The Exchanges

Q I think you said better, cheaper, and faster, faster, better, and cheaper. We're still producing more, and it does seem to me like you produce more, you're using more resources, so How does producing faster, better, and cheaper if we're going to be producing for a planet, you know, again, that's not going to take these mitigation efforts on their own. We know that. How does that solve the problem?

A Yeah, this, um, this gets to a first principles of physics question, and also one, um, where we talk about, uh, leverage or productivity. So the key term to think about is productivity. Productivity is this basic principle that defines how much unit of output you can get per unit of input, okay? So if you can change the productivity of doing something or making something by a significant fold, You can make it cheaper and make a lot more of it. I'll give you an example. Today it takes 30 units of energy to make a unit of beef. Ok, so if you measure beef in terms of calories, to make one calorie of beef takes about 30 calories of energy across the whole system. And it also takes several years because you have to grow corn and then you have to move it to feedlots and feed cows and then process the cows and ship them to the restaurants. So you're moving molecules around. You're using a lot of energy. So it's about a 30 to one energy conversion ratio. So what if, and what is beef? Well, beef is just four elements, carbon, hydrogen, oxygen, and nitrogen primarily. So if you can take those four elements and reconstruct them in a smarter, cheaper, Better way into the cells of beef, into the protein of beef, and it's chemically identical. It's the exact same thing as beef. You just didn't happen to use the whole cow to make it. And you could only use, say, five calories of energy to mak…

AI assessment note: “defines how much unit of output you can get per unit of input”

Q lives in front of us, then this idea of taking human behavior, human action to help this far away problem of climate crisis seems unlikely. So I'm kind of curious, like what your perspective is. Can we leave it to people's behavior changes? To help get us out of this crisis, or is it more of a technological solution? Then maybe we come back to this faster, better, cheaper idea.

A Yeah. So, um, we've never saved the world by assuming that everyone's going to do good together. Okay. And humanity has faced existential crises, uh, for 200,000 years, right? Like, um, I say humans were roaming the plains of the Savannah without any food. Uh, and we were just eating scraps that were left for us on the ground, and eventually we figured out how to engineer the earth to make food for us, and that was the dawn of agriculture. Um, and it wasn't this, like, collective let's all eat less effort. Folks ate what they wanted to eat and ate what they could get their hands on. They didn't take food and not eat because other people were hungrier or more starving than them. Social consciousness, um, makes everyone a socialist Um, in a nuclear situation, meaning, you know, you will give stuff up for your family that you live with. You will maybe give some stuff up for your neighbors that you live on the road with. And then as you start to get wider and wider, you start to care less about those people being taken care of by you. In fact, those are the folks who are competing for resources against you. So every human has this innate Drive, um, called desire, and desire means I, I want to have what I don't have, and so you always observe that which is in the world outside of you, and there are things that you see in the world that you don't have, and you say, I want to have tho…

AI assessment note: “we've never saved the world by assuming that everyone's going to do good together.”

Q high. And Impossible Burger, uh, has done layoffs and, uh, laid off more than 20% of its staff. These are some of the poster children. This is coming from Derek Thompson's Plain English Podcast. What's your perspective on where this, this sort of cadre of companies sit right now? And do you think the market will have appetite to, to fuel the type of stuff that you're, you're betting on?

A Yes, especially in these current conditions. Yeah, so I'm not a, so the problem with Impossible Foods and Beyond Meat and companies of that ilk is that they charge a higher price, um, than the alternative. So ground beef, you know, three bucks a pound roughly. Um, Beyond Meat, Impossible, or like two to three to four times that price. So I've always been negative on these businesses. I've never invested in them, and I've been, um, You know, when, when people have approached me about investing, I've said no. And I, uh, you know, people said I was an idiot when Beyond Meat stock went through the roof. I'm like, I don't know, man. I don't think this thing's gonna last long term. Um, just a matter of time, because there's just a fundamental consumer behavior that will emerge over time. That'll win out, which is if it's not cheaper and better, they're not gonna want it. So, you know, five percent of people or 10% of people call themselves vegetarian. I'm vegetarian. I've never eaten meat in my life. So You know, I don't have a, I never know. I don't have a desire to go eat like a Beyond Burger or Impossible Burger. Um, you know, it's got a lot of coconut oil or other kind of deeply saturated fat. So it's, um, it's also not healthier. So the reason people buy it is to feel better for the planet and to make some kind of, you know, um, conscious decision, um, and feel better about them…

AI assessment note: “the problem with Impossible Foods and Beyond Meat... is that they charge a higher price”

Q of things. And you're particularly focused on the agricultural side. How do we bring technology to bear in order to make us more efficient when it comes to farming? And I'd love to hear a little bit from your perspective of, um, what's going on with one of the companies that you're involved with Lavoro and how that actually helps solve some of these issues that we're, we're talking about.

A So, um, when you look at where global calories are produced and consumed by country, um, you kind of see countries that are importers and countries that are exporters. Um, you know, countries that don't make a lot of calories because they don't have the land to do so, to make their agricultural system can't support it. Um, they have to import. They have to buy, uh, buy food. Uh, so countries like Tunisia, Egypt, Somalia, Ethiopia, much of the Horn of Africa, huge population base, net importers of food. Then there's places, um, and then the biggest exporting market is Brazil and Latin America. So the U.S. is the largest agricultural products exporter, but we're not really growing that amount very much. Um, where it's growing the most is in Latin America. So Latin America is big fertile ground. Unfortunately, so much of it is or was rainforest land, which is There's now a lot of restrictions that are prohibiting the continued kind of growth into the rainforest, but with just the land that's not rainforest today, there's a tremendous amount of calories being produced, and Latin America as a region exports twice as many calories as the U.S. So the Latin American market is growing, and the farmers down there are becoming very sophisticated. You know, they make nearly 10 times as much profit in terms of their margin, their operating margin, as a U.S. farmer. Um, and they're typically…

AI assessment note: “help them make decisions on what to do with their farm, what technology to use”

Q word, also four letter acronym, but yeah, it's, uh, and actually maybe one of your buddies has been, uh, has been part of, uh, the reason why people aren't so excited about it anymore. So, um, maybe we can talk about that, but, but yeah, I'm just kind of curious why a SPAC and, and what kind of interest is there in the business world for these type of companies?

A Yeah. Well, look, I mean, SPACs have become a four letter word. That's why I say that it's kind of a joke in the markets. Um, when you meet with public market investors, like no one wants to touch a SPAC anymore because so many of these collapsed after people de-SPAC, after these mergers de-SPAC. And that's because so many of the companies that went public, Ended up being, um, you know, zero revenue or low revenue or low margin businesses that had many years ahead of them still. They, you know, some people will joke there's a reason, you know, the public markets have had their, um, you know, their kind of, uh, requirements for someone to go public historically because the public markets can't really stomach, um, what venture capitalists typically fund, uh, which is long range. Uh, sometimes capital intensive business bets, um, that take a long time to prove out.

AI assessment note: “no one wants to touch a SPAC anymore because so many of these collapsed”

Q for one more question about fusion? So I think the big, the big question underlying all of this is, can we also become more efficient when we use energy? And you're a big proponent on, uh, basically switching to fusion. Can, so can you talk a little bit about, or, or enhancing our use of it? Can you talk a little bit about that solution and where it gets us?

A Yes. So, fusion, um, Uh, fusion is what goes on in the sun. Uh, so, uh, protons, uh, fuse and form, uh, so, you know, hydrogen is one proton in the nucleus, and when, you know, those two protons, uh, get enough energy and jam into each other, they actually fuse, and they get stuck together, and they become a helium nucleus, and helium has two protons. Um, and so you have to have a lot of density and a lot of energy. To force those protons close enough. And the reason is under, um, the laws of physics that the weight of two protons stuck together is less than the, or the mass of two protons stuck together is less than the mass of those two protons floating around alone. And the difference in that mass is the energy that is released when they're put together. So that, that is the physics, the E equals MC squared physics, uh, that actually drives the, the core of fusion energy, uh, As a, as a source of energy. So how do you get two protons to smash into each other? They need to be really close together, firstly, which means really dense, and they need to be moving at a really high speed, which means high energy. So how do you get the kind of density and energy needed to make this happen? Well, the only place we see it happening is in the center of the sun. It's not even the outside of the sun. It's all the way in the center of the sun where this is happening. So fusion aims to rec…

AI assessment note: “use that energy to make electricity”