Episode 196 of the Reversing Climate Change podcast. You can listen on Spotify (subscribe there for ad-free), Apple Podcasts, or wherever else you listen. Paid subscribers get the ad-free version right here on the page.
Nori has evolved a great deal since its founding in 2017, and today, the team is ready to shift from a build-to-learn prototype to a build-to-scale model. The product team is working to reduce friction in the supply experience, while the sales team develops a repeatable, scalable business model. So, what progress have they made in the last year? And where is there still room for growth?
Josh Felser is an angel investor in Nori and Founder of Climactic, a VC fund that invests in visionary founders solving our planet’s greatest challenges. On this bonus episode of Reversing Climate Change, Josh interviews Nori team members Paul Gambill, Evangeline Marzec, Alexsandra Guerra, Radhika Moolgavkar, and Ross Kenyon for an update on Nori’s progress over the last 12 months, starting with the major trends in the climate space that affect the startup’s carbon removal marketplace.
They discuss how the team has grown, sharing Nori’s values-based approach to hiring and explaining how they’ve iterated over the last year to improve product-market fit. Listen in as Paul, Evangeline, Alexsandra, Radhika, and Ross offer insight on building trust with customers as they work to scale and learn about the forthcoming launch of the Nori token and the role it will play in determining the marketplace value of removing carbon from the atmosphere.
Resources
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renee Mauborgne
Gimlet Media’s StartUp Podcast
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Full Transcript
Announcer: Listening to the Reversing Climate Change Podcast by the team at Nori, the Carbon Removal Marketplace, is a show about the innovators and entrepreneurs developing solutions to climate change.
Ross Kenyon: Hello and welcome to the Reversing Climate Change Podcast. I'm Ross Kenyon. I'm the creative editor at Nori's Carbon Removal Marketplace. We have a special episode. It's been more than a year since we have done one of these Nori facing episodes explaining who we are, what we do, where we've come from, where we're trying to go. And we have the heads of a bunch of different teams at Nori here to talk about them. Also being interviewed by one of our angel investors, actually, Josh Felser, currently raising a climate fund called Climactic. So glad you got that name, Josh. I can't believe no one sniped that out from under you before you even got to do it.
Josh Felser: Yeah, I mean, I've always been a kind of a decent namer and there's still one URL that I'm after, trifecta of Climactic, still working on it. He's not going to say it because that makes it harder to get. And if any of you listeners try and get ahead of me on this, I'm going to really be upset.
Ross Kenyon: We block all the others from our listeners. So don't worry about it, Josh. I think you're safe. I'll go ahead and introduce you to the team more formally and for our listeners to know who exactly is speaking. Evangeline Marzec, I think this is your first time on the podcast since we've brought you on, but you're the head of product. This is your first time.
Evangeline Marzec: It is, and I've been with Nori since January.
Ross Kenyon: January, and what a different place it has been since you have joined and how grateful we are to have you. Alexsandra Guerra over here live from Peru living that Cusco life. It's okay if I say that, Alexsandra, are you, isn't our core philosophy transparency and honesty?
Alexsandra Guerra: Yeah, I mean.
Ross Kenyon: Our local Cuscania on the team, the director of corporate development, head of sales, customer development. Radhika Moolgavkar. Radhika, you are the head of supply and methodology. You have a different title that we're going to talk about after we decided because it's a mouthful.
Radhika Moolgavkar: I think that's simple. Fair enough.
Ross Kenyon: That's right. [unclear] Hey, you've also been hosting the new season of Carbon Removal Newsroom, which has been a fun experience too. So this is not your first podcasting rodeo.
Radhika Moolgavkar: No, I'm an expert at this point, Ross. You know that, five episodes in and I've got it nailed.
Ross Kenyon: I think it's more than most people last. I think most podcasts quit after like three episodes or something. So you've made it. You've made it over the hump. Congratulations. Great. And Paul Gambill, I know you know the most because Paul's a CEO and does fundraising for Nori among the other tasks that a CEO is expected to perform. Hello, Paul.
Paul Gambill: Is that all I am to you? Just a money getting machine?
Ross Kenyon: Not at all, but it is a part of how I see you.
Paul Gambill: Oh, you just want to use them the same. Oh, okay. Yeah. I mean, I see well aside.
Ross Kenyon: Well, that's because you should. Yeah, as the investor. Yeah. [unclear] Paul, as we call him. Yeah. Okay. That's enough for now. Josh, how about you save me for myself and start hosting this show for us. Interview Nori. You're doing such a great job.
Josh Felser: It's a hard act to follow. I'm meeting, you know, most of you for the first time. Ross and Paul and I have met before, honestly. And I'm really excited to learn more about Nori and hopefully by my learning, anyone else learns. I get to start from a pretty low bar because I am new to being involved with Nori. And so I kind of would like to, I have a little schedule I could follow, but I also want to break off whenever there's a reason to, and anyone on this show, please take me off of my schedule whenever you think it's appropriate. And also, I like embracing the uncomfortable. So let's talk about things that are exciting and uncomfortable as part of this podcast.
So the first thing, and I'm really gonna, I'm gonna put it to the whole, kind of all of you, is a year ago you did this show, and what are the macro trends that you're seeing? That talk about the major ones, but especially the surprising trends. And we'll have that in context as we go through more of the Nori specific information. So maybe anyone who wants to answer that, please, let's talk about the macro trends that impact Nori.
Paul Gambill: Well, I'll start and say Nori is a carbon removal company with this also a cryptocurrency blockchain element to what we're doing. And the thing that's been most surprising to me in the last like six months or so is as the current crypto market bull run has gone on, there's just been an enormous amount of commentary and sensitivity to the fact of work style blockchains are creating a lot of carbon emissions. And so, you know, we're recording this in mid-May. It was just a couple of days ago that Elon Musk tweeted about how Tesla is now concerned about the carbon emissions from the Bitcoin stuff that they've been doing. And we see this coming up a lot more and more. And it's exciting to me actually, because it means that we're built on Ethereum and the Ethereum developers have been deciding that they're going to move up the pace at which they transition over to the proof of stake network, which is going to dramatically reduce the carbon emissions from operating the blockchain. So crypto and carbon emissions seems to be just like coming to a head right now. And it's fun for us because that's exactly where we sit.
Josh Felser: And on that trend, I'm still learning a lot about crypto, but I'm going to plug a currency that I invested in because it's legal and I can do it. Helium is a currency I spend time with because it does tackle that climate and crypto challenge and it generates coins from hotspots, which really aren't, there's no incremental damage to the environment, which is really why I invested.
Paul Gambill: Yeah, Helium's a really cool example of building out a real world network that actually provides value to people as they use it.
Josh Felser: What about Evangeline or Alexsandra, you know, Radhika, what are you seeing? What trends have you seen emerge over the last year that have you excited and maybe even concerned about?
Evangeline Marzec: One of the things I've seen is sort of growing fluency outside of niche markets in carbon removal and what that phrase means. And it's something that's discussed more in the news cycle than I saw it a year or two years ago. And so just a level of sophistication in both the buy and the supply side and knowing that there is a difference between carbon removal, some of the other types of climate change activities.
Josh Felser: Can you define it for us? Carbon removal?
Evangeline Marzec: Yeah, so in the atmosphere, a tonne of carbon is a tonne of carbon and you can remove it from the atmosphere through a variety of technologies or natural sources. Then separately from that you can store it, you can use it, that is different from capturing it, which is to say, taking it off the smokestack as it comes out.
Josh Felser: Any other trends? I can call on each of you individually. And by the way, I appreciate all of you other than Ross, as Ross is making, he's making, no one can see this in the audience, but he's making funny faces as we talk. And it's a bit, you know, after I'm learning not to react to it now that he disappeared. I like seeing Ross's face, but--
Ross Kenyon: Am I distracting you by being reactive? You want me to stop?
Josh Felser: No, I wanted to do it, it's great. I wanted to be, as somebody said, transparency, honesty, we're all doing that on the show.
Ross Kenyon: I'm just moving on to this, but carry on Josh.
Josh Felser: Okay. Allow it. I don't want to have to call on everyone individually, so I'm hoping that people will chime in. We'll move beyond the trends in a second. Let's just finish this. Any other major trends that you've seen in the last year that are impacting Nori?
Radhika Moolgavkar: On the supply side, I think what we're seeing particularly amongst farmers is a lot more interest and a lot more hesitancy in some ways. So a good thing and a bad thing. Obviously, the Biden administration has put a huge emphasis on soil agriculture health. There's a lot of bipartisan support, which is amazing. But I think it's also caused a lot of confusion with farmers and also an interesting feeling that carbon's undervalued, which I think we all agree on that point. It's interesting trend of both wanting to participate, but wanting to sort of hold back to see where the markets are going. That's only been in the last couple of months, I'd say really, and since maybe early spring.
Josh Felser: Great. Can anyone comment on the demand side? [unclear]
Alexsandra Guerra: Yeah, I think it's been interesting to see a lot more organizations making carbon negative commitments. So like Microsoft had a big procurement for [unclear] and said that they wanted to, at the beginning of 2020, that they wanted to remove all their historical emissions by 2050. So one example of many different types of corporations looking at not just being carbon neutral, but actually removing more than they've emitted. And we're seeing a lot of small businesses also want to take that type of leadership in putting that to their brand, like being very focused on the climate. There are the, you know, I think we've seen, especially in pandemic times, lots of Instagram ads for, you know, the first carbon negative notebook or something like that. And so more and more people are trying to adopt this into the branding of either their company, their services, or the products that they're selling. That's also exciting.
Josh Felser: Anyone else have anything to add? Paul, Ross, move on from the macro trends? I think it'll play out in some of the conversation.
Ross Kenyon: Similar to what Alexsandra is talking about, net zero has come along and become a very prominent paradigm and it has prioritized carbon removal. Companies who are looking to say that they have dealt with their past and current emissions, is no longer enough to be doing offsetting with avoided emissions or now it has to be removed. So there's a lot of conversations now about what is permanence, and so net zero sets a hundred year benchmark. But Nori, we are not comfortable doing that for soil. We have an implied 10 year permanence for every NRT that we sell. Those are these questions of do we have to multiply out 10 times? If you want one tonne sequestered for 100 years, you have to buy 10 NRTs. Is it strictly linear like that? Is carbon removed at certain times more valuable than others? There's a lot of interesting questions that I've been trying to wrap my head around too. And I imagine customers are as well.
Josh Felser: Can I say more on that?
Ross Kenyon: Yeah, please.
Josh Felser: And I want to throw one thing that from the outside, that authentic offsets, whatever that definition, which everyone's trying to define what that means, but authentic offsets totally in vogue and only increasing in demand. And so it's trying to understand the difference between authentic offsets and obviously this bar, stream of that is greenwashing, and I know that that's, that Nori, this distinction is so important to Nori. That's where Paul is headed.
Paul Gambill: Yeah, well, I wanted to see something about the permanence, but I guess I will comment on that too because there have been, and this is definitely a trend, multiple stories recently, investigative reports coming out about mostly forestry projects that were avoided deforestation projects that purported to offset a lot more carbon than was actually the case. The Nature Conservancy had forestry offsets that they were claiming were trees at risk of logging, which that's never made sense to me. They're a conservation group, so how are they at risk? And then the California cap and trade market, there was a big study that just came out a couple of weeks ago about how they overestimated the number of carbon emissions avoided from protecting forests in California by 39 million tonnes. It's an enormous amount.
And these are all related to, there's like a categorization or hierarchy that I think is important to define, where in the world of carbon offsets, there are projects that avoid emissions. So they're saying there's some baseline happening, carbon emissions are going up, and then we're going to do something and we're going to reduce the amount of carbon emissions that are going up. Well, that's reductions. And then there are avoidances, which are entirely getting rid of that. And then there are removals, which is something different. It's about putting labor and capital into a project and you're actively pulling CO2 out and sequestering it somehow. And it's just different because you're not trying to prove the counterfactual that like, well, you know, if it weren't for this project, those emissions wouldn't have happened or something. It's much more straightforward. So for us, and this is why we focus only on carbon removal, it's just easier to be able to measure and verify and produce something that customers can understand and wrap their head around.
So that's another, I think, important trend. But I wanted to comment on the permanence thing that Ross was talking about, because this is something we've been talking a lot about internally, as we've been discussing kind of the logistics of how we add additional methodologies to our marketplace that goes beyond just soil carbon, because we want to add things like kelp and direct air capture, materials and who knows what else. There's a lot of conversation in the carbon removal industry around permanence. The idea of if we're pulling carbon out of the air, we need to make sure that it's staying out of the air for as long as possible. And by and large, I agree with that goal. The longer it can stay out, the easier of a job we have in the future. But I also don't think that we should let perfect be the enemy of good here. And it's much more important to me that we build a planetary wide carbon removal factory that's capable of high throughput. So I think throughput matters a lot more than permanence. I would so much rather remove 100 million tonnes for 10 years than I would remove million tonnes for 100 years. Because the problem is right now, there's too much carbon in the area right now. So anyway, that's a kind of tangent about permanence.
Josh Felser: That was really helpful. I think we have a good understanding of the offsets that are, that Nori is focused on in contrast with a lot of what I see out there, we all see out there, is really important. I think you did that. I'm also noticing you have a lot of really psychedelic imagery in the background, Paul. And that's another, maybe another story for another time, but I just tell you, I see you and I notice that.
Paul Gambill: Thank you. Well, what people don't know is we were closing our seed round last summer and then Josh swept in with like a week before we were closing, introduced himself to me saying he was a big Grateful Dead fan. And that's actually why I took your call. So, there you go.
Josh Felser: Thank you. In talking with, and I'm definitely Grateful Dead, not Phish. I'm sorry for those that are in those camps. So Ross had the idea, and I agree with you, that I'm going to kind of approach this as if I were looking at Nori as an investment, which of course I did. And the macro trend kind of conversation is really how I would approach it. And so the next thing that's really important, and I think this is interesting, really interesting conversation for Nori because a lot has changed in the years, looking at the team and how has the Nori team changed over the last year, what are the gaps that you still want to hire for, but just talk about the team strength. And I can ask, and maybe, I think anyone can answer this, but it could be that Paul answers it, or Alexsandra.
Alexsandra Guerra: Yeah, all right. So we closed the round in August, right? And Paul, do you remember how many people we were at that time? It was.
Paul Gambill: It goes 9th.
Alexsandra Guerra: Yeah. Now we're at like 16. We hired a lot of people in the middle of a pandemic. So we hired the first one to come after the money came in was Radhika, who's on the phone. And then we had, you know, it's fantastic because we were really need to count on the supply side and then we started looking rapidly for supply account managers, which we hired to. We were looking for engineers, had a product eventually joined us, had a product at the beginning of the year, a new designer. So the team is like half completely new.
And it's been really interesting because right before we started to hire, or when we were hiring, the founders, we got together and we put our heads together and said, well, what are our values? And the values, we have five values, are to guide us on how do we want to hire, but also how do we want to maybe fire if we made the wrong hire, but also how do we want to work, make decisions and work together and kind of guideposts for our culture and I think they've been really helpful. I'll rattle them off really quickly. We have our acronym called HALAC, so honesty above all else. Assuming best intentions, so asking clarifying questions if you feel like something's off. Limiting our work in progress, acting with the end in mind, and continuous improvement. So if any point throughout the company, if we're like, I don't know, having a discussion about what should we focus on next, if one of those five values is violated, or they can steer us back to where should we be focusing and what we should be doing. And I would say, and I think we've all agreed like the values have been really helpful in creating a pretty cohesive culture and everybody who's joined the team has just been fantastic in not just their skill, but their enthusiasm and the culture fit.
Evangeline Marzec: They've been really useful guideposts for us. There are definitely some strategic decisions that we've made recently by calling back to those values, especially around limit work in progress and act with the end in mind, which are always kind of in tension with each other.
Paul Gambill: Been really valuable, and for any founders listening to us. When we went through Techstars in 2019, one of the most useful presentations that we got was from the CEO at SendGrid. And he was talking about company values and the thing he was, they have four and I don't remember what they are because I don't work there. But for people who do work there, they all have to be able to rattle them off. And he does his thing with his fingers, like thumb, forefinger and so on. You can say them all really fast. It was like one word each. And that really stuck with us, that like these need to be things that we can recall in conversation and look to. And it's been, we recodified these values last summer and fall. And it's been really noticeable the effect that it's had.
Josh Felser: There's a relationship acronym that is relevant for companies too, but I use in my work phase two, and it's called VUE. It has some similarities. VUE, and it's vulnerability, impartiality, and wonder. If you think about it, there are more business terms you could substitute there, but it kind of leads to the place which is like be open to what you don't know, care about whether people are going through and try and approach with impartiality because that's how you can have the most wonder, you know, in curiosity. Where the main gaps at Nori, expertise, and so you really wear you what, whatever you can assess publicly about your, well, where you're hiring your greatest and most impactful hiring needs are, Paul.
Paul Gambill: So we're trying to take an approach of like hiring for what's needed as early as is necessary, if that makes sense. So we've been growing at a pace of like three to four people a couple months or so. And one of the things that we did over the last like year, basically year plus, is that we put a lot more emphasis and focus on the supply side of our marketplace. Side of marketplace, you can basically think of us as having two different businesses that we have to run simultaneously. And if we don't have supply inventory and a pipeline of new carbon removals being measured and verified and generated, then we don't have anything to sell. And so we put a lot more emphasis on the supply side. And it's only recently that we started building out on the sales team. And as we've been doing so, we're still in this mode of doing a lot of customer discovery and interviews and research and trying to understand like we believe we know what basically the right segments are to target for customers. But if we're going to be smart about hiring and building out sales team and marketing and all that kind of stuff, we need to be testing as we go and ensure that those resources are being applied in a really efficient and effective manner. And so that's the stage that we're kind of at on the demand side of the marketplace, is customer discovery. Get it right and then build fast and grow and scale that side of the company.
Josh Felser: Got it. Okay. By the way, in the real world, intruding into our show, I have a 15 year old daughter, I have every other week and she's telling me like, crazy person in the background. So I'm just like, you know, that, you know what, we're working from home and this is reality and I have my daughter every other week. And so that's happening in the background. Hopefully I can, I can ignore most of it.
Ross Kenyon: Do you need to take a minute?
Josh Felser: No, no, it's good. I was able to do it a little bit when Paul was talking. So it's just funny that this is life, right? So let's go through, I think we should shift to just talk about product market fit a bit and especially think about what you've learned over the last year and I'm especially curious about any discoveries throughout the year that caused you, which I would imagine caused you to iterate on the product. And we can talk about it mainly in the context of demand, then supply, or whoever works best for Nori. But I'm really curious about what you've seen over the last year and what the major changes are to the Nori product based on what you've learned from customers and just on your own, doing your own research. Maybe Evangeline, you drive.
Evangeline Marzec: Yeah, absolutely. So we have gone from a sort of building to learn prototyping mode while we figure out how we link our demand in our supply and what each of those markets need that's quite distinct from each other, and are kind of shifting now into the built to scale mode. And so we did a lot of our core learning around kind of complexity and the difficulty of the science in our supply is a really strong link to the complexity that needs to be built into the product for the suppliers.
So if you think about marketplace at scale, like by definition, Nori needs to be able to work at gigatonne scale. So we have to be able to construct a marketplace that has an economy sized gross merchandise volume to work at that gigatonne scale. You need to establish trust between the two parties in that transaction. You need to have automation that works at that scale, both internally and externally, and be able to pull in data from all of the possible external sources and not be specialized. And then you have to have dynamic pricing that can link the parties in that transaction. And so what we've been learning is that there is a fine balance between what types of methodologies can ingest and how developed the science is and how developed the tools are that support the quantification and the verification of that supply.
And then on the demand side, we've understood that the folks who are buying carbon removals today are folks that were buying carbon offsets last year and five years ago, and they are used to an environment where they can't trust the supply inherently. So they have to have built up this whole expensive set of due diligence practices project. And now what Nori is trying to do is different than that. What we're trying to do is say, hey, we're going to go through this process that's easy on the suppliers. It takes the data that you already have as much as possible, fills it in with some really highly educated guessing and then checks it and verifies it. Then we've stamped something to the blockchain that says, "Now this is an asset that is standardized. Now you don't have to go through the expense of due diligence to buy it."
That's a whole lot of plumbing to put together for a team of 16 people. And what we have found is that our suppliers, well, they work in the field, you know, like people who are putting carbon into the earth with gloves on and not at desks. So there's a lot of [unclear] in their data and we have to work with them pretty explicitly and we have to work with partners really heavily to get in that data. And so what we're learning is how do we automate for our internal teams and take the burden off of our internal teams, given this real complexity on the supply side that's driven so much cost on the demand side. So that's what really we're focused on, particularly in the near term, is automating all the internals and actually reducing the footprint of our supplier experience so that it can be simpler and more robust and more horizontal.
Josh Felser: Can we talk about trust for a minute? 'Cause I agree that nothing will work in the Nori flywheel without trust. And how have you established trust over the last year? What are some of the learnings that have helped you shape the ways that you build trust?
Radhika Moolgavkar: Maybe I'll start with that because I think farmers, you know, it's a trust built relationship. I mean, I often hear how they engage in deals with a handshake and that's all that you need. You know, why do we need a contract? And I think the thing that we are trying to do on the supply side, like we mentioned in our values, like total transparency and honesty. So we have made mistakes, we have owned the mistakes. We also are always proactive in our communications and we have just a really good team that has good communications with all of our farmers in different ways.
We've also pivoted in the way we manage our relationships a little bit, so it's a little fewer individual relationships with farmers, but more with people who interact with the farmers, so the data piece is a little bit easier for the farmers, called data managers. At that same time, we ensure that we work both with the data managers and always have at least one or two touch points with their farmers so that we can explain things that we know cause them heartburn, if you will, like the length of our contract terms, need for property owners to approve of them participating in the marketplace. So I think we've just done a lot of work in listening to our farmers' concerns, creating content and answers and individual meetings so that we can address them. And then it sort of trickles out because as people, as these farmers who are early adopters, trust Nori and say Nori has gone the extra mile to work with me and to explain to me and to be honest about their limitations and their benefits, then you just see it trickle out as more and more farmers talk to one another and they're like, oh, we heard Nori is great. We want to work with you. And it's been sort of a self fulfilling prophecy. So that's how we've approached it, at least.
Josh Felser: So there's some softer intangibles that are part of this, and then there's some tangible iterations on the product. So what are some of the tangible product changes that have occurred in last year that help establish trust?
Radhika Moolgavkar: I'll let Evangeline take this, but what I will say is faster error fixing has helped establish trust. So once we got the product team up and running and we weren't, that was a huge piece in the farmers trusting us, but they're doing a whole lot more work. So I'll let her talk about that.
Evangeline Marzec: Yeah, I mean, there's good research that says that people who are working with technology, if the technology adds friction to the experience, will trust the results less. And so the approach that we've taken isn't to sort of do, you know, one big thing, it's to take a look at our entire end-to-end customer journey. We have that mapped out. We have very explicit points on it where there are friction moments for both our external parties, whether it's a partner or supplier, and for our internal teams. And what the product team is doing is literally going through our support tickets and determining what's causing friction and what's reducing trust based on those things.
Josh Felser: And it's funny you're saying that, you're describing a business situation that is 100% true for every relationship. The more friction there is in the relationship, the less you trust and it's gonna end, go someplace good. So it's interesting that you're using it in this context, but it's true in life.
Evangeline Marzec: Yeah, and it works on multiple different timescales. Like that can erode the trust in a relationship all up. It can also in a very granular level erode your trust in a single data point if you receive it immediately after friction happens. And so we recognize that there is a tremendous amount of uncertainty around the science, the future. There's anxiety that's produced around just why are we doing this at all? And what we as Nori want to be able to do is pair up our kind of human values and work as individuals who are empathetic, as well as go through a process with our product of reducing the amount of errors, increasing the amount of certainty, even simple, very, very simple things like making human readable error messages. And then again, reducing the footprint of our supply experience. I've told everybody on this call, the ideal supplier experience is no experience. It's just you've been paid. And so that's actually what we want to try to get to, is a more and more automated experience that is trustworthy, such that they can get paid and then we can go about the much more salient work of reducing the amount of carbon in the atmosphere.
Josh Felser: What about on the demand side? Let's talk about that for a minute. And trust on the demand side that you're going to deliver the kinds of offsets that the buyer is expecting. Alexsandra, a question?
Alexsandra Guerra: Yeah, I mean, well, the question really isn't so much like what type of offsets are the buyers trying to buy? It's who are our buyers, I think. Who is buying carbon removal offsets? Seen historically that it's been corporates, right? So let's talk about Microsoft, for example. Microsoft has, I mentioned them earlier, that they came out with their carbon removal commitment, and then they did an RFP and then they applied. We can get it. And so we sat down and we said, okay, why aren't we getting these RFPs? And we had gotten like four of them from different corporates, utilities, large tech companies, and somehow Nori was not just meeting the bill. And we looked at it and it's kind of back to what Evangeline had mentioned earlier. Nori's not trying to create these projects that are large, that have large volumes of carbon removal that an organization like a corporate, organizations such as Microsoft would do due diligence through all this process and say, okay, hey, that's the project we approve and we invest in over the long term.
Nori on the other hand is bringing in projects in a more automated fashion. And then every tonne that's removed from those projects that are ruled for a 10 year term minimum have those NRTs issued. So one NRT is a carbon removal tonne, issued once the carbon has been removed and verified. And then they continue to be issued from projects throughout the entire lifespan of that project. And so people can just come to the store and buy the apples. They don't need to know where they bought the apples, right? And NRTs being our apples.
And so we took a step back and I remember one of the questions when that happened, when Microsoft didn't, when we saw who Microsoft bought from and think there was some like hurt feelings like, "Man, what did we do wrong? Like, are we, are we feeling this out wrong? Are we not providing the right service?" Et cetera, et cetera. And I think essentially, Nori's advantage here is that we can provide NRTs or carbon removal to completely different segment that maybe corporates aren't placed to innovate. So I don't know if you've ever read Blue Ocean Strategy, but to me, providing offsets to corporates is red. Everybody who's a project developer of offsets is trying to sell to corporates because it makes a lot of business sense, but it's a very long sales cycle. They're looking for large volumes. It takes a lot of due diligence from them. They're looking for something different.
If Nori is commoditized in creating these really streamlined NRTs that anybody could buy, like individuals on our website today, well, how do we service, how do we find people who are wanting to access that type of carbon removal purchasing more quickly? So we just recently launched this month, the API pilot. So we're going to be piloting some of our assumptions on the requirements for an API where people can, you know, our organizations can plug into Nori's API to automatically pay for carbon removal, let's say, for example, at the point of sale. So when we're talking about customer discovery and all the things that we're looking at, it's these things like being very specific and intentional to define, are we talking about corporate customers, small, medium sized business customers, API channel partners or individual consumers?
Josh Felser: And would you say that the, and we're going to come to this, there's a section that we'll get, we'll talk about about channels. And so when we're talking about Nori today, the context for the product is mostly around SMBs and individuals, or also large corporates? I just want to make sure I understand.
Alexsandra Guerra: So right now we have sold to individuals. It's about one third of our volume goes to individuals and then two thirds of our volume goes to small medium sized businesses or small medium sized enterprises, for example. We haven't done a large corporate deal because these corporates are looking for things like our deals and projects, 100,000 tonnes and more. And our projects we've gotten to online, they've both been 14,000 and then I think it was 22,000 was our second project. So I mean that plus many other things. So right now we have been selling to individuals more on a passive thing like a brand builder. [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.]
Josh Felser: So as you have greater supply, that will unlock of an enterprise sale, but you're still working on growing the supply side and or meeting the demand from the supply side. You want to get on the platform before you go to enterprise.
Alexsandra Guerra: Yeah, we would have to probably expand to, I think, new methodologies if we wanted to start serving, like having an actual enterprise sales type of business model to meet the needs of those types of customers.
Paul Gambill: There's also, there's a little bit more to it. So Alexsandra was talking about the ways in which the big corporates think about these types of purchases. If you're a company who's been around for a long time and you've got lots of financial resources and you were buying offsets like 10 years ago, your biggest concern is around diligence on the project, making sure that you don't get one of those bad reports coming back that goes into the news about how some project you funded ended up not being real or verifiable or something else. And so in order to respond to that, they naturally started to put more resources into doing diligence on projects. So that means hiring more of a sustainability team and partnering up with consultants and then brokers who could source the projects for you, because how else were you going to find them, because there is no like clearing house type thing for those types of projects.
So those companies that have been doing this for a long time, they've built up all of this internal infrastructure for doing diligence and they think about it in like, I'm using air quotes here, but it's like they're investing in a portfolio of projects, which is kind of weird to think about it because when you're talking about carbon, it's just like, or at least we think it should just be like a consumable good. You pay for it, it's pulled out of the air, and that's it. It's not like you're investing in a company that's gonna have an ROI over time from it. That's just kind of the nature of how they evolve. But what Nori's trying to do is do a lot of that work for them: our transparent methodology going through peer review and making a lot of the information available about the projects. We have our guaranteed insurance mechanism built in so we can always make the buyers whole if the carbon is somehow lost. A lot of these things just kind of obviate the need for all of that internal infrastructure. It's just kind of the nature of being a disruptor in the innovation curve sort of thing, that that means that maybe those corporates aren't the right types of customers for us today, but they will be later. And so in the meantime, there are a whole heck of a lot of customers out there who are smaller, who have never had access to these types of markets because of the high middleman transaction costs. And we can go better serve that niche right now.
Josh Felser: We're going to stay on this theme of trust and we're going to go to Ross who's going to talk about how content can help build trust customers on both sides of the market.
Ross Kenyon: Yeah, I'd be happy to. And one of the questions I often get is why does Nori do this? That's a weird way to put it. But if you look back, I'm one of the co-founders and it's amazing. Paul, this is a hat tip to you, that when there's only a couple of co-founders, somehow I was one of them and it was also at some point being paid when we could have had something else. But I think if Nori is ever successful enough where there's a book, it'd be like,
Josh Felser: How did Paul know that content was important? Why did you take such a risk on it?
Paul Gambill: So back in 2014, when the company Gimlet Media was getting started, the first thing they did was record a podcast about building a podcasting startup. And I remember that catching fire like in the Silicon Valley scene and stuff. Josh, you're nodding. So maybe you heard that when that came out, but I remember hearing it and thinking, this is amazing. Like we're getting such a transparent look into how the company's being built. And it made me want to pay attention to what that company did. So I became a fan of a bunch of shows that they produced. And that was really when I started to get into podcasting in the first place. And so we know that carbon removal is really complex. We also know that crypto and blockchain is really complex and we put the two together. And so we knew that there is going to need to be an opportunity to kind of share that story and bring people along with it. So that was, that was the idea.
Ross Kenyon: And there's a version of doing that that is much more jerky than what we do. I feel like the vibe of the show, maybe this is me personally, but I used to have a really strong ideological map of the world. I used to have all the answers and then I sort of lost track of that at some point and fell out of it. But I think people listen to podcasts and they like the fact that it's intellectual without being hubristic. That we have people from different points of view onto, we ask good, hard questions of everyone. We oftentimes even have critics of what we do, or we talk about the issues that we're working through in a transparent way. I don't think that Nori currently has all of the answers for how to reverse climate change, even given the name, but it's one of those things that we're working through. And I think people can tell that we are genuinely intellectually engaged. And I think it does a lot of heavy lifting and it reaches more people. People are so surprised at how small of a company we are, given that the podcast is reaching a huge number of people. That's all I'll say about it.
Josh Felser: Let's, I want to make sure we covered all of the product market fit category. And has that, and we covered the supply side, the demand side, again not fully, but that's okay. We haven't talked specifically about some of the ways, we talked a little bit about some of the ways you're creating trust. You know, just how you're using third parties when you can for verifying and buying. And so maybe just, you can just, what has changed in that part of your business? Because I know there are new solutions to buying that might be easier or maybe less accurate. How do you find the balance between ease and accuracy when it comes to verifying the changes in the soil?
Radhika Moolgavkar: Josh, when we have that answer, I'll let you know because it's just not easy. I mean, I think that's right. It's not that easy. So obviously I was not with the company a year ago, but fundamentally, the quantification hasn't changed. We still work with Soil Metrics, commercially licensed version of Comet Farm. Their offerings and products are getting better, I think a lot because of all the help we give them with our projects that we enroll through them. So that is on that side. And then in the verification space right now, we are now moved up to have three different verifiers that we work with. The idea that eventually we have enough verifiers that they're competitive against one another and that drives pricing down for the farmers.
In the future, I do see a huge role for some of these technologies we've been hearing about. I think probably I meet with people weekly almost who have different types of remote sensing or satellite imagery or even companies that put probes in the ground who would all help to drive down the cost specifically around verification. The problem is that none of them can really prove to us that what they say happens from their tools, actually happens from their tools. So we have to figure out how to start ground truthing the data that we get from them. And so there's some interesting prospects out there, but we haven't gotten far enough to say, yeah, we feel comfortable that when you verify that, that actually is verified. But it is clearly the next big jump, I think, in the technology and a lot of people are working in that space and it'll be interesting to see. I think in about 18 months we'll have a whole different perspective on that.
Josh Felser: Yeah, and I just learned a new word. I'm not saying it is a new word. It's a new word for me, which is ground truthing. Thank you for that.
Radhika Moolgavkar: Yeah, sorry. I don't know. We use that all the time, but we got to make sure they're consistent, right? And they meet our uncertainty and our other things. And so not there yet, but I think it's looking pretty bright that it will get there soon.
Josh Felser: Is that, I keep hearing what I, hearing Nori talked about outside of Nori. There's a lot of conversation about establishing a baseline. And talk about that a little bit as it relates to the product and what your thinking is and how maybe how it's changed.
Radhika Moolgavkar: I don't know if it's changed at all. Paul or Alexsandra should jump in if I get this wrong. But the way I think about it from my specific perspective is it's part of our methodology really. And then what we're trying to do, at least in the US croplands and what I think we will replicate in other methodologies, is sort of create a historical baseline that what would have happened in the soil space, what it would have looked like if no practices had changed. So that's conventional practices. Then we compare that to what's happened because of the regenerative agriculture practices and how the incremental carbon stock has grown in the soil, and that difference is what becomes the NRT. So the baseline is really important, obviously, because it sets how low, if it's too low or too high, you either are saying you're storing more or too little incremental carbon. So getting it right is difficult, and we are always working to get it better, I think.
Josh Felser: So if I am going to ask you to grade yourselves a little bit, so you get to sit again, you choose who responds, but it's really to grade yourself. And so on the demand side, I guess it's Alexsandra. How would you grade yourself so far on your role on the demand side? I like the uncomfortable side, just pushing the uncomfortable.
Alexsandra Guerra: Yeah, yeah, yeah, like a B minus.
Josh Felser: B minus. Yeah.
Alexsandra Guerra: We happen to be going through our performance review process, right, right this week, actually. So live on the air.
Josh Felser: Right, he was at her salary, so just heads up, Alexsandra. Okay, so B minus, and you've only, you've been here, how long have you been in Nori?
Alexsandra Guerra: [unclear], so.
Josh Felser: Oh, you are? Okay, so you've been there since the beginning. So a B minus, and what would be the main area of growth on the demand side?
Alexsandra Guerra: Yeah, I think we're in the middle of this process right now, which is really focusing on talking to our customers and asking them questions and understanding their profiles, their needs, etc. Their expectations on how we sell to them, and then focusing on a particular business model. So right now, Nori is still in the very early startup phase where we do not have a scalable, repeatable business model. We don't. And so that is our focus. We have leadership buy-in and even some of our investors as well. And so that is our focus right now, to focus on understanding more about our customers than particularly we'll be selling to them. And that's why I would say we're at B minus because we were not selling very well. And we've kind of taken this, you know, like, okay, we'll take it what we can get approach, but now it's time to focus and say, hey, if we're going to be scaling, we have to find a repeatable scalable process. And so let's define those processes that exist right now and then pick one, focus.
Josh Felser: Thanks for that. Evangeline, what about you? How would you say, grade yourself from the product world?
Evangeline Marzec: The product team is an A team and it has tripled in size in the last five months. So given that status, I'm also going to go with the B minus, but I think that's good. I think that's an overshoot versus the C that we might have been. And I think we're acting appropriately in that we are moving from a very prototypy, very manual process and being very cautious and careful about what we automate and how we standardize, particularly since we know that the first big customer will set your roadmap way more than you expect them to. And so we are trying quite deliberately to test and pilot things like the API, things like alternate methodologies with manual processes. And that's going to create some churn and some load on our supply team and our support team. And so we then focus on fixing those support issues and unblocking our internal teams. So right now the vast majority of our focus is not on anything external, it's unblocking our internal teams. So we just relaunched the website and that gave everybody in the company the ability to make content changes themselves without relying on the product team and being blocked. So those are the kinds of under the hood, really detailed in the way changes that we're making.
Josh Felser: One of the things that as a founder, we would have these five page product priority lists and there was always this huge section which was just like, upgrading the infrastructure, and it always got punted and punted and punted because it wasn't like the front and center change until finally we could punt no more and we had to do it and we had to put other features on hold. So I appreciate the need to the infrastructure and upgrade it even though it's not always the highest on the priority list.
Evangeline Marzec: Oh, actually, I tend to think of it as the most exciting time is joining a company right at this stage, is where you've done enough experiments, you kind of know what's going to work and kind of know what's not. And now you can start the foundations that are going to get you to scale. So I actually think it's a great time to build the foundation and then pour in the gas.
Josh Felser: So usually it's the CEO that blocks the infrastructure.
Paul Gambill: As I was the CEO blocking it and the product lead was like, we need to do this. I'd be like, no, no, we need the shiny feature. So I take, you know.
Evangeline Marzec: One of the things that I came just even into interviews with is there's an iron triangle, the cheap, fast and good product development, you get quality, scope or time, pick two. And so for every initiative that we do, we pick which two we want. And we now, we're using a Kanban process, frankly, because time isn't the most critical issue, quality and scope, and that's what the Kanban gives you. So we shift back and forth, depending on the needs of the product.
Josh Felser: Really helpful to understand. Radhika, time for your self-report card.
Radhika Moolgavkar: I was hoping you'd forget. So I will divide my work world into two. I'm the supply, which I would say we're going to be plus A minus. I mean, I'm really proud. And I think very little has to do with me. A lot of it has to do with just having a really good team that has buckled down and like brought in a ton of supply in the last three months and just has really helped transition farmers into our system. So kudos to them for doing an amazing job. And then on the methodology side, I'm like, "Get a C," because we are really having a hard time. There's a lot out there, but there's not anything that quite right now we feel great about. So that looks like the manual processes to bring them in. They weigh on me heavily. I think about it a lot, but I don't think we have good solutions. So once I have the solution, I can move myself up to a B maybe. But for now, I'll save them.
Josh Felser: I mean, the good news is that you're tackling something incredibly hard for everyone. And so it's not like there's some magical company that has the answer. It's just you're figuring it out. So I think you're hopefully gonna figure it out in advance of other folks.
Radhika Moolgavkar: Thank you so much.
Josh Felser: We're keeping Alexsandra awake a little bit. I'm just noticing that yawn. See, I said I make everybody embarrassed. That's what I do.
Alexsandra Guerra: [unclear]
Josh Felser: I am and I'm nervous. All right, so I'm not gonna ask Paul or Ross to grade themselves because they're engaged, but I'm gonna ask all of you to grade Paul. I'm not really, that's a joke.
Ross Kenyon: Can we do that please? I want to grade Paul.
Josh Felser: I'm going to grade Paul. Let's do it. Let's do it live. Okay. Let's grade Paul.
Alexsandra Guerra: I give Paul an honest, genuine A minus. And that's just because he's new at this. So I think Paul's doing a fantastic job. And the best thing about Paul is that he always leans on other people's perspectives and asks others what their perspectives are, which is really important to a leader, because if you think you know everything, then you're definitely wrong. And so I appreciate the most about Paul. And just as a co-founder and the CEO, he's just been great. So solid A minus with a good attitude of continuous improvement.
Paul Gambill: That's probably a higher grade than I ever got. So I think that is wonderful.
Josh Felser: No pressure, but anybody else wants to grade Paul? I think Kristi should grade Paul. Just kidding, Kristi, I'm not gonna do that to you.
Ross Kenyon: I don't think we explained Kristi to the listeners, so I might just be like, who is this?
Josh Felser: I know, she's a mystery person. Anybody else wanna grade Paul? No.
Ross Kenyon: I already gave Paul a nice pat on the back for sticking his neck out so hard in favor of creative and communications and the importance of that to a business. Paul, I'll give you, I don't know. I know Paulie's an old friend. I'll give him a B minus. Give him something, give him a little to work for.
Paul Gambill: Yeah, don't build it up too much. I appreciate that. I mean, I was, to be honest with you, I was going to give myself an A because one, I have two jobs. First job is make sure we don't run out of money. So far, so good. Job two, build a team of talented people who are capable of delivering on the vision, and like listen to how awesome all of these people are and all of the progress that they've made since they've joined the team. So I'm like just thrilled with the way that we've been able to build out our teams to our last funding round. And that makes my job a hell of a lot easier.
Josh Felser: I was like, listen, how awesome are our people are, therefore I am awesome, by the transitive property. Is kind of perfect. It was kind of perfect. My daughter recently graded me and I won't tell you the grades, but the two areas where am I actually giving her unconditional love and am I creating a safe space for her? Those are the two things that I was graded on. And maybe if I do this again, I'll share the grade. Okay.
Unknown speaker: [unclear] criteria.
Paul Gambill: Yeah. Those are the two things that matter.
Josh Felser: You're given the two things that matter as a father. That's it. Those two things. You can't make your employees happy. You can't make your children happy, but you can create a safe space and love them.
All right. Let's move to, I want to talk a little more about, cause this has come up a lot and I'm going to bucket this in a different way just to talk about sales. And really, we can talk about it whoever you want to, but I'm really thinking about it from, is there a, what are the changes that have occurred at Nori, help you shorten sales cycles, increase the, you know, improve the funnel conversion. I'd just like to hear a little about features and maybe tactics that are improving on sales on the supply side and the demand side.
Radhika Moolgavkar: I'll start on the supply side. I think we are just getting, I don't want to sound cocky, but we don't have to work too hard. We have a lot of farmers who are really interested in working with Nori. And I think it goes back to some of the stuff I said earlier where we're establishing good relationships with key people in the community and then they are passing it out into the rest of the world. I would also say Ross's podcast helps us and we, you know, we too many farmers right now than when then what we can work with and that's why we're trying to develop systems and processes to get more of them in, but so far, fingers crossed, not a lot of effort. And we do present a lot. We get asked to present at a lot of different, which again, I think just goes to the power of the podcast and the relationships we've developed.
Josh Felser: So it's both the challenge and the opportunity. I mean, you're challenged by onboarding them. You see the opportunity. But if you don't figure it out on board them, you know, in a reasonable timeframe, they will go somewhere else. And so I appreciate that you feel the urgency to make this happen. Can you just, what are the, you said this before, but before you switched to the, maybe to more on the supply side and then the demand, what are the three most important reasons that a farmer wants to be on the Nori platform?
Radhika Moolgavkar: Well, my top three are one, we pay pretty quickly. We have, as soon as you make it through our marketplace, you get paid, which other places are not like that. I think the second thing that we do is we are our contract term, even though in some cases people want this idea of permanence for our farmer, 10 years is about as far as they're willing to go. So I think that that is a really important piece, that we understood their limitations and have acknowledged them in our contractual requirements. And I think the third thing, which we haven't touched upon much, is we don't own their data. We are very clear that the data is yours. You can do with as you want it. We just use it for the modeling. And I think a lot of these other companies are making data plays in ways that maybe farmers aren't kind of understand, but the contracts are complicated and things. And so they just appreciate our transparency and that we're just about carbon removal and nothing else. I think those have been our sort of secret weapons.
Josh Felser: Let's shift to the demand side. And I guess that's Alexsandra again, but anybody can respond.
Alexsandra Guerra: She's on the move. I had to move because the dog was freaking out about chewing something and it was making a lot of noise. So, demand side, so we have this pretty good process of mapping out what it looks like to sell. So when a buyer hears of Nori to the point that they've purchased from Nori to the point that they become a recurring customer. This is our sales cycle that's mapped out. And we actually get board updates based off of this. Like how well are we able to free up the friction points across the whole process? Part of Ross's job that's been really great, and Kristi who's invisible, been to help to educate more with the content that we're creating, answer the questions or share the knowledge that we have internally that we haven't been sharing so well externally, like about permanence, about what makes a carbon offset real or not, is it unique, permanent, additional, et cetera.
So we've cleared up, let's say, the first half of that pipeline. It's gotten a lot smoother. We've also hired a sales rep who's actually the perfect first hire, so back to hiring and values. He's just perfect because he's able to now switch to this customer development process where we're focusing on learning more about our customers than on the sales side, and he has the skills to do both. So that's where we're at right now, is we're keeping an eye on that sales process, trying to improve it, decrease the friction points across the whole process to buying. And then also learning more about our customers so that we know which one of those sales processes, because they are different for each one. It's different for corporate as it is for an individual, as it is for a small, medium-sized business or an API partner.
Josh Felser: But the focus is really, is mostly on SMBs, is that the primary focus at the moment?
Alexsandra Guerra: You know, it was, and then I think right now it still is on the sales side, if we're actively doing outbound and it is our most active inbound. For the most part, we are trying to be asking more questions than selling in the next six to eight weeks, because we want to really start scaling. So we could start taking sales and doing things that we have been, as we have been, the inbounds that we can. There's no repeatable, scalable sales process right now. So we're trying to find that so that we can fine tune it and then go full force on it. And it might be the API. So might have to do another one of these podcasts in like two months and talk about the API. What do we decide on our business model?
Evangeline Marzec: Well, and honestly, we have no lack of inbound interest on both sides of the marketplace. You know, like Alexsandra opened up the API pilot, I think through a newsletter, and within a week, we had, I think, dozens of applications for it. And we're able to pretty quickly segment out several different segments of demand for it. So I think we are just a small team trying to be cautious and nimble. We really do have a tremendous amount of pent up demand on both sides. And what we're trying to do is just increase our own velocity. And that's what we measure internally.
Josh Felser: You use NPS scores with farmers or buyers?
Evangeline Marzec: So because it's a marketplace and the ideal experience is no experience, we don't use NPS as a score. We do use NRT velocity, which is to say how long does it take to get from the time that a supplier enrolls until the time that they get paid from their carbon being sold. And so our goal is to reduce the time by reducing the friction.
Josh Felser: You're obviously all very proud of what you have built, even though you're very humble in your grades, except for Paul, who gave himself an A. So I'm still going to ask, I want Kristi to grade herself too. I'm just kidding, Kristi. This is going to be a theme.
Paul Gambill: Can I give Kristi a solid A? Kristi is our marketing coordinator and Kristi finds things that need to be done and just gets them done without any of us even thinking or even being aware that they needed to get done. So she's our newest hire and is just absolutely killing it. So thank you, Kristi.
Kristi: Thank you guys. I just wanted to point out I didn't know I'd be involved in this call. So this is very funny to me that I'm being roped in, but thank you so much, Paul.
Josh Felser: Well, Kristi, I actually have to go. I'd appreciate it if you can take over as host. If you don't mind, host us.
Kristi: Would you like me to take over as the father of your child as well?
Josh Felser: Yes. See, I knew you could do it. Bravo. [unclear] No, we're not. So quick. OK. What have we not talked about around product and the main change in the last year? And we'll have, at the end, we're going to have a moment to talk about kind of opportunities, challenges, but I just want to make sure we've, this is, you know, partially a chance for you to share what you're proudest of. I want to make sure we're capturing side.
Evangeline Marzec: Well, what we haven't covered is tokens and Nori's approach to crypto. You know, so we are both like a carbon removal marketplace and, as we get to launching it, a token cryptocurrency. And so we, well, Paul, I think quite wisely chose the strategy of the company is to first to get the carbon side working and then get the crypto side working. We do use the blockchain as a core part of that trust mechanic so that we can't have double counting impact our marketplace. And so that there's always a record and that those are always transparent. But what I'm excited about is the tokens. Paul, do you want to take away from that?
Paul Gambill: Yeah, I'll elaborate. So what we've been doing so far is rebuilding carbon markets from scratch, because one of the problems that we first identified when we got into this industry was carbon markets and carbon removal fundamentally supply constrained. There is nowhere near enough supply to meet not only the demand today, but definitely in the future. The obvious evidence for this is that like recently Amazon and Apple have made big commitments on, can't remember the exact amounts of money that they're putting in, but it's a lot of money towards basically reforestation projects. And they partnered with the Nature Conservancy and Conservation International and so on to do it, because they have to do this themselves because they can't just go out and buy this as a commoditized product anywhere. So that should make it very clear that there's not enough supply. And if you look at the total history of carbon credit markets, the total number of carbon credit is ever created, setting aside for the fact that most of them are junk and a complete waste of time and money, there's still only four to six billion tonnes. We emit globally about 50 billion tonnes of CO2 equivalent every year. So if we're trying to deal with the problem from both decarbonization and carbon removal put together, it's clear that we're going to have to scale up on the supply side quite a lot by several, at least two orders of magnitude.
So the problem is that the way that the existing carbon offset registries are set up is all of the fees that they charge, they're all nonprofits, their revenue comes from fees that are charged, like registration fees, listing fees, transaction fees, and so on. It's fine, I'm not accusing them of anything. They had to build something from scratch in an even more difficult situation than we've had. So all respect to them for that. If we're trying to scale up the supply side, we have to remove the barriers to entry on the supply side. So that's why we had to build our own methodologies, create this product in a way that makes it like truly sustainable, lowers the cost of verification and so on. But that's just one piece of the puzzle, because the other piece is figuring out how should the marketplace of value on what it is that they're buying. And today the prices that buyers, customers in the Nori marketplace are paying is a fairly arbitrary price being set by the farmers themselves. And that's fine for getting us off the ground, but what we want to know is what's the true value to the customer as well as the value to the seller as they're selling this commodity good.
So that's the role that the Nori token is supposed to play after it's launched later, later in our roadmap. Our objective is to try to get this token launched later this year and being incorporated as the method of payment for the NRT. That's the Nori Removal Tonne, the actual branded asset that we sell. And the price of the Nori token as it trades should become the reference price for carbon. So the cost of one NRT will be one Nori token, and the Nori token price will float relative to actual supply and demand. So this is like the real thing that we've been trying to build to and everything up until right now has just been infrastructure. So I'm really, really, really excited about this because this is going to be the game changer. This is going to make it possible for true scaling, especially on the supply side, but also on the demand side because oftentimes companies are sort of in analysis paralysis because there are so many different options of offsets out there and they don't know what they are or what they should cost or where they're from or anything else like that. And we're trying to make this as simple as possible to say, look, this is the price as determined by the market and here it is ready for you. And here it is packaged up in an API so you can incorporate it into your own platform. And that's the long-term vision of what we're trying to build here. So I'm super excited that we're moving on to the token development stuff.
Josh Felser: That's great. And farmers just get paid.
Paul Gambill: How it should work, yeah. And farmers and then kelp farmers and forest managers and direct air capture facilities, whatever it is, this has got to become simpler and more automatic so that they can build it into their business models and forecasts. And that's what makes it possible to scale.
Josh Felser: I want to know when the first soil NFT is going to hit the market.
Paul Gambill: Well, I mean, you can think of it as we've already done that. Like that was 2019, because the NRTs that we sell are actually technically under the hood ERC 721 NFTs on Ethereum, because when the [unclear], one of the things that we were trying to do is solve the double counting problem, and the history in carbon markets is them or design them in a way that the carbon credits could trade, because they wanted to have a commodities market built around this for the same purpose of having price discovery. But that also means that if the carbon credit is being sold from one person to another person to another person, they're just pushing a piece of paper around. It's the same tonne of CO2.
So it's our belief that every new dollar or unit of currency spent on carbon should result in net new carbon coming out of the air and being stored. So when the NRTs in our market are sold to the buyers, they're immediately retired. They cannot resell them. And in blockchain terms, you would say it becomes non-transferable. So it actually is an NFT for soil carbon.
Josh Felser: I'd like an NFT, I want to own the tomato plant sitting in my own [unclear] somewhere that's at this longitude and latitude, in tomato plant.
Paul Gambill: Now that's cool. And I don't know if anyone's working on that, but I would be pretty neat.
Josh Felser: Yeah. Right. Right. Okay. So let's move on to just, let's just talk about the competition for a second, because that's, you know, it's relevant to think about. I, you know, as a CEO, you know, I was probably a little too obsessed with it versus just focusing on what we could do. And so I'm curious how you think about the competition, who's doing what, who do you admire? Who do you think is ruining the industry? Let's have an honest conversation about the competition. Who wants to go? Start and then paint the landscape. Because if no one answers I'm gonna ask Kristi to talk.
Paul Gambill: We actually do have an internal Notion page where we kind of draw this out for our employees, but we don't have any direct competitors, but we do have competition in different dimensions. So one of those dimensions would be those carbon offset registries because we compete with them in terms of sourcing supply. We have our own methodologies for measurement and verification, as do they. They don't have this kind of end-to-end marketplace, they certainly don't have an API, there's no price discovery mechanism, so they're more about the protocol.
There are other soil carbon companies, so our most well-known competitor in that space would be Indigo Ag. And so we compete with them in terms of finding and acquiring farmers who are committing to remove carbon and then enroll and sell through the marketplace. Indigo's are a little bit different because they're not a marketplace. They're acting more fundamentally like a broker. So they go into a relationship with the farmer, then they're selling their carbon on their behalf.
There are a whole bunch of companies that can range from competitors to collaborators in this current climate tech cohort, ranging from, you know, we've partnered up with Joro, which is a consumer carbon footprint calculator, and there are companies like where I'm quite enamored by Pachama and their technology around forestry management and stuff. And I really look forward to the day when we can collaborate with them in terms of verifying forestry projects. So there are companies like that. And then there are these efforts that are kind of being undertaken at the nonprofit policy level to build international carbon markets or consortiums that are trying to develop their own infrastructure for that.
Ross Kenyon: Ultimately, it's all team reversing climate change. We just maybe all have different views on how to get there. So values are fairly aligned across the board. And it's kind of fun being in this industry where there is a lot of channel talk between all of these different types of organizations and kind of sharing ideas, passing around, trying to figure out, are we competitors or can we collaborate, and being fairly open about that. [unclear] And this is, I'm gonna try to earn my salary today talking about HALAC and assuming best intentions, but we do try, even sometimes it hurts a little bit where you're like, are we being [unclear] or manipulated in some way? I would rather take the risk on being naive, I think, than being hard and closed off. And I think we do err on that side for better or for worse.
Josh Felser: I think just to that point, I think back in the, you know, I'm dating myself, but kind of like the nineties when internet tech was actually happening, late nineties, I think there was a lot of collaboration and it really helped the internet take off. Without that, if everyone had sharp elbows back then, I think it would have slowed things down. But everyone collaborated because there was a lot to go around. And I think in the climate space and in the offset world, I really feel like we, I am hoping we can hold on to this collaborative phase because it will help evolve the whole category into the stratosphere. And if we go to sharp elbows too fast, I think it'll stunt.
Evangeline Marzec: Yeah, I kind of see the landscape risks, if you call it that, as one, unspent dollars because carbon removal is hard to buy, and two, the sort of regulatory risk of sort of fiat decisions that can impact our market. I am far, far less concerned about competition for exactly the reason that you stated, that all of us, it's in our best interest to collaborate because no one of us has a big enough marketing budget to solve that first problem.
Josh Felser: That's right. And I think to that, explaining a lot of times like this is to what some of what Ross does, is you're educating in a massive group of potential customers about crypto will work with offsets, and it's a percolating task. If Ross is the only one doing it, right, with his, with the content that you're creating alongside the team at Nori, it's going to be a much harder process. So it's like one of those moments where we get people, more people that are talking about it in the industry, the easier it's going to be for Nori to, you know, kind of do what it needs to do. Is that kind of how the team views the world? Is there a different worldview that you have?
Paul Gambill: That's fair. I mentioned Indigo as a soil carbon competitor, but Indigo put soil carbon on the map when they announced their Terraton Initiative in June of 2019, I think. They're a much later stage startup than we are, and they raise a lot more money than we have. And so they have like useful marketing budget that's out there convincing people of the potential opportunity in soil carbon. And it's really changed the landscape at the federal policy level too, I'm sure. Like there's, I am positive that the way the USDA talks and President Biden and administration talks about soil carbon is in part influenced by the impact of that marketing investment that Indigo made. So like we all benefit from that, certainly.
Josh Felser: So 10 seconds, everyone on this call, including Kristi, I'm going to do everyone this call. This is everybody. Single biggest opportunity, single biggest challenge for Nori over the next 12 months. Let's start with Radhika.
Radhika Moolgavkar: Token launch, single biggest opportunity. Single biggest risk, somebody doing something really wrong in the space and tanking the category.
Josh Felser: Evangeline.
Evangeline Marzec: Token launch, token launch.
Josh Felser: Ross.
Ross Kenyon: Interested in how future methodologies will be developed, how to incorporate them, how do we know which ones we want to incorporate and why in comparing against them in a marketplace that is set up for commodities.
Paul Gambill: Token launch certainly biggest opportunity. Biggest potential risk other than our token launch is from a regulatory perspective, which we kind of talked about earlier, like potential for coming in and like the need for private markets. However, I don't think that that's very likely to happen based on their comments so far.
Josh Felser: And Kristi, you're the newest. So I actually really, I really do wanna hear what you're thinking is on biggest opportunity, biggest risk.
Kristi: I would say with the token launch, just communicating transparently and clearly with individuals and other businesses and making sure that we kind of get that communication right, because that's going to be really critical to how we're perceived and how other businesses who are trying to accomplish similar things are perceived.
Josh Felser: And what would Alexsandra say if someone can maybe answer for her? Okay Ross. You can do it Evangeline, you think you know.
Ross Kenyon: Probably that we don't know our product market fit. Alexsandra is so hardcore on customer discovery and like really like almost, almost in a pedantic, but not in a bad way, but like a good pedantic. Like she really hammers at this. And it shows results and we're so grateful that she does it. I think that's probably what she said. Do you guys agree?
Evangeline Marzec: Yeah, if I can channel it for a second. Repeatable scalable business model. That's what she would say.
Josh Felser: That's great. So what I'd love to hear, so this is for Paul, when will you be able to have an all hands event and what is your ideal all hands look like, like in person again, post pandemic?
Paul Gambill: Well, we actually about like three or four weeks ago, we had the first one and Radhika organized this because one of our employees is pregnant. So we put together a baby shower in a park and coincidentally, because a bunch of the people that we've hired are coming from out of state and they're planning to move here. And so they were all kind of coordinating to be in town to start like apartment shopping and that kind of thing. So we had that for the first time. There was a pinata and there were tacos. It was great. It was just so fun to be around in person. And we're slowly starting to get back into our office in Seattle.
Josh Felser: What will the next thing look like?
Paul Gambill: Well, we're entering summer. I can't wait to do like summer activities and like barbecues and stuff outside. I think that'll be pretty fun.
Ross Kenyon: How are you going to do a turtleneck in the summer though, Paul? That's my contribution.
Paul Gambill: I told you about my wardrobe shopping the other day, Ross. I will plug something that I haven't talked to the team about before, but I can't wait to do it. Have you ever heard of WhirlyBall? It's like bumper cars meets jai alai. And I've done this before at previous jobs I worked at. It's like 20 minutes north of us. I can't wait to go do that. It's so much fun.
Josh Felser: I'm going to come up for that.
Paul Gambill: Yeah, you should. And we actually have also been discussing field trips to a regenerative farm and also building a direct air capture unit benchtop style in the office.
Ross Kenyon: And I just know with the company, like, can I say it? Yes. They're doing some really cool work, turning CO2 and pumping it into a greenhouse. Like there's all sorts of cool stuff. I don't know if that'd be carbon removal in the end, but like it's really cool. And it's shellfish farms too. So there's a lot of that near us in Seattle. Field trips.
Josh Felser: Anything else before we close up?
Paul Gambill: When we do these like internal Nori podcasts, we found it like really helpful for when we're hiring people and it kind of gives you an inside look at like how the company is working, who the people are here who work here, like what we work on, how we work, what our values are and stuff. [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.]
Josh Felser: Awesome. I really love this insight that I just got into Nori and also into the people at Nori because I, you know, it's, I don't get to meet with everyone ever. And so this is, it's really great to meet all of you and to learn about you, even in the context of what you're saying about [unclear]. So I really appreciate the enthusiasm with which you have embraced this mission that you're on. And thanks for sharing today.
Ross Kenyon: Thanks for stepping into interview us. That was surreal and also fun. But thanks for helping us, Josh. It was an amazing time. And if you're listening, send it to a friend, give us a great rating and review on Apple Podcasts, do what you do, and thanks so much for listening.
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