Goodtrepreneur
Goodtrepreneur is the podcast about good people with good ideas for a better world. In it we explore the world of 'good ideas' and why some succeed, and some do not. Guests include the creators of brands, nonprofits, communities and more whose core purpose is to help solve an environmental or social problem.
Goodtrepreneur is a must-listen for anyone thinking of starting a purpose-led organisation or simply wanting to enjoy some good news in the world of world-changing ideas.
Goodtrepreneur
Fashion Made of Food. How Alt.Leather's Tina Funder is turning waste into the world's first fully functional plant-based leather. Episode 4.
Chances are you’ve owned a pair of leather shoes, but have you ever stopped to consider their—excuse the pun—footprint?
As we all know, leather comes from cows and cows contribute to climate change through their burps and farts and the deforestation that often occurs to give them land to live on.
If that’s not enough, the tanning process causes damage too, using chemicals with nasty names like chromium and aldehyde which, in many parts of the world end up in the soil and rivers, which then leach into the food system and yes, into us.
Alt.Leather founder Tina Funder is on a mission to change all this by creating a whole new kind of leather from nothing but plant materials.
In this episode she gives us the inside story on:
👜 How a humble handbag brand sparked the idea for a whole new material
🔬 The deep-tech innovation process, from tubs in the garage to a fully functional scientific lab
🤝 Why finding your customers before you even have the product is a great way of creating product-market fit
😬 How putting yourself out there before you feel ready is a great way to speed up the process
💰 Three things to look for in an investor
👶 The importance of finding time for family in a world of infinite to-do lists
Want to know more? Here's what AI had to say after we gave it a listen...
What if the leather in your shoes, handbags, and car seats could be made without harming animals or the planet? Tina Funder, founder of Alt Leather, has created exactly that – a 100% plant-based leather alternative that's turning heads from Australian retailers to Paris Fashion Week.
The journey began when Tina discovered the dark side of both traditional and "vegan" leather options. Animal agriculture contributes 14.5% of global emissions while occupying over half the Earth's land surface. The tanning process uses toxic chemicals that poison waterways and harm workers. Meanwhile, so-called "vegan leathers" are typically just petroleum-based plastics with clever marketing. Searching for genuine solutions, Tina began experimenting in a garage with a leather application specialist, creating prototypes that initially "looked like scrambled eggs."
After relocating to CoLab (the "WeWork of biotech") and eventually Monash University, the Alt Leather team developed a revolutionary material incorporating wine industry waste. Their vision extends beyond simply replacing leather – they aim to transform manufacturing itself. While animal hides have irregular shapes causing up to 60% cutting floor waste, Alt Leather will be produced in continuous rolls and eventually molded directly into product shapes, eliminating waste entirely.
The business has gained powerful supporters, including Tesla chair Robin Denham's family office and $1.15 million in government funding. Alt Leather recently debuted at Paris Fashion Week, signed its first commercial partnership with a luxury winemaker, and is preparing for a seed funding round to build their pilot manufacturing facility.
Curious about sustainable fashion's future? Follow Alt Leather's remarkable story at alt-leather.com or @alt.leather_ on Instagram. Within a year, you might be walking in shoes that look and feel like premium leather – but leave a dramatically smaller footprint on our planet.
Goodtrepreneur is the podcast about good people with good ideas for a better world.
Please 👀 follow, 👂listen, 🌟 rate and share 📢 to help spread the word and deliver on our mission to inspire and enable more people to create more world changing ideas - and succeed - more often.
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I'm gonna change this world today. Make those bad things go away.
Ben:Hey, just talk
Tina:Hello, hello, we're ready,
Ben:We're ready.
Ben:Chances are, like most of us, you've owned a pair of leather shoes, but have you ever stopped to consider their— excuse the pun— footprint? As we all know, leather comes from cows, and cows contribute to climate change through their burps and farts and the deforestation that often occurs to give them land to live on. If that's not enough, the tanning process causes damage too, using chemicals with nasty names like chromium and aldehyde, which, in many parts of the world, end up in the soil and rivers, which then leach into the food system and, yes, into us. In the past few decades, vegan leather has marketed itself as a positive alternative, but let's be honest, it's just PVC plastic dressed up in another name. So if we want a genuine answer to the problem, we need something that looks like leather, feels like leather, but is made from something better. Fortunately, Tina Funder from Alt Leather is on the case. Her plant-based alternative is so impressive, it's attracted funding from everyone, from the Australian government to the chair of Tesla, and she's here to tell us all about it. Welcome, Tina.
Tina:Thanks, Ben, thanks for having me.
Ben:So what is the problem with leather and of all the problems in the world? Why did you choose this one?
Tina:So, look, we can go down many a rabbit hole with this one. But if we think about animal agriculture in general, it contributes to about 14.5% of global emissions and over 50% of the earth's land surface area is occupied by cattle grazing systems, which contributes quite heavily to deforestation, so it's hugely environmentally impactful. But the tanning process of traditional animal leather is also very heavy on heavy metals, aldehydes, chromium and noxious chemicals, and it uses a hell of a lot of water, and so often that water in developing countries, particularly where the majority of leather is produced, flows out untreated as effluent into environmental, into the surrounds, and so then has a knock-on effect socially, so the communities who are living around those tanning areas greatly affected, but also socially, with the tanning workers themselves. Their health is affected, and then any other alternatives that are available on the market are made from fossil fuels, so they're made from either PU or PVC, so they come with a whole other list of negative environmental impacts.
Ben:These are the things known as vegan leather.
Tina:Yeah, vegan leather, and we try to avoid calling our product vegan leather because we don't use any petrochemical plastics in our material at all.
Ben:Yeah, so you found out about this problem and decided to do something about it. Tell me, how did that happen? At what point does one make the decision of all the people in the world? I'm going to be the one that helps solve this.
Tina:Yeah, so I actually read about some cactus and apple leathers that were being made out of Mexico and Italy reading about them through industry news, because my background is in advertising and that's how I then learned about the negative impact of the leather industry, and before that I had no idea. You know, leather's ubiquitous. We pull on our leather shoes, we get in our car and it's potentially got leather seats. It's all around us and I just hadn't given it a second thought. And when I read about it I felt compelled to do something about it, and so I decided to start a handbag label called Life on Mars, using the cactus and apple leather to make handbags.
Tina:I also was in need of a bum bag at the time, so killed two birds with one stone. But I searched all over the world to find design and an ethical manufacturer and then launch this brand. And then, just after launching the brand, realised that those materials were actually just plastic or PU or PVC synthetics with a bit of filler in them, so majority of them was plastic, and then they had a little bit of cactus or apple in it, and even though I still strongly believe that they are a step in the right direction, it felt like I was replacing one problem with another, and so I then searched all over the world to see if I could find a 100% bio-based alternative, and I couldn't find one that was readily available, commercially available, and so I decided to start researching whether it was possible, and I think I was also driven by the fact that Australia's got such great research institutions and also a very rich agricultural landscape, and so I thought let's try and tap into that and see if we can develop it ourselves here.
Ben:Right. So basically, you set out to make handbags and realized the supply chain for the material you wanted wasn't there, so you were going to have to build a supply chain.
Tina:Yeah, I didn't feel comfortable with any of the materials that were on the market, using them on my own brand, and so I felt that I identified a gap, I suppose because I could say that the automotive industry and a lot of the major luxury fashion brands were starting to move in this direction, and so there seemed to be appetite there, but no readily available solution.
Ben:Great. So you thought I'm going to make a product out of 100% plant-based materials.
Tina:Yes.
Ben:And this sounds great, you go. Okay, easy, I'll just pick up the phone, right?
Tina:Well, actually that's what I did. I picked up the phone and I called pretty much every research institute in Australia so universities, CSIRO just to see whether anyone was doing anything in this space. And I couldn't find anyone, none of the professors. They were sort of they might've been doing something that was skirting around the edges of it, but no one was actually developing a leather alternative and I eventually I can't.
Tina:I think it was through I came across a sustainable auditing company and through them they put me in touch with a leather application specialist who was working on traditional leather, supplying Australian leather to the European automotive industry so luxury automotive, so Porsche, Audi, Mercedes and I met him for coffee and he sort of confirmed that they were talking about it a lot alternatives, a lot in their production. Could they introduce it? Is it a threat? But it was definitely front of mind for the automotive industry and he said I think it's worthwhile looking into it. And so he actually started helping me develop the hypothesis on the formula that we would then go on to develop and we actually started mixing it in his garage.
Ben:Wow, so okay. So there's a lot of steps. You've just jumped through there. So he's helped you. He's said I'll help you figure out what the I guess chemical composition is or how this is produced, but he's a guy who sells leather. How does he know this? Or did you need to bring scientists into this?
Tina:Yeah, so I think, just because he had been working on tanning the hides and finishing hides that would then be exported to the automotive industry in Europe, so he had a really clear understanding of the benchmark that we would need to meet in order to make automotive spec, and we applied some similar principles to what we were doing as to what is being done in his industry only buyer-based and so I think he just helped me sort of find the research papers and together we did a bunch of research desktop research to see what was possible, and then, based on the hypothesis that we developed, we started kind of sourcing the ingredients and mixing it up in his garage.
Ben:And so what sort of ingredients?
Tina:I can't tell you.
Ben:That's your secret formula.
Tina:Yeah, that's our secret formula. So, yeah, that was the basis of it, and we've been working on it for two and a half years since then. So it's come a long, long way. And in fact, the first tests that we did in his garage were really they looked like scrambled eggs is the best way that I can describe it. So we then, after a few months of working together, we realised he had a full-time job, we needed a lab and we needed to bring on some expertise, and so that's when I went on to sort of I was working two jobs at the time, so I took the plunge and hired our first chief kind of technical officer and then simultaneously, was raising capital to bring it all to life.
Ben:So basically, you got far enough in a garage to think I have enough here that I feel this will work, but I need to raise money and find a true expert in this space to turn into a quality product.
Tina:Yeah, and it's I don't know. The power of belief is pretty strong because when I look back to what we were doing in that garage, it was pretty far-fetched in terms of where we are today. So, yeah, we believed that we could do it. We didn't have any validation in terms of the product that we'd developed in the garage, but we moved quite quickly from the garage to then producing pieces that looked and felt really good. It was probably about a seven or eight-month journey to get from there to the first pieces that started actually resembling leather.
Ben:And that was partly with the help of scientists in a lab who started to do that. So you go and rent a lab is that what you do? And you hire a scientist. Is that how you do this process?
Tina:Yeah, exactly. So we rented a lab called CoLab. So they're sort of the WeWork of biotech. It's like a bit of office space and then multiple labs, companies come in, you can rent a bench, you can rent multiple benches, and then there's shared equipment as well.
Ben:So yeah, Right, so there's WeWork for chemists, basically.
Tina:Yeah, pretty much yeah, and the guys at CoLab are amazing. They've supported me for at least the first sort of half of the journey and we're still very close friends and in contact. So, yeah, it's amazing having that network support all the way through is so important to building momentum and they helped me really push through some pretty hard times.
Ben:What are some of those hard times?
Tina:I think change in personnel is the biggest one, so you're going full steam ahead. And then one of the guys I was working with when we first started we were both working full time on the venture and then he realized that he couldn't keep going without being paid. We didn't have enough money to pay ourselves at the time and so he had to pull out and that really meant that I was then in the lab by myself, hands-on building the product and trying to progress it, which there's no way that I could have taken it to anything sophisticated in terms of the chemical formulation, and so those kind of things really slow you down, and Sam and Andrew from CoLab stepped in. One of them comes from a chemistry background, so he was able to kind of step in and help us along. And then, yeah, they were just amazingly supportive and helped reach out to their network to try and find additional students and people to bring on board. And, yeah, I think just being surrounded by people who want to help you in that positive direction is so important.
Ben:So between the time of going into the lab so you start in the garage, you go into the lab how long was it between going into that lab and then being able ?
Tina:Yeah, so I probably do things way too early. And I actually laser cut a piece of our leather. It felt really good.
Tina:We hadn't at this stage started testing mechanical properties, which I didn't really realize was a thing, but so I'd laser cut sort of a small card wallet out of a piece of our leather that we'd made, and I'd saddle stitched it together myself. And the other thing that I'd been doing in the background was building an investor database, and so I had monthly metrics that I'd send out to the investors and show how we were, I suppose, making progress against those metrics. And as soon as I started showing photos of these little products that we were making, I started having investors saying oh look, if you're going to do a raise, we're interested in investing. Then the other thing that we did was quite early, so probably in the September. So we moved into the lab in February and September We'd made a piece of crocodile skin.
Tina:Looked like crocodile skin leather and that was used at a display in Melbourne Fashion Week too. So we'd done those things pretty early on, even though we hadn't really validated against any kind of mechanical properties. But because of those two things we started getting quite a bit of interest in what we were doing and we're the only one in Australia who's doing anything like this too. So the material wasn't really usable. It certainly was starting to look and feel really good and then, yeah, then we started sending it out to the Australian Wool and Textile Association to do mechanical property testing and realised we had a long way to go.
Ben:But that's interesting. So just getting something to a concept was enough, and it's interesting the order you put things in. I would have thought most people would think I'll take my prototype and take it to potential customers, but you almost did it the other way around. You decided investors were the first people you'd bring along on the journey.
Tina:Yes and no. So we had the whole way through. I had been told with the raise that we were going to have to show traction in terms of customer validation as well, and there's a few critical things that happened. So first of all, when I had my bags, I was retailing my handbags through some quite large chains around Australia and at one of the meetings with one of those retailers before I'd started Alt. Leather, the retailer said to me I've heard that you're thinking about making the material yourself. If you do, we will invest.
Tina:And so that was probably the trigger point where I went all right, this is more than just an idea. I've got a large Australian retailer who's saying that they'd be interested, and these directors of this company are very finger on the pulse. They're always traveling around the world, they do all their own buying and things like that, so they would have had a really good idea of what was going on in the market. So that was probably the first trigger point. So I knew I sort of had interest from a big retailer from an investment perspective. But then I also spoke to as many brands as I possibly could throughout that first year.
Tina:So whilst we were developing the material, I was constantly speaking to brands to find out what their pain points are, what kind of volumes, what their price point they'd be looking for and really just what their drivers were.
Tina:And so I had I probably spoke to at least 80, I would have thought over that period of time more just from a research perspective. So no one was there were no dollars being exchanged or anything like that because we didn't have a product. But it was really really valuable qualitative research that we did so that we knew that we were developing the right material. Which is obviously very important and it's also a big thing that investors look for is have you got any market traction? And so I was able to go into pitch and say look, we've spoken to over 80 brands, both locally in Australia, but also some of those extended internationally, and this is what they want, we know what they want, we understand what our customers want, and so that's a huge, a huge part of investor appetite. So not only proving that we're making traction from a technical perspective, but also proving that we've got a market.
Ben:And you managed to have a successful raise too.
Tina:Yes, so we closed it December 2023 and we raised 1.1 million, and that was with the help of Startmate, who is an Australian accelerator program, and they really reached out to their network and helped me with finding the right investors. And then I also, just in terms of building out our data room and pitch deck and everything I had no idea how to do that. I'd never had any experience in capital raising before, and so I had some friends and just through a local network, who had been heavily involved in the Judo Bank raise, which was one of Australia's largest raises, and so they helped me pull all my financials together. And I would call Mel, who is an ex-investment banker. He was my financial advisor through that first raise and he then came on as an investor as well.
Tina:So we had a really great combination of an accelerator program, some quite big names, like Wollemi Capital Group who's Robin Denham, the chair of Tesla, her family office, came on board. The fashion retailer that I mentioned earlier. They came on board as well, along with some quite strategic angel investors. So some with manufacturing backgrounds. There's one in particular who was an ex-engineer at Tesla and he's now actually come on as our chief technical officer fractional now as well. So, yeah, my investors have been absolutely amazing and very supportive in terms of solving problems along the way, and that's why we brought on that group of investors was particularly so that they could help us throughout the journey.
Ben:So you think the ability of an investor to help you overcome barriers is as important as the money they put in?
Tina:Yeah, definitely, absolutely, and you sort of I think it's more important you want to be making sure. I think the saying is that an investor is potentially going to be with you longer than you'll be married. That's how the stats line up, apparently. So you want to make sure that you really are getting into bed, so to speak, with the right investors, because it can be really make or break, I think, and we've been really lucky with the support that we've had from our investors.
Ben:And then what would you say are the top three things you look for in an investor, now that you know what a good investor looks like?
Tina:I think definitely the ability to solve the problems that you're going to have coming up. So for us, that's very technical problems. Particularly, we need to scale very quickly in terms of our manufacturing, the manufacturing side of things and so that's where our chief technical officer has been really helpful, because he helps us spec out the equipment and then make a decision on when's the right time to purchase that. So that's been really important for us. I think industry connection is also really important. So if you've got investors that are well-networked in your end customer, I think that's hugely important. And then also, I think, just being able to be well-connected with other investors as well, because we're a deep tech company, so it's a long road to actually getting a commercial product to market and we need investors to support us all the way through that.
Ben:So ability to help you make the product, ability to help you sell the product and ability to help you get more investment.
Tina:Yeah, that's right.
Ben:It's a good triple play.
Tina:Yeah.
Ben:So you've been very successful in getting investors, but that obviously means you've got these partners that you have to keep in contact with. What's that like and what do you find works effectively?
Tina:So there are different types of investors. So the angels that we have on board are pretty happy just to take a backseat and I do monthly updates for all of my investors and then I do quarterly financial updates so that all just goes out via email. We don't have a board set up or anything yet, but we do. As of September last year we brought on a venture capital fund and that's just a completely different model. So obviously their remit is that they need to 10x their money within a very short period of time and so certainly things have leveled up having them on board and we came through this funds.
Tina:They've got a it's called their Atmosphere Fund, which is a pre-seed fund. So they've got core, a core investment fund, and then they've got a pre-seed fund and the idea is that they almost treat the pre-seed investment like an accelerator program and so they gear you up for core investment and so we've been running really fast with them over the last probably 10 months to try and gear up for core investment and we're about to go into our seed raise now and that has entailed by so probably we meet once a fortnight and we go through a comprehensive update and what needs to happen in order to prepare for core investment. So very regular meetings and now that we're moving into our seed raise, it's probably more like weekly, and sometimes twice a week we meet.
Ben:Wow. So how much time are you spending working with investors versus working on the product?
Tina:So I try and work as much as possible on the product and the business, but you need to also be there for your investors when they need. And I think once we get through this next seed raise, that'll drop right off again and we'll be much more focused on business as usual. But I think, just by the nature of this investment that we've had from this venture capital fund, it's sort of an accelerator program in the lead up to core investment. So it's just run as fast as you possibly can to get there.
Ben:Would you for other entrepreneurs? Out there considering getting investment. Would you recommend it?
Tina:I would only recommend it if you really really need it. So I would only take on investment if you really really need that to, I suppose, step change your business in some way, shape or form. So if you can take your business to market and it can grow organically, I would recommend doing that, because obviously you're just diluting yourself by taking on investment. But also it comes with the pressure of having to meet investor expectations, which can sometimes really bite you down the track too, because if said investor doesn't want to follow on on the investment, that sends a very different message out to market as well. So you've got to be.
Tina:I think you've got to think about it pretty carefully before you take on investment, because we're a deep tech company, we don't really have much of a choice. We've also gone after non-dilutive funding, obviously government funding, which is we've been successful with the industry growth program. We've had 1.15 million of investment from the government, which is amazing, because then that's a whole lot of reporting and the process for that was about a 10 month process too. So investment is hard work and I think if you've got a business that's going to grow organically, I'd highly recommend that. But if you need it, like we do. Then, yeah, just be really careful with the investors that you work with.
Ben:Take me back to the story. So we're now at the end of 2023 and you've managed to get a product that looks right but doesn't stand up to the technical requirements. But you've also now got investment. What happens next?
Tina:So we move into Monash University, and the main reason for moving away from CoLabs is because we need access to advanced equipment. So CoLabs was amazing to get us off the ground, but we couldn't access the advanced equipment that we need to really understand what our material is doing at a molecular level. So we move into Monash University, which is much, much more expensive than where we'd been, and then we build out the team and start purchasing equipment. So, yeah, that's been the last 18 months. We've been focused on getting our material up to industry standard, trying to get some traction with customers in terms of bringing the dollars on board, but also starting to just make our process less manual, because we were literally I was literally rolling out pieces with a rolling pin, and now we have a slightly more established system. And then the next stage is that we're going to automate it all.
Ben:So an automatic rolling pin is the key here.
Tina:Yeah Well, it's not very automatic still, but that will be the next stage. So we're gearing up actually for our seed raise in the next couple of months. So that will be then to build out our pilot manufacturing facility.
Ben:And where's the product at now? Have you reached the technical requirements to be a Tesla seat?
Tina:Not a Tesla seat yet, but we have reached the technical requirements for accessories and footwear and apparel as well. So we last year we were part of an accelerator program that's run by CSIRO and it was a cross-border accelerator program. So India, australia and we spent quite a bit of time over in India running our product down industrial production lines in footwear and accessories manufacturing facilities and, yeah, our product stood up under the test of industrial conditions, so that was pretty exciting.
Ben:So there's people out there wearing shoes made of this product.
Tina:We have got a couple of shoes that I have worn, so we've got two pairs of shoes and a number of handbags, and our most recent success story was that we were actually we worked with a Japanese haute couture designer and we were on his runway at Paris Fashion Week two weeks ago, so that was pretty amazing.
Ben:So you've made it to Paris Fashion Week?
Tina:We've made it to Paris Fashion Week
Ben:How did that feel?
Tina:Yeah, that was pretty wild actually, and that was again a consequence of me saying yes, probably before we were ready.
Tina:So, yeah, we got. I was put in touch with this incredible Japanese designer who likes to work with sustainable biomaterials, and I think I probably touched base with his team in probably around April, May, at which stage we could produce a few small pieces of our material at a time and they said, oh look, we've got our collection coming up for Paris Fashion Week in July. Are you in? And I said yep, sure, hung up the phone and went, oh, expletive, expletive, expletive. And then the team looked at me and went you're absolutely mad, because I think we had our yield in terms of what we were able to produce was about 25%. So, as in when we were producing large pieces of material, only 25% of those pieces were usable because we had so many defects through them, because it was all very manually produced, and so, yeah, we had to get 24 60 by 60 centimeter pieces over to him to use for this collection, and so there was a lot of late nights and A lot of rolling pin, a lot of rolling pin.
Tina:Yeah, so so, but we did it and we were on Paris Fashion Week, which was pretty amazing
Ben:, that must have been a very proud moment
Tina:It's only just happened recently, so we're only just sort of starting to share that news. Over the last couple of weeks we've had the images have come through and it was extraordinary. What he did with our material was absolutely phenomenal, so very exciting so that's obviously one.
Ben:You've also won some awards and gathered quite a lot of media for this, how important has that been to your ability to keep going in terms of keeping engaging your investors but also starting to get customers more and more interested?
Tina:yeah, it's been really important. I think, as you say, making sure that you're constantly proving that you've got momentum and traction, both from a brand and an investor perspective, is so, so important. And so, yeah, any media attention is very, very valuable and I think you need to just make sure that you're constantly present. You know that you're showing people that you're doing things. I guess it sounds really cheesy, but people like to back winners, and so if you're constantly putting your best foot forward and showing, you know we're on Paris Fashion Week or we're, you know we're working with this car brand, or you know we've got our first brand partnership agreement. We signed about a month ago and saw our first revenue through the door, which is massive for a deep tech company, a biomaterials company. Usually it takes at least five years and we've done it probably in about three.
Tina:So, again, probably going a little bit early, but we've got this incredible partner who's actually a luxury winemaker, and we're currently making 120 units with them over in India through the manufacturing partners that I've developed in India to make these corporate folders for them, and they're about to launch a chateau in France, and so those folders are using their waste product in our material to make the folders and then they're going to share those with, gift them to, I think, european media and some of their corporate partners at the opening of this big chateau, which is super exciting.
Tina:So things like that. We're constantly just trying to push to make those happen so that we can again announce in public that we've got these incredible things happening. But I do think it there's a fair bit of pressure that it puts on you when you're building. In plain sight it is not an easy thing to do and it opens you up to criticism and it's just tough to be constantly having to put yourself out there before you feel like you're ready. But I think it is unfortunately a necessary evil if you need to get investment and you need to get brand partner interest.
Ben:What sort of criticism could you possibly be attracting?
Tina:We haven't. There hasn't been much, but I think the leather industry is a powerful industry and we do live in a country that's very probate and mate and dairy and we don't. That's absolutely fine. But I do think, you know, there's just a lot of controversy around what we do, I suppose, in those areas.
Ben:They think you're going to put farmers out of work?
Tina:I don't think it's that deep, but I think it's just the battle of leather and what we're doing, I think, just sometimes comes to the forefront. We're not anti-leather in any way, shape or form. We just think that at some stage we're going to need more sustainable solutions. There's not much more land on earth to keep growing the way that we're growing in terms of cattle production, and so we think at some stage there will be an absolute necessity for sustainable alternatives. But I guess you put yourself out there and yeah.
Ben:It's the world we live in. So take me back to the customer, because obviously, fundamentally, there's the creation of a product and there's the selling of the product, and when you talk about this, obviously there's. You've discussed retail apparel, handbags, those sorts of things. You've discussed leather folders and we've discussed car seats and shoes. What have you found when you've gone out there and started to talk to these sorts of customers? You said actually a lot of them are quite interested and actually some of them investors. But what are the sorts of things that they see as enablers, things they are interested in that may make them want to buy this, but also what are the sort of barriers you find and what do you find works in getting them interested and starting to create a potential partner for the long run?
Tina:So initially we worked really hard with going out to market to gather that information, as I mentioned earlier, and then there came a point where it was sort of a tipping point, where we then found that we had started getting a lot of inbound. And I think it was probably because of the media attention that we got and particularly from the automotive industry when Robin Denham invested in us that the media caught wind of that and it went literally went all over the world and so we had a lot of inbound traffic from the automotive industry and really they're looking for a sustainable material so that's going to reduce their carbon impact and they're future-proofing themselves against regulatory change. So I think, particularly with plastics and carbon taxes, they know that they want to be avoiding anything that's really high intensity in terms of the carbon emissions but also completely plastic-free. And there's not that many leathers on the market even animal leather is coated and finished in plastic, and so there's not that many alternatives or leather itself that is completely free of plastic lacquers. So that is definitely appealing. And then the other thing that is from a commercial perspective that we can do we're not there yet, but it's certainly the way that we're going is we will be producing our material in do. We're not there yet, but it's certainly the way that we're going is we will be producing our material in rolls.
Tina:And if you think about an animal hide, it's an odd shape and often it will have defects because the animal might rub up against a pole or it might be tick, infested or have you know, bites and pockmarks and things like that.
Tina:And so when you're dealing with hides, there can be a lot of waste, and cutting floor waste particularly. And if they're coloured in a certain way, you know, and you've got a bag design which is quite a large bag, you might only get one piece of the bag out of one hide, so that they can be up to 40 to 60% of cutting floor waste from a hide. So if we're producing in rolls, you can get a lot more out of that roll and you're not shipping waste. So there's huge commercial benefits to synthetic leathers that are producing in rolls. And then the other thing that we're starting to think about as well is can we go one step further and use molding techniques so that you're actually only producing the exact shape of the shoe or the bag or the seat, so that there's literally zero waste? So that would be the step after rolls is we're going to try and really completely revolutionise the way that we manufacture leather?
Ben:So it's very much an efficiency story from that point of view. I imagine if you can produce at volume, that creates a huge cost saving.
Tina:Absolutely Massive cost saving and just with everything from cutting floor waste, but also in terms of what you're shipping to. So, yeah, I think there's big commercial benefit and, of course, the environmental impact where yeah, and what are the barriers you face when you get a negative response?
Ben:What is it generally?
Tina:So I think one thing that's really difficult for us to prove at the moment is longevity, because obviously it's a brand new material. It hasn't been in market. So people often say, well, how long is it going to last? And obviously we're testing against the industry standard, but it's really hard to know. We don't really know.
Tina:We're aiming for 10 plus years and we've done accelerated ageing tests to determine whether our material is industrially compostable which it is but it's very, very difficult to say, oh, it's going to last for 10 years, and so that's probably one tricky thing, and the only way to find out is by turning it into shoes and bags and wearing them around and see what happens. So there is a little bit of a risk there, I suppose. So we need brands and partners that are willing to go through the R&D process with us and take on that risk and grow together. And then the other thing is price point. So we're at cost parity to a premium animal leather at the moment, but obviously when you're starting out and you're trying to scale, things are going to cost more than an industry that's been around for centuries. So again, it's just we need brand partners who are willing to work with us and work through that so that we can get to scale and then we can have mass market adoption at a price point that's accessible.
Ben:Yeah, so you need brands with patience basically. Yeah, want to be part of the R&D.
Tina:Yeah.
Ben:And have you found any that you're prepared to name that have been good like that?
Tina:Yeah, so under NDAs with most of them. But there are a number of Australian brands that we're working closely with, in both footwear and accessories, who have signed partnership agreements with us, which is really exciting. And then we do have the luxury winemaker who is supplying us with their waste and we're able to turn their waste into high value products, and they're our first partner who's been willing to pay for our material, so that's really exciting.
Ben:And so how long is it, do you think, before I'm going to be walking in to buy my Alt. Leather shoes?
Tina:Well, hopefully not too far away. We need to scale production, which comes with complications because it's not kind of just like everything changes. You have to optimize the formula as you scale. It's not just like you know all the ingredients mixing together and you just scale up the amount of ingredients. You have to actually optimize. So that will take probably a good 12 months to get right. But then once we've done that, so we're looking to move into our new premises within the next sort of three months or so and then we'll start bringing in that automated equipment and then, yeah, then it'll be six to nine months probably of optimizing that and then hopefully we'll be ready to roll.
Ben:Wow, so I shouldn't buy shoes for the next year.
Tina:I'll just wear out what I've got.
Ben:Just back to... You just discussed changing the formulation as you scale up and obviously you can't tell me your secret formula, but we know that it involves essentially organic waste. Yeah, what are the benefits there? Is there a business benefit for you in that, essentially, you're taking waste as your product? But also, what are the environmental benefits of that?
Tina:So one thing that we have. When we first started out, we were hell bent on using as much waste as we possibly could, and what we found was, from a quality perspective, there was probably a tipping point where, if you use too much waste, it's really difficult to manage the quality. But so we use 5% of our ingredients from waste and it's from the wine industry. So we use grape mark, but then that's pre-processed into the ingredient that we use. Obviously, the benefit is massive from an environmental perspective because you're taking all of the after the grapes are pressed into the wine. You take all the leftover gunk, like the skins and things like that, and then that's pre-processed and turned into a product. But because it has to go through that pre-processing step, there's not much of a value add for us from a commercial perspective. So it's more just that the wine producer is able to get rid of their waste and use it for something of more value.
Ben:Do you pay for that, or do they pay you to take it away?
Tina:We do pay for that, but they don't charge for the delivery of it, if that makes sense. So they'll deliver it because they want to get rid of the waste. And then, yeah, but we do pay for that pre-processed product. Unfortunately we haven't been able to get that for a discount. But yeah, we have tried a lot of other agricultural wastes in our product too, and it's not to say that we won't use them in future. But we did just find that it was starting to affect the quality of the material. So we need to find a way of, I suppose, processing it in a way that it's not affecting the quality. And then there's a whole lot of balances that come into play with that, because how much pre-processing do you do before it actually is countering the sustainable benefit, if that makes sense.
Ben:It does. I can see a future where I can have my grape leather shoes or my banana leather shoes or my mixed fruit shoes.
Tina:Yeah, exactly, it's going to happen, definitely yeah.
Ben:Great, I'm going to move us on and talk a bit more about you rather than your product. So, according to the 2024 Startup Master Report, in Australia, less than a third of entrepreneurs are female and it takes them around 25% longer to find funding than male entrepreneurs. What's your experience been like?
Tina:I didn't have that experience at all. So with our first funding round we closed around within two months, so super fast, and I think it probably comes down to a few things. I've never really. Obviously I'm a female founder, but I approach it very much as a business person. So you walk into the room and you're selling a product and if it makes commercial sense, then that's all there is to it.
Tina:I have heard that female founders often get asked slightly different or skewed questions to male founders, I think, maybe questions that focus on the risk or the negative aspects of the business, whereas males tend to be a lot more confident and so they'll come in and they'll really sell, and so, therefore, it's focusing on the positive aspects of the business.
Tina:I have heard that it's hard to know what goes on in different rooms. I definitely didn't feel that I was being judged in any different way, but one thing I will say before I started the raise was I was at an International Women's Day, and there's a lot of focus on the negative statistics, and it can be really depressing and particularly intimidating if you're about to go into a raise, so I tend to completely block those out. But I listened to Kim Teo, who's the CEO of Misty Yum, and she has raised, I think, over $150 million for their startup, and she had some just such quality advice. That was you're a business person, and if you know your tech inside out and you know how to sell it so that it's adding value to the investors and adding value to your customers, then there's no reason why you should be traded any different to anybody else, and I really just absorbed that like a sponge and have just followed that like a mantra ever since I heard that and I think it's put us in good stead.
Ben:Sounds like it's working.
Tina:Yeah.
Ben:So you know we've talked about you as a business person and your success, but just as a person, what's one thing that people are surprised by when they first find out about you?
Tina:I think everything that I'm doing is pretty surprising. We're making leather out of plants, so that's always a good conversation starter. I think people are surprised that I've got three kids as well. That's always a bit of a surprise. And yes, do you mean in terms of what I'm doing at the moment, just generally, or just in general?
Ben:What makes you you?
Tina:I think I'm super curious and I've always never really settled for the status quo. So if I think back across the course of my career, I was in advertising for ages, but at one stage I joined the police force.
Ben:That's surprising.
Tina:I didn't actually go through with it, but I got into the police force. I was really keen on doing it and my husband just said no, this is absolutely ridiculous, You're not joining the police force. I think the Lindt siege in Sydney happened around the time that I got in, and so he was like no, this is a bad idea.
Ben:Why did you think it was a good idea?
Tina:I'm not saying it's not, yeah, no, I just wanted to give back to the community. I just wanted to do something. Good yeah.
Ben:That's interesting. So it's the same thing that drove that to fundamentally drive you to something.
Tina:Yeah, I've always been searching for that way of being able to contribute positively, I think. And yeah, so I think there's been a few twists and turns along the way.
Ben:What other things have you started but not necessarily seen through before you ended up with Alt Leather?
Tina:I'm trying to think. There was one at one stage, because I absolutely love snowboarding, I love being in the mountains, and my cousin's a prolific skier as well, and she was living in Denver, skiing in Vail, and so we were going to start a skiing business together whereby we would take Australian wealthy Australian people over to Vail and tour them around the mountain. And yeah that, we did the business case and the plan, we worked through it all and then decided not to go ahead with that. That was one thing that would have been awesome actually.
Ben:I don't know about the environmental value of flying rich people...
Tina:That's true, but we would have had a lot of nice ski days, yeah, I think. And then the police force and then obviously the handbags, which led me to where I am today. But yeah, the handbags was. I sold out pretty quickly of those and then obviously couldn't build a brand of handbags and build the leather, so that fell to the wayside, I think they're the main things.
Ben:Is focus important in that? Because I mean, as you say, you started the handbags and then went, oh, I need the supply chain and started that, but you've then dropped the handbags even though they sold out, which says that they're an in-demand product. Do you think some people perhaps try to do too much, and focus has been one of the keys to your success.
Tina:Yeah, maybe I think there's. Yeah, you can. You just spread yourself way too thin and I think to do something really well, you need to definitely focus, yeah.
Ben:How many hours a week does this take?
Tina:Alt. L eather. Oh, you don't want to know. Way too many. Yeah, I mean, it's seven days a week, round the clock.
Ben:And you managed to juggle a family at the same time. Any hot tips for people who are trying to do those two things?
Tina:I think it's a pretty impossible juggle. I never feel like I'm doing either one the right way. I do read Harry Potter every night, have my bedtime story and then it's back to the computer to keep going. Yeah.
Ben:So you do find those specific times with your kids to go. This is my time with you
Tina:I found so. For the first year I was doing Alt. Leather, I was working from home a lot of the time and I found that really challenging. I feel like it's much easier to separate home from work, so to to be at the lab, versus trying to sort of juggle everything at home, because then you feel like you need to be present for the kids when they get home and you can't be because you, you know, might have investicles or you know, and so I just find separating works way better, so doing, kind of I suppose, a nine to five in the lab and then coming home and having dinner and reading stories and then getting back online after that seems to be better, yep so structure definitely that.
Tina:I mean, that's what works best for me. Everybody's different, I suppose. But yeah, then the weekends is going to watch sports matches but working the rest of the hours. I don't have much of a life it sounds like a very interesting life.
Ben:There's not a lot of relaxing
Tina:no, no, not much relaxing.
Ben:Yeah. So supposing you know we need more people like you, doing more things like this with the idea of I can change the world. So if there are other people out there who also do not like relaxing, and want to go out there and try and change the world. What would be your words of inspiration, or support, or just advice to be the next Tina Funder.
Tina:I think market validation, it's all about market validation. So I think if you've got an idea, that's great, but go out and validate it with the market. So go and talk to your customers and find the people who are going to be buying it At the end of the day, that's what's going to make it work or not. It's either going to live or die based on whether there's demand. Work or not. It's either going to live or die based on whether there's demand. So I'd say, as early as you possibly can, even if it's just an idea, you don't have a product, you don't have the service built. I would say go and start talking to people as soon as you possibly can to see if there's appetite for it, and if there's not, then maybe it's just a simple tweak to the idea to make it more appealing to the audience. But if there's no market, then there's no point in doing it.
Ben:Fantastic, and if I want to find out more about Alt. Leather and follow your journey, where would I go?
Tina:Oh, great. Yes, you can check out our website, which is alt-leather. com, and follow us at alt. leather_ on Instagram, and we're also on LinkedIn. Most of our comms is through LinkedIn, so yeah.
Ben:Okay, website and LinkedIn and Instagram if you want to see some nice pictures of the banana shoes when they come out.
Tina:Of the Paris Fashion Week. Oh, of course, yeah.
Ben:Wonderful. Thank you for your time.
Tina:Thanks so much for having me.
