Startup Series: Prime Roots
Today's guest is Kim Le, CEO & Co-Founder of Prime Roots.
Kim a scientist-entrepreneur-foodie and life-long learner determined to make positive changes in our global food system. Kim has been working in management within the food industry (retail, food service, investing) for over ten years and is determined to bring delicious, sustainable, and nutritious foods to the masses and increase accessibility and equity in our food system. She's a graduate of the University of California, Berkeley.
Prime Roots is a plant-based meat and seafood company creating better products for you and better for the world. Headquartered in Berkeley, California, Prime Roots is committed to positively influencing our food culture and reducing the hefty environmental impact of meat. Their delicious plant-based meat and seafood products are made using proprietary methods that combine cutting-edge technology with ancient techniques - resulting in better tasting and naturally textured market alternatives that avoid using hyper-processing techniques used by other meat alternative companies.
In this episode, Kim and I explore her path from her PhD to founding a startup, key priorities for Prime Roots over the next 12 months, and the barriers to creating and marketing a product heavily influenced by taste. We also discuss the various alternative meat bases, advice Kim has for founders and entrepreneurs looking to follow a similar path in sustainable food, and the startup's sources of capital to date. Kim is a great guest.
Enjoy the show!
You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded January 24th, 2022
In Today's episode, we cover:
Overview of Prime Roots and the origin story for the startup
What led Kim to become aware of the problem and then actually go to a lab to try and solve it
The process of bringing an alternative meat solution from the lab to the private sector and Kim's journey as an entrepreneur
The various approaches to alternative meat from cell-based to plant-based to fungi based
Prime Roots approach to marketing a product that is heavily influenced by taste which can be unpredictable
An overview of Koji as a protein alternative and how the product has evolved since Prime Roots first started
The importance of market size for each product category
Prime Roots sources of capital and its investors at each phase of funding
Advice Kim has for other founders and entrepreneurs interested in focusing on alternative meats
Advice Kim has for rounding out founding teams and what to look for when interviewing candidates
Key priorities over the next 12-18 months for Prime Roots
Future raises and alternatives to equity capital that could be viable for Prime Roots in the near term
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Jason Jacobs: Hey everyone, Jason here. I am the My Climate Journey show host. Before we get going, I wanted to take a minute and tell you about the My Climate Journey or MCJ, as we call it, membership option. Membership came to be because there were a bunch of people that were listening to the show that weren't just looking for education, but they were longing for a peer group as well. So we set up a Slack community for those people that's now mushroomed into more than 1300 members. There is an application to become a member. It's not an exclusive thing, there's four criteria we screen for, determination to tackle the problem of climate change, ambition to work on the most impactful solution areas, optimism that we can make a dent, and we're not wasting our time for trying, and a collaborative spirit.
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Hello everyone, this is Jason Jacobs, and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guest is Kimberly Lee, the CEO and Co-founder of Prime Roots. Prime Roots is celebrating the culture of meat by reimagining protein itself. Kim is a scientist, entrepreneur, foodie, and lifelong learner who's determined to make positive changes in our global food system. She's been working in management within the food industry, including retail, food service, investing for over 10 years and is determined to bring delicious, sustainable, and nutritious foods to the masses and increase accessibility and equity in our food system.
We cover a lot in this episode, including Kim's journey, what led her down the path of tackling the problem of food and agriculture and how it ravages the planet from an emission standpoint? We also talk about Prime Roots and how the idea came about when the light bulb went off that transformed it from an academic project to a company? We talk about the early days, the team makeup along the way, the balance between scientific expertise and commercial expertise, and the advice that Kim has for other entrepreneurs heading down a similar path. We talk about their capital raising, both to date and directionally.
We talk about the landscape of capital as you go up the stack and where Kim thinks the gaps and opportunities are. And we also talk about the crowded landscape of solutions and what's prevented solutions from cracking the code to date at scale? Who's been doing it well? Where the opportunities are? And, of course, the Prime Roots approach. Kim, welcome to the show.
Kimberly Lee: Thanks for having me.
Jason Jacobs: Thanks for coming. Rethinking, protein is such an important area for climate and Prime Roots has such an innovative approach, and I'm definitely still in learning mode in this area. But it's one that I, and I know lots of listeners are eager to learn more about. So thank you so much for making the time. I know you've got a lot going on.
Kimberly Lee: Yes, I'm excited to share more about my journey and how I got here and the importance of protein to your point.
Jason Jacobs: Sounds great. Well, for starters, what's Prime Roots?
Kimberly Lee: So at Prime Roots, we're building a whole platform off of Koji to make the best meat and seafood products out there. And so what we do is we're actually making meat from Koji, and Koji is a beloved traditional Japanese fungi. It's if you've had Miso or Soy Sauce, you've had Koji before. It's actually what is used to bio transform the soy into umami rich paste or umami rich sauce that we know and love in just general cooking. And what we've done is we've said, "Okay, so Koji can bio transform these materials. What about in and of itself?" So pure Koji. It turns out that Koji grows in this mycelium that is really, really fibrous and well textured identically to the texture of animal muscle fiber.
It also obviously produces these umami rich compounds that are also found in meat. And so what we do is we grow the Koji in a liquid culture, and after it's kind of like this texture of chicken breast. So from there, it's really this building block to build any type of meat in any type of seafood. And so with that, we can make all of our Koji meats quite simply. It's taking the liquids from the solids from that fermentation process, and then really treating the Koji like you would meet. It does most of the hard work for us, as we like to say, it has the fibers texture, it's high in protein. And so we really supplement it to really create different types of meat. So whether it be like our bacon or a lobster, it's just a matter of tuning the fat, the flavor, the color to really get it to a place where it resembles the meat that we know and love.
Jason Jacobs: And what's the origin story for the company. Where did the idea come from and when and give us some context on how this all came about?
Kimberly Lee: So Prime Roots started about five years ago and we came out of the alternative meat lab at UC Berkeley. We were the inaugural class and we were really just learning about the problem animal agriculture and trying to find solutions. So my co-founder, Josh and I, we're both biologists by background. We put our heads together to say, "Okay, so there's a lot of people out there trying to make meat from plants, but we know that plants are just extremely different from animals." And so you're always going to get a slightly spongy texture, little dry sometimes, mushy. It's just gonna taste like plants, so every time I try a new plant-based product, I can pretty much guess, is it soy? Is it pea? Is it wheat? 'Cause it tastes like plants 'cause it is. There are a lot of people also looking into a cell culture at the time too.
So, you know, how do we grow actual animal cells? And as biologists we're like that is going to take a really long time, and that's also probably not going to be scalable to solve this ginormous climate problem that we have. And really the stat that really got us really thinking about like Josh and I are both meat eaters, we're meat eaters and still are meat eaters and we call ourselves flexitarians. So trying to reduce our meat consumption, trying to make products, honestly, that help us eat less meat 'cause everything out there today is really based off of plants and it's not really made for people like us who eat meat. And so really the stat that really got us thinking was we were learning that animal agriculture accounts for more greenhouse gas emissions than all of transportation combined.
So that's like all the consumer and the business like freight, transportation like all the planes, all of it combined was less impactful than just this personal choice. An area that like we could actually make a difference in as individuals every day. So that really, really got us thinking, and then if you like dive into it, like I had friends who were vegan. I was like, "Oh, that's cool, you guys like animals. I like animals too, but I don't love meat too much." That there's so many reasons why to eat less meat and just really learning about the inefficiencies. It's like, "Why do we have to feed an animal 40 calories just to get one out?" That's like 39 perfectly good human food calories just wasted.
So really started to think first principles, how could we solve this problem in a more efficient way? How could we solve this problem in a way that actually checks all the boxes for us as meat eaters so that we'll actually want to make these simple swaps? We're probably never going to be vegan and we don't want to push veganism on anyone as well.
Jason Jacobs: It sounds like there's two parallel tracks here. One is the awareness of the problem and the stats that really got you and that kind of thing. And then on the other it's sitting in this lab trying to figure out how to address this problem and coming up with the idea for Prime Roots. So from a timeline standpoint, how do those intersect? Which came first?
Kimberly Lee: I'd say both at the same time. I'd call it more of like at the time it was more of a think tank where it's like, here, learn about this big problem and then really apply like first principal's thinking, which I like am very much a believer in to try to solve this problem better. And when you're in an environment where you're not pressured to, or have no timeline per se to actually like commercialize something or like make a business from something, necessarily, you're really able to ideate crazy ideas. Which, you know, at the time what we were thinking of doing growing mycelium for this protein base was a little bit crazy. And so it kind of happened together. Although, I like to think of what we do today, like using, building this Koji meat platform actually probably started 20 something years ago for me [laughs].
I mean, it's one of those things where like you connect the dots looking backwards, not forwards. Um, like I've been growing, my mom is a professional chef, and so I grew up in the food industry. So, obviously, like when I heard about this problem, I was like, "Oh my gosh, my whole life has been in food [laughs] and I just never thought about this and didn't know about this." I just felt really naive. And I started growing and fermenting Koji when I was four. Obviously, not in the same way we do it today, but I've been interacting with Koji, uh, in a very intimate way since I was younger. So when we were thinking of what are we going to use as the base as our protein? Naturally, I'm looking in the culinary toolkit first 'cause we're making a food company at the end of the day. I'm not trying to fit other types of technologies or applications towards a food product.
So that's super important. And Josh has been interested in science and technology from a super young age, given that his parents and are both science teachers. And so really it's been a lifelong journey to get here. I mean, going to Berkeley, a lot of people graduate feeling extremely disempowered 'cause all you do is learn about problems. The world is dying, there's wealth inequality, there's racial inequality. There's so many problems, and I didn't realize until the very end it's like, "Well, we're not, also, not going to be handed solutions." 'Cause if there were solutions, our really smart professors would be doing that. They wouldn't be here telling us about problems. And so that's why I absolutely loved my experience in the alt meat lab because we actually got to think about solutions. And then we were empowered to actually go build something to fix those problems.
Jason Jacobs: And when you were evaluating what solutions could be viable, were you doing so with building a company in mind? Were you set on building a company or was that kind of a discovery and a decision that came about midstream as you were evaluating this approach?
Kimberly Lee: It was definitely something that came after the discovery phase. I think it actually helps to not think about something and be pressured to make of something to be a company. There's a lot of basic research that still needs to happen to really propel every single pillar of alternative meat. Like ba-, self-based, plant-based, and fermentation base. And so I was actually going to start a PhD and decided instead to apply my research and my skills towards actually building a company. And so it was the same fundamental research that we had to do. But obviously the outcome was making a company.
Jason Jacobs: Maybe talk about that evolution? Was there a light switch moment or what point in the journey where you, where you became committed to making it a company? And what was the aha that led you to coming to that conclusion?
Kimberly Lee: I'd say it was a little bit of a snowball effect for us where being in Silicon Valley, we're based in Berkeley still today. And it was just a lot of opportunities being thrown at us. It was, "Here, talk to this VC, talk to that VC. Like talk to this researcher, talk to these people." And just like talking to people, everyone's like, "Wait, this is like kind of cool. Have you guys thought about raising money? Have you guys thought about like making this into a company?" And I think we just got propelled in that direction and we're like, "Wait, we can grow and scale our impact in our research way faster than if we were to go like the traditional academic route." And we would make a lot more impact and be able to really scale our impact like much faster. And that was really, really exciting to us, and looking back, you know, definitely the right thing to do 'cause we are most definitely scaling our impact every day.
Jason Jacobs: And at the time, as you evaluated the landscape, from the cheap seats here, it seems like no dispute about the magnitude of the problem. But from an approach standpoint, it seems pretty noisy. There's cell-based approaches, there's plant-based approaches, there's using this fungi or using that different type of ingredient. And consumers are so fickle that it seems pretty daunting in terms of trying to figure out which approach is gonna work and which approach is gonna work with consumers whose tastes seem, at least from my own [laughs] uneducated seed, impossible to predict. How did you think about the market at that time, Prime Roots aside?
Kimberly Lee: I think, to your point about consumers being fickle, like you're 100% right. At the end of the day, taste wins and product wins. Even today, I don't think that there's very many products in the market that are really good. I, over the holidays, was in Canada and I went to a grocery store. They have a whole different set of products there, and actually, they're a lot more advanced in terms of like the number of products, the like supposedly like the technology and the taste because a lot more Canadians, as a population, are vegan or vegetarian. And so I was like, "Oh, okay, let's go to this, you know, 'more progressive market' to see like what's out there."
So I think I went to Whole Foods and spent like $400 to own like plant-based meats, plant-based cheeses just to try it. 'Cause I've tried everything and [laughs] I think you last like five times over. And so I was shocked that over 90% of the products I tried were still "bad". And just thinking about my personal journey with this, you know, if I hadn't started the company, and every time I tried one of these products and they were bad, I would definitely be like disempowered and wouldn't, I'd be like, "Okay, like I have good intentions as an individual, as a flexitarian, but like I don't wanna eat this.
Tupaki and Boca burgers still taste the same way [laughs] they do a few years ago. And they're made really for vegetarian vegan audience. And I just felt that there weren't that many products that really like met me where I was as a meat eater. And I still think that to be true in the US market. So, yes, there's a plethora of technologies, and I actually do think that one of the biggest threats to the plant-based industry as a whole is actually itself being bad products coming out. And then "Me-Too products" are extremely detrimental 'cause if it's all the same bad tasting stuff, how are we going to get consumers to adopt these products?
And so if you look at like plant-based milks, it really was innovation in taste, it was innovation in the textures, the functionality of the plant-based milks that really catapulted things. Whereas like for a very long time, it was extremely static and just like almond milk, soy milk. But now obviously we have a lot more milks that function better. There's a whipping cream that actually whips, it's actually taste good. There's non-dairy milks that actually foam. So it's like really thinking about the functionality and that experience of meat than something that I think not very many companies have.
Albeit I do think that like Impossible has done the best job of that 'cause it, they have a burger that bleeds that literally changes color that can be used in like a meatball form or like a ground form. And so I really think that there's only one meat product on the market that has been able to do that. When you look at like the protein landscape, it's like a trillion dollar [laughs] industry with obviously a lot more than burgers and chicken nuggets.
Jason Jacobs: And so as you were evaluating the landscape and you said you went to Whole Foods and tried every product, which is awesome and great to hear that you're incorporating that market research so early, especially, as a couple of biologists that were setting out on this journey. I mean, you've been at it several years now. So with the benefit of hindsight, for anyone listening who's maybe also a couple of biologists that are sitting in a lab trying to figure out the best approaches to solve problems, how much of that market feedback, like what should the balance be between market or just inwards on science early on? Both from an expertise standpoint and in terms of where you're spending your time?
Kimberly Lee: I don't know if I can give the best advice here, but I can kinda speak to what we did specifically. We like dedicated chunks of time to doing market research and then going back to tinker and try to, to prototype and make something that kind of fit that niche. And then we would go out, sample that product again, talk to people again. And we've been doing that throughout the entire course of the company. And every single, you know, focusing of products set that, that we've done, every single change that we've made, everything we've done has been, on the market side and with consumers, has been really thought up from a very scientific perspective.
So we've conducted experiments. Like we just finished about a year and a bit of just online consumer testing where it's like truly like we designed an entire test that we wanted to do to test products, to test form factor, to test all of that. And so I'd say it's a balance. How we did it was kind of like TikTok, where it's like you do one thing and then you do another thing so you can focus on both. I know a lot of companies, they do it both simultaneously all the time. And I do think that both are extremely important and I have like the extreme privilege of having grown up in the food industry and having built food companies with my family. And so I have that business hot [laughs] that I could also channel towards all of those efforts. So I highly recommend like not being only in the lab and only tinkering, but also having that diversity of thought on the team as well.
Jason Jacobs: And when you first came to get excited about Koji as a component of a protein alternative, what was your thinking at the time about entry point and/or product portfolio and how has that evolved over the years that you've been in the trenches?
Kimberly Lee: So because we're building a whole new category, Koji meat, you know, hasn't been done before. What we have to do is validate, for the first few years of life, is validate that Koji meat and Koji protein could truly be a platform. And so to do that, we had to create a lot of different protein form factors. So everything from the ground, to a whole muscle. We've made so many different products over the course of our lifespan and really testing our platform capabilities. So can we tune textures? Yes, we now know we can make everything from really like a lobster texture, that's a lot more fine to a bacon texture. We know that we can tune the flavors. So, you know, obviously seafood and meats and even within those categories are very different and we know how to tune those. And so really proving out that we could build something huge off of this Koji platform was paramount.
Although, we think we saw pretty soon into that process that you could build something a little too big to actually build [laughs] in one go. And so what I mean by that is like we can tackle every single vertical within the protein space, and that is a trillion dollar industry. And you can't bite off everything as a business. And so the exercise we've gone through more recently, which we'll be excited to announce in a few weeks here, is really the focusing of where we're going to be applying our technology where we're uniquely best. Really kind of doing business school stuff, where you go through [laughs] and you do the SWAT and you're like, "Okay, like what can we uniquely do? Where's our space in the market?" So we're excited to be taking all of the learnings over the past few years and channel it towards a cohesive product direction going forwards.
Jason Jacobs: So what I think I'm hearing, and I'm gonna say it back just to make sure that my understanding is correct, is that you have been doing this market test iterate. But more, almost like puzzle pieces where it's not been a complete product but it's just been different building blocks, if you will, that you have not announced any specific products or categories in the market, but that you're gearing up to do so in the next few weeks. And that first offering is an entry point and that those building blocks can be used for a number of other offerings over time.
Kimberly Lee: Exactly, so there's a huge trap. Definitely when you're building a foundational platform is to build everything and be everything for everyone. But that is extremely hard to do. And if you look at examples like the Nestles of the world or the large food companies, they've built that over hundreds of years. And so like as an upstart, it's super important to find your niche. It can be a very big niche. I mean, most niches, even within me, are huge. Like they're multi-hundreds of billions [laughs] of dollar. So it's important to find something to focus on. And it's difficult, I think that's one of the most difficult choices that we've had to make as a company and learn over time is it's the things that you say yes to that will kill you, not the things you say no to. And so that's been an extremely important learning [laughs].
Jason Jacobs: And since your pre-launch, maybe I should ask you this question again in two or three years, but how important is market size as it relates to that initial product category and what criteria have you used when selecting that category that's still unannounced, of course?
Kimberly Lee: I think market size is important. If you're building something in a market that is so small, I think there has to be a way that, that builds towards something much bigger very fast and be cohesive to the consumer. And so we picked a market that is hundreds of billions of dollars. And so there really is no risk of it being too small or too niche. And for us, it was really thinking we like... I saw a lot of people's fridges and I talked to a lot of people about what they ate every day and what they had in their fridges. So it was really about thinking about the occasion of eating and how people eat and how and where we could easily make swaps. And, and I think that's the big thing for us.
Is it's not trying to replace every single meat product with our Koji meat today, it's encouraging people to make those simple swaps and empowering them to make those simple swaps by making something that is different than everything that's out there. So I can say for certain that we're not making burgers [laughs] and we're not, we're not making chicken nuggets.
Jason Jacobs: And from a funding standpoint, you've been at it several years and you, you're still prelaunch. How have you thought about capitalizing the company to date and what does that fundraising history look like in terms of staging, in terms of timing, and in terms of what types of investors you introduce at what phase? A- and also sources of capital in terms of equity versus any non-dilutive funding, if at all?
Kimberly Lee: We've only taken equity funding to date, and we did a pre-seed seed and then an A, and we'll be raising our B really shortly here. But we've raised usually in like two year increments, and so that's kind of like the trajectory we follow. We've only taken money from traditional venture capitalists. We have people from all across the board, from food, from technology, from hard tech, from people who scaled different technologies before that are similar to ours. So we have a really diverse set of investors, and I know it's like rare to hear this, but we actually do love [laughs] all of our investors and they are value adds to the business.
And we've been so fortunate every round that we've been able to be picky with who we partner with, and I think that when you're fundraising, it's just as much as evaluating the investor and building that relationship versus, you know, just taking money from anyone that will give it to you. So we've turned down a lot of capital over the years. And so for us, capital, because I think we're building something really big, something really interesting, capital hasn't been too difficult to come across for us.
Jason Jacobs: So I, I wanna pick up on something you said earlier about how, I might mangle the exact wording, but it was something to the effect of how the things that will hurt you the most are the things that you say yes to, not the things that you say no to. And we also talked about market size and the importance of that big entry market and about platform and how this could be applied in so many markets over time. For anyone listening who is either just starting out or maybe they've been toiling in the lab for years but still pre-launch like you, what advice do you have and what have been your key learnings in terms of when you do go to raise that capital? How big of a story should you tell versus how focus of a story given that focus is paramount, but you need to convince people that this can be huge?
Kimberly Lee: The, the classic, this is a question that a lot of our investors and board members have heard over the years. It's one of the most difficult question, and yes, we are technically pre-launched, but we have a fair amount of revenue and, and customers that we've actually tested product with at every single stage. And so we've actually never "we've never launched a product without people trying it". We've also launched like "tested the market" many, many times. And so I think it would be difficult to say, "Okay, I'm going to make a company in this like niche area or even the large area and have really nothing to show for it." Even if it's like a story that leads up to where you've gotten to that makes sense, I think it is really important for people to try the products.
And that's not just like an investor here or like a press person there. I think it's very meaningful to have actual like consumers choose to pick up your product and give you feedback. So that's really the main reason we wanted to do direct to consumer for a little bit was to get that feedback and to be able to literally email someone, pick up a phone and talk to people, get reviews. Like all of that was really important for us. And so it really helped us build like key insights to build towards refocusing of the product set. In the very first iteration of the company, we actually started in seafood, it was a huge white space. It still is a huge white space [laughs], and so we started as a seafood company and we were just prototyping.
Like we had a flaky salmon filet, we have different flavors of salmon, and it was great and it's a really big market. But as we were testing the product, we were saying like, "Oh, it's pretty polarizing if you like or don't like seafood." And the way you experience an alternative seafood product differs so much about based on whether or not you eat seafood frequently. We saw that if you had fish two or three times a week, a certain level of "fishiness" was noticeable and you liked it versus like that same level for someone who rarely eats fish was like a turnoff.
And we're like, "Well, we can't win here. There's so many different interpretations." And then half the people we talked to just didn't like seafood. It's a huge market though, don't get me wrong. If you look at it, I think seafood is like 40% of protein consumption, so it's huge. And then we went to our community and our consumers who were on our waiting list and we were like, "Okay, like let's ask the people what they want." And from that, we're like, "Oh, people don't really want seafood [laughs], although, they think of us as seafood. They really want bacon, like they really want meat." And so went to the drawing board and we made bacon and we sampled that. From that, we were like we talked to more consumers said, "What do you want?"
And the consumers are not gonna tell you exactly what they want, so it's really about thinking about what they're saying. Not like, literally, it's like, "Oh, I really like bacon. I don't know what else you guys could make. I just love how, you know, I can eat it and like I can cook it and have it on everything." And so there's like I want a protein that's versatile versus like I want bacon and I don't want anything else. And we should just keep doing bacon. So it's really being able to compile those insights from actual customers. I think is like our key learning. It's so hard to build in the vacuum and I don't recommend it.
Jason Jacobs: It seems like there's a bunch of choices when it comes to go to market. There's the DTC approach that you mentioned, there's a licensing approach where you're enabling big established brands. You can sell direct to consumer, you can sell through channel, you can go in through grocery, you can go in through restaurants. To whatever degree you're comfortable sharing, and I know you're pre-launch on the product direction, but it'd be helpful to understand your thinking. And also whether you can or can share in that area, it'd be helpful to understand what advice you have for other founders in this general category that are in your shoes?
Kimberly Lee: I think channel strategy is equally important to product strategy, which we've talked about. In terms of channel strategy, I think there's kind of two sides of it where it's like where does your product fit in ceremonially the best at first? And this is like our bias where we want to build the great experience around their product. And most categories, there's the option to like package it and put it on a shelf, which obviously, you know, there's many, many doors out there, many retailers out there. For us, at least, at Prime Roots, we really think about the occasion and the experience of the product. The experience of picking something off a shelf is to us a little bit unceremonious. But it is more scalable initially. So you can find a co-packer to help you put that product in the shelf. You can gain brand recognition through distribution.
It's a lot of what I would say most companies are trying to do. I mean, it does take capital, but it is more clean cut. Obviously, D-to-C, there are resources to get those types of businesses up and running today. You know, there's great platforms like Shopify, etc. Because there are a lot out more resources today than even like five years ago to start a D-to-C business. I think it really depends on how your product shows up best, and then I think also on the other side, the other 50% of this is like, "What can you, personally, as like a founder, contribute?" Whereas like your skillset, your experience best applied or like your team I think also. That is super important to the whole mix as well. Is like do something you know and do something where like the product is at the forefront and can stand out amongst all the other meat products out of all the other plant-based meat products.
Jason Jacobs: You mentioned that you have tested at all phases and that you have some paying big companies, it sounds like some paid pilots maybe from, from some larger established brands. One question I have is just how do you balance the validation that comes from the fancy logos, let's say, and/or the promise of big distribution with Paul Graham's whole thing about at doing things that don't scale? Like how much do you do the things that don't scale versus the things that scale exceedingly well in the early days?
Kimberly Lee: So to clarify, we've only tested with consumers directly. So we've only done things that they would call "don't scale very well" [laughs]. But it's testing the end consumer. So whether it is going to a retailer and saying, "Hey, we have all of this consumer data from consumers in your area or consumers of this profile type that is similar to your demographic that goes to your retail store. And this is what they say about the product." People are raving about it. It's a great case study to who your customer, your actual customer will be as a B2B company. And retailers love when brands have that data and have that direct connection to the consumer because the brand is going to help to drive traffic into the stores.
And the brand awareness is already there, so it's not simply being built via distribution. So I think that there's a lot of ways to build things that [laughs] don't scale within food, but I think the way that we've done it is the most valuable. We've been able to get the data. We still have tens of thousands of people who are dedicated and engaged on our mailing list, let alone our social media channels. So we've really been able to build a brand that people associate with like high quality, but consumers are excited to see what we come up with next. And we are innovative and iterative, and that's something people know to expect from us. So we're excited to move into this next phase where we are going after more conventional channels with all of those learnings. And there really are great data to insights and learnings from our testing.
Jason Jacobs: And you talked earlier about how you not only have the science background, but that given your upbringing and family experience, you bring both kind of the entrepreneurship and the commercial domain expertise, I'll say. How important do you think that commercial expertise is on the team in the early days and when does it become important? I mean, you happen to have it, which is awesome, but do you need it in the earliest days? If maybe it was a couple other founders that look like your team, but that didn't have that family upbringing.
Kimberly Lee: I think it's extremely important if you never worked in hospitality, you never worked in restaurants, never worked in food, you don't really understand how the supply chain [laughs] works that well. You can like theoretically read about it, but the problems and the pain points and like how consumers are demanding these products is hard to really understand from an industry perspective. And like having family that is in the industry, I, I lean on my family all the time for advice and like quick tips or like for questions all the time. And so I think it is really important to have that background.
If, you know, you're like two scientists starting a company, I think you can obviously find someone to help with that too. Bring on a third co-founder who can really lead like the business and the strategy and the direction, knowing what they know at the core technology. I do think that there's a lot of value in it. Like I said, building in a vacuum and building a platform, it's already hard and then figuring out what direction to take it is I think even more difficult when you have truly a foundational technology. So, for me, it was extremely important. And for us, as a business, I've been out of the, actually, technical aspects of the product and the company for many, many years now at this point.
So we've been, between my co-founder and I, we've been able to really delineate those responsibilities and those areas within the business more easily than if I were just a purely technical co-founder saying, "Okay, I'm gonna oversee marketing [laughs] for a little bit here." It's a lot more difficult [laughs].
Jason Jacobs: So this is a hypothetical, but let's say you and your co-founder were aspiring PhD students, but without you having that commercial background, and you did decide that it was important because you listened to this show and took your own advice and wanted to find a third co-founder that had that commercial expert to round out the team. What should that person look like?
Kimberly Lee: It's funny you ask that because we actually like when we were starting to scale the technology after our first round of funding, we actually did look for a business counterpart to really just oversee all of the operations, all of the nitty gritty so that Josh and myself could both be dedicated to building out the platform. We actually didn't do that in the end because when we were interviewing people, they just didn't get the vision the way that we did. We said, "Oh, we're not just a seafood company, we can do so much more." And our jobs is to find product market fit. We're in this like great area where we can actually say that most, like, if you're building a widget for X, right, it's like you're saying that product market fit will be there [laughs] and like trying to [inaudible 00:35:25] whereas we can really start and say, "Okay, where can we apply our technology to find product market fit?"
'Cause it is really different, and it's really hard to get someone to come in and say, "Oh, like this exactly what we want." Because we had the vision and we like knew what we wanted and knew how we wanted to do it. And so, for us, it was really then splitting the rules. It was then saying, "Kim, like you oversee everything related to the food, the product, the marketing." Our first hire technically was a designer, and so really thinking about, "Okay, how do we test? How do we build this platform to test?" And then on the back end, we were building the platform and the technology to support those products and support the testing.
I think like it would be probably beneficial to hire someone who has, I think most importantly, that like first principals thinking who wants to be innovative, who is entrepreneurial. I think like plucking someone from a business school who's like textbook business school driven may not be the best fit for [laughs] someone looking for a business counterpart. Going back, I always like talk about, okay, like who will we hire like as our first hire going back. And I think it would be an operations and a business counterpart to take all of those things off of our plate so we could continue to tinker. And it's like, where are you as a founder? Where's your zone of genius and where can you operate best? I think is asking yourself a question. So it's not a one size fits all.
Jason Jacobs: I mean, it sounds like the answer is gonna be every case is different, but just to double click on this, 'cause you talked about what you did, but you had that commercial experience, and ultimately, found that you were better equip than Marie and someone from the outside for founding teams that don't. If they approached you, in your mind, would you tell every one of them, split up the roles yourselves because it's too important to outsource or would you encourage some to bring on? And if they bring on, I mean, you said what not to do, not to bring someone out of business school or consulting or things like that. But what have about, I mean, any tips on what that person should look like from a skillset standpoint for a team that needs it?
Kimberly Lee: I think it's gonna depend on like what everyone's technology. This is definitely one of those one sizes not fits all. I don't wanna be prescriptive 'cause I think that's like the wrong thing to do here. Where I do think that let's say you're building a carbon capture company, like you wouldn't think about hiring a biologist who maybe like had a turn in career and like did tons of business development or operations. Like that would not be the right profile [laughs]. So I think it's valuing like, you know, whether you do want someone who's a little bit technical and has business experience. Whether you want someone who only has really business or operational experience.
It's really like what the biggest need is for the business, I think, is a big thing. Like I mentioned, I think for us it was definitely vetting the person for who they are, not necessarily their skillsets. Where it's like, "Okay, are they a startup person? Are they entrepreneurial? Are they first principles thinkers? Are they open to change?" I think is a huge thing because, as a startup, you're always going to change. You have to embrace change. So plucking someone from a Fortune 500 company who is high up may not be the right fit. Although, to caveat that not everybody is the same way. So it's really getting to know these people, especially, if you're going to bring them on extremely early to take over something that is so important.
Do you think the same? Do they answer the questions that you ask in the way that you want them to? There's a lot of different things, and it's bringing on a third co-founder or a co-founder is like extremely difficult and I've seen it go great [laughs] and I've also seen it go extremely poorly. So it's definitely something to not rush.
Jason Jacobs: So if we were gonna book an anniversary episode for a year from now, what are your key priorities over the next year? And, at that time, what would Prime Roots look like for you to say that you knocked the cover off the ball and had a fantastic year? What will you have achieved?
Kimberly Lee: We're going to be launching the next year, so we're really excited to be doing that. And then we are excited to be scaling and growing the business over that time as well, and to support that will be fundraising. So I think similar to our philosophy about early on going to deep into technology and then validating what we've built and then deep into technology. We take the same mindset with capitalizing the business. So, you know, we hit our milestones we're going to be raising shortly here off of the backs of our success and also say, "Hey, this is where we're going to go." So in the next year we'll be fundraising, which is the team effort, but I usually lead that. And then we are going to be launching, which is 1000% of team effort. And so I'm super excited to launch and really scale the business over the next year.
Jason Jacobs: Now I'll ask you the same question but 10 years out. In your wildest dreams, if Prime Roots is successful more than you could have ever imagined, what have you achieved?
Kimberly Lee: I think it's, in 10 years, it's really flipping the narrative between alternative and conventional in our categories. Where if you look at plant-based dairies, I always use an example 'cause I think they've skilled amazingly well. If you look at plant-based dairies, not that long ago, they were like single digits percentage penetration, now it's like almost 20%. And if you look at what are like the things that have happened? It's better product, better functionality, better taste. But also if you walk into a Blue Bottle Coffee today, the default is Oatly or oat milk. I actually don't know if it's Oatly, but it is oat milk.
Jason Jacobs: It's like Kleenex and tissues, right [laughs]?
Kimberly Lee: Yeah [laughs]. Yeah. The fact that the conventional, the default option at a coffee chain that's beloved today is an alternative milk, that's what I want us to be at, hopefully, sooner than even 10 years from now. Why does it have to be called alternative meat? It's just meat, and why is it conventional? Well, because it's the predominant option today. But we wanna really flip that narrative to have the clinical alternative, or hopefully, the Koji meats being a big part of that transition and that shift towards flipping the narrative.
Jason Jacobs: And when you think about how this, a company like this scales, you talked about an upcoming financing. I assume that would be another equity raise and that you've only had equity capital to date. How does that play out directionally if you had to predict? I mean, how much capital is a company like this gonna need to get to cruising altitude and will that all be equity capital or do you anticipate that other types of capital will likely be utilized as well?
Kimberly Lee: We'll definitely be employing the diversity of financing, I guess, methods throughout the course of the company's life. So I think we'll be raising an equity round and kind of seeing what the other options are there. Because the business does take a lot to scale and to properly capitalize. Just given, A, the velocity of growth, B, the opportunities that are afforded to us are huge. The market that we're entering into is also very large, so it's imperative that we scale fast. And so because we're full stack, we do everything from development to commercialization, to actually the manufacturing of the product. We have a lot of physical plants [laughs] to build.
So, for us, you know, everything does cost a bit, but what we're building here is really a company that will outlast ourselves. I mean, that's a really exciting proposition. We're building something different. It's not something that you can just go, "It's not a Me-Too product, it really is game changing." And we've been sampling to really the biggest taste makers in the entire planet and they have all loved the product. And so we're really excited to be building towards something that's much larger than even the category we're building in today. But a company that can take over every vertical within protein and be truly a platform looking forwards like 100 years.
Jason Jacobs: Well, I'm so glad I get to ask you this next question because there's this issue that seems to come up again and again around the marriage of venture capital and say project finance when it comes to scaling businesses that take significant plants or infrastructure or other capabilities that maybe aren't the best fit for equity. What would be an example of an alternative to equity capital that you could envision being viable for Prime Roots? What would it be applied for and how important is it to pressure test how available that capital is heading into say an equity B?
Kimberly Lee: I would say that there are a lot of nuances and different sources of even equity capital. So whether that be venture capital, just typical early stage, there's late stage, growth stage, and there's also like private equity. All equity based financing, but all very different in, A, the way that they operate, but all, you know, still take equity in the business. I think alternative forms of capital that are not equity based are debt financing, for example. And so there are a fair amount of debt [laughs] options out there as well. And so you can actually do a combination, and so it's really just evaluating what are the options available and making sure that it fits into the growth trajectory of the business and making sure that it's the right partners.
I think at the end of the day, once again, it's super important to identify the right partners because building a startup is nuanced and it is, you know, there's a lot of changes and ebbs and flows. So finding the right people to partner with who will support the good days and the bad days, especially, early on is super important.
Jason Jacobs: In your mind and in your experience, thus far, is there a chasm or a gap as it relates to the capital stack or is every category of capital that you might need robust?
Kimberly Lee: I think that to your point earlier about how traditional models don't do as well with heavily capitalized, like CapEx heavy businesses, I think there is some truth to that. Where like even within all of other equity sources of capital, there are people that focus on that. But I'd say like the vast majority of like VCs like, you know, love their like enterprise sauce. Where it's [laughs] like infinitely scalable, you press a button and there you go. Like more people get it. The traditional VC model is definitely more well tuned towards that. There has been a lot of shifts over the past few years to realize the value of businesses that are full staff that are business are more complicated.
I mean, SpaceX and Tesla were built off of equity financing, and so there are a lot of case studies where it has been very successful. And there is a shift to thinking about these industries as not being, per se, negative. I do think that not something that we'd do anytime soon, but I do think that the rises specs and the public market is really interesting for businesses like ours. There are a lot of biotech companies and companies that do need a lot of capitals to scale that are going to the public markets and being more supported there. This back instrument [inaudible 00:46:06] or like just this concept that you can go public much earlier than a traditional like IPO.
So I think that there's a lot of people thinking about how to capitalize [laughs] these world changing technologies. Because, I mean, honestly like a lot of world changing [laughs] technologies, especially in the climate space, do take a lot of capital and it's really unrealized potential today, I think in the capital markets.
Jason Jacobs: And what are the biggest risks if Prime Roots, for some reason, isn't successful directionally? I hope it is, I'm confident it will be, I'm rooting for you, but let's say it fails. Looking backwards, why do you think that would be? What are you most worried about?
Kimberly Lee: I think that the biggest risk to our business, and I think all companies in this space is really bad products. And a lot of "Me-Too products", a lot of, just honestly, bad tasting products I think are really detrimental to the entire plant-based industry. And so I think to our earlier conversation about barriers of entry, what we are doing, because it's so fundamentally different and is creating products that are accepted by the biggest taste makers in the world, in contrast, a lot of products that are out there and are being created today would not pass the taste test, would not pass the test of like, "Oh, this is not an ultra process. You know, food, oh, this taste like chemicals or cardboard or junk."
Like a lot of products are being created and launched today that are in those categories. And so I think that's honestly the largest risk. And so that's why, for us, it was so important to break free from the burgers, the nuggets, every single thing that's already out there like 10 times over. And I think that, as an industry, it's a really, really important role for buyers and for establishments to really think about pushing the envelope and getting better products and only allowing better products. I think there's a huge gap right now where there's a lot of mediocre products and there's really not anything in like the good products.
And so if consumers are demanding plant-based, then it is hard for a retailer or food service establishment to say, "Okay, like, we'll take this one because people want it." But like it's not really that good. And we see that time and time again when we go to sample or we talk to people and they're like, "I just have this thing because people want plant-based, but I don't like, like it, I wouldn't eat it." And that's a huge problem. So we're really, really seeking to change that within our categories at first, and then eventually we'll be everything, hopefully [laughs].
Jason Jacobs: And if you could change one thing outside of the scope of your control that would most impactfully improve the odds that you're successful and accelerate that path, what would you change and how would you change?
Kimberly Lee: Definitely only have amazing products on the shelves and in restaurants as it relates to protein sources. So that's really the big change I would make. And I think to facilitate that, it most definitely starts with having these platform technologies and having more actual like core technologies that are different. If you look at what a lot of people are doing today, it's really taking off the shelf ingredients and mixing them up in new ways and not rethinking from a first principal's perspective, which is what we did. Like how do we actually innovate on making meat better? And so our tagline is a better cut of meat. And so we're really excited to truly be delivering on that.
Jason Jacobs: And for anyone listening that's inspired by your work, how can we be helpful to you? And who do you wanna hear from, if anyone?
Kimberly Lee: I think there's a lot of products on the market and we're gonna be launching really best of class and really game changing products within the plant-based meat space. Once the news is out and once the products are out, we'd love any support and also sharing I think is really important. And so we're excited to be able to launch something that's amazing. And so really talking to all of your friends and family about it is really important. I remember when I first found Oatly, I like couldn't stop talking about it. So really just helping as a consumer, you do a lot by spreading the word and sharing. And so really helping us scale and grow our brand and our products over time is extremely important.
And then also we'll be scaling our team to help as well, so I'm sure there's tons of extremely passionate people who may be trying to figure out how to apply their skills and their passion towards something that is meaningful every day. We're definitely really excited to scale and grow internally at Prime Roots as well. So always looking for really bright individuals and we definitely hire unconventionally in the sense that, you know, we like to look at people for who they are and not necessarily for their resumes.
Jason Jacobs: Great. Anything I didn't ask that I should have or any parting words?
Kimberly Lee: No, I think that's great.
Jason Jacobs: Okay. Well, Kim, thanks so much for coming on the show. I'm excited for the news whenever it's out and best of luck to you and the whole Prime Roots team.
Kimberly Lee: Thank you. Thanks for having me on.
Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note, that is .co, not .com. Someday we'll get the .com but right now .co. You can also find me on Twitter @jjacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.
