clear what they're thinking and why they're thinking it. And then finally, he said, especially in the early days of your company, utilize a search firm that has built out network in that particular space that you're working in. And that can, that this company can also run a thorough recruitment process is very important because you need to be able to view all of the people in the process and really kind of understand how they compare to others.

and then meet all again all these criteria. Can they be player coaches? Are they optimistic or pessimistic? Do they have an open mindset? Do they have low ego? All of these things come into play when you're trying to run a thorough recruitment process. And if you are in that phase of building your team, reach out to me and my team at Earth Tech Talent. Our specialty is placing tough to find US based talent at clean tech startups. And the best part is we charge about half of what other search firms do. To get in touch, you can find me on LinkedIn or go to earthtechtalent.com.

forward slash contact. That's earth r t h tech talent.com forward slash contact. All right. Enjoy the rest of the show. So let's, let's talk about the policy trends and just kind of the market in general. Where do you see the staff industry growing right now? Like what are the core things driving interest in this space? Is it still going really strong? Because I think that, you know, we're in the U S and there's a lot of mixed feelings about the climate tech and clean tech market here, but I'm

Silas Mähner (46:44.056)
Pretty sure there's a lot of different mentality in Europe. So do you have any kind of core things that you think are driving the conversation and the demand on both sides?

Yeah, I would say so for sure before or I should say last year, it was true that the biggest projected growth in sustainable fuels was expected to be kind of global outside the US. In fact, like in Europe, the UK, that is still true now. I would say that some of the policies that are sort of in place right now are likely to focus the

sort of US energy transition on more on carbon capture sequestration as the sort of core technology pathway. There's going to be less adoption in the US for a period of time on the utilization routes, which is sort of more where we fit in. But biofuels are still strong. And so there was good support continued in the US policy for biofuels.

Broadly speaking though, that there are just more and more mandates being implemented all around the world. Europe and Asia are particularly strong in this area. And so that's really what's driving demand. And I think one thing that sort of, you know, as folks sort of digest the impacts of the recent legislation in the US, I think it is important to remember that the US still is a technology powerhouse.

in energy transition. There's still a tremendous amount of innovation happening here. And there are areas, pockets, where the policy is still quite supportive. And we do expect the policies to kind of be, in general, up and down. And so we have a global approach. So our business is not particularly impacted by the policies in any one particular country. And we

Conor Madigan (48:46.188)
I would say the one area that did get definitely kind of the most challenge is green hydrogen. So there were some supports for green hydrogen that have been, are gonna be sunset earlier. And so that actually just reinforces our strategy, like we mentioned at the beginning, that by having a technology that's flexible to use different types of feedstocks, we can make sure that we're

limiting our risk exposures to the policies that might impact any particular one of them, like in that case, a CO2 and green hydrogen route.

Interesting so so generally speaking, you know policy is driving a lot of the demand. Are you guys? I didn't ask you about this at the business business model section, but are you is your product? Do you foresee it getting to cost parity or cheaper than current aviation fuels?

So, yeah, just a quick note on our business model. So at this stage, we are a technology developer and a project developer. So we are aiming to bring our technology to full commercial maturity and build the first plants with that technology. So we'll be a fuel producer. Down the road, we do anticipate then

also adding a licensing business. But that said, we are very focused on that question that you just asked around. So what's the price of the product that we would, or cost of our production process? And let me first talk about price of the product. So today, the main incumbent product is the HEPA, the basically used cooking oil that's been turned into jet fuel and diesel fuel. And our

Conor Madigan (50:32.138)
expectation is that our first projects, we will be able to make the product at or below price parity with the current HEPA-based sustainable fuels. And so then the question is, what happens long term? So we optimize our technology more, we build more plants, we get more scale, how low can the price get? So this depends on the feedstock route. So if we're using industrial off gases,

This is probably the most cost effective route in our portfolio. There is absolutely the potential to get those to be at cost parity with fossil fuels. But in truth, we don't believe that that actually recognizes the full value of the product because the value of the product is providing the fossil energy, but also the value of the CO2 abatement. And at the moment, nobody knows exactly what that's going to be worth long term.

because we can get the product price down to a pretty low level, we believe that in that marketplace, we can be consistently the lowest cost producer. And so that makes sure that our plants will always be ones that are making money. Now, I would- Sorry, just a-

When you say in the marketplace, you're talking about in the fuel marketplace broadly or in the clean fuel marketplace because they want the abatement. Because if you're getting, you know, they're getting the credits for having cleaner fuel.

that yeah, that's so so so maybe our first focus has been on the sustainable fuels market and I actually breezed by this but just to give some sense of scale so the the aviation and ocean shipping fuel market in 2050 is expected to be about a trillion dollars and even if you only believe 10 adoption of sustainable fuels still a hundred billion dollar a year market. So our goal is to enable complete

Conor Madigan (52:27.31)
decarbonization of those industries. But from the standpoint of building the business market opportunity, there's just a huge market opportunity focusing entirely on whatever portion of the market is mandated. But we have these routes that we are focused on, such as the industrial off gases that can get to fossil parity. And so I don't want to say it's not possible to get there. But there's that's not

the first target for us. The first target for us is to build the most cost effective, most profitable plants that service this very large mandated marketplace.

Yeah. And the last thing I want to ask you is if we were to get to the point where, again, it's like, it's even cheaper than fossil fuels to produce these fuels cleanly, what do you think needs to happen to get to that point? Is it just scale or is there going to be more innovation required?

Yeah, so we transform some feedstocks into the fuels. So no matter how good our process is, we are still subject to cost of electricity as one of our inputs and the cost of the feedstocks as our inputs. So as the grid gets cleaner, if we can get global grids that look like, the grid in Brazil where it's

90 plus percent renewables and you can get industrial power contracts at 30 to 40 cents, sorry, 30 to $40 per megawatt hour. That is a really good place to be and those kinds of prices can enable us to get to those really low production prices. And then on the feedstock side, I think the critical variable is bringing the cost of hydrogen down.

Conor Madigan (54:18.414)
So we have a lot of roots that don't use hydrogen. But eventually, we're going to want to be able to use hydrogen as one of the inputs to really get to big, big scale. Unlock, for instance, CO2 and hydrogen roots. right now, hydrogen cost is like, in a good plant, might be $5 per kilogram for clean hydrogen. And so if we can get down to much lower costs, like below $2,

Some people believe that if we have geologic hydrogen one day, maybe it's $1. Those are the kind of prices where you can start talking about cost parity or such as being so close that the cost impact for the consumer is sort of negligible.

Yeah, that's quite, if it does get to that point, then why not go for the clean version, right? I'm sure there's a lot of other things we could talk about. We're out of time now, unfortunately. You've got so much wisdom you've shared today. I really appreciate you doing this, but is there any final call to action that you'd offer people or where people should reach out? Any partners you guys are looking for, et cetera?

Yeah, I mean, we are, I would say, keep an eye out for some announcements in the September, October timeframe. That's kind of the big next piece of news. And, you know, check out our webpage, atherfuels.com, or look up our LinkedIn, where we are posting about what we're doing, but also trying to repost the interesting work that some of our peers are doing.

Awesome, man. Well, thanks so much for coming on. This has been a pleasure. Looking forward to having you again on In the Future.

Conor Madigan (55:54.656)
Awesome, yeah, it was a lot of fun. Thanks.

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