Startup Series: ByFusion
Today's guest is Heidi Kujawa, founder and CEO at ByFusion. ByFusion is solving the global plastic waste crisis by turning unrecyclable plastics into building materials.
Plastics are lightweight, durable, strong, low-cost, and built to last. Those qualities are fantastic in reducing the cost and weight of shipping and packaging items. And those qualities are equally terrible when it comes to waste. Not to mention, virgin plastics come from fossil fuels and are providing an increasing amount of the value of a barrel of oil. ByFusion is looking to take advantage of plastic's positives while obviating its negatives by turning waste plastic into durable building blocks.
Heidi and Cody have a great conversation about her background, the different types of plastics, and what's recyclable and what's not (side note: we can all probably do better when it comes to recycling). They also talk about how ByFusion works with municipalities and waste management companies to source materials, what the company’s ByBlocks look like, who is building with ByFusion and what they are building, the evolution of plastic waste credits (which are similar to carbon credits) and how Heidi is financing the company and its product development. This is a jam-packed episode and we hope you enjoy it!
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Heidi Kujawa / ByFusion
MCJ Podcast / Collective
*You can also reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded on January 18, 2023.
In this episode, we cover:
[2:09] Heidi's background and how it fed her experience building ByFusion
[4:31] How she decided to focus on plastic waste
[6:58] An overview of ByFusion and the company's ByBlock product
[9:44] Recyclable vs non-recyclable plastics
[13:34] Different use cases for ByFusion's construction materials
[17:14] ByFusion's municipalities customers, unit economics, and who's paying
[21:36] The company's business model
[23:51] The plastic diversion/credit market
[25:43] ByFusion's upcoming projects
[28:34] State and country-wide policies around plastic and their implications
[30:50] The company's financing to date
[34:37] Where ByFusion needs help today
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Jason Jacobs (00:01):
Hello, everyone. This is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (00:05):
And welcome to My Climate Journey. This show is a growing body of knowledge, focused on climate change and potential solutions.
Cody Simms (00:15):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change, and all the ways people like you and I can help.
Jason Jacobs (00:26):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms (00:40):
Today's guest is Heidi Kujawa, CEO and founder at ByFusion. ByFusion is solving the global plastic waste crisis by turning unrecyclable plastics into building materials. Plastics are lightweight, durable, strong, low cost, and built to last. Those qualities are fantastic in terms of reducing cost and weight for shipping and packaging items. And those qualities are terrible when it comes to waste. And virgin plastics come from fossil fuels, and are providing an increasing amount of the value of a barrel of oil. ByFusion is looking to take advantage of plastic's positives, while obviating its negatives, turning plastic waste into durable building blocks for construction.
(01:23):
Heidi and I have a great conversation about her background, the different types of plastics, as well as what's recyclable and what's not. Side note, it turns out that I have not been doing it right when it comes to recycling. We also talk about how ByFusion works with municipalities and waste management companies to source materials, what ByFusion's building blocks look like, who's building with ByFusion, and what they're building, the evolution of plastic waste credits, which are similar to carbon credits, and how Heidi is financing the company and its product development. This is a jam-packed episode, and I hope you enjoy it. Heidi, welcome to the show.
Heidi Kujawa (02:01):
Thanks for having me, Cody. Great to be here.
Cody Simms (02:03):
Well, let's dive in with your background. How did you ultimately end up building ByFusion?
Heidi Kujawa (02:09):
In the beginning, it goes back to my childhood. I mean, even as a kid, I loved tools. My tools were my toys. I've always been building stuff in the fort and in the woods, trying to build some stuff. And even in my first job I was a bicycle mechanic, so I love tinkering and building and making things happen, seeing things work. But as I grew older, the thing that I also found out that I loved is just solving hard problems. And so my career actually ended up in technology. I had a great, great foyer in the startup world, did a lot of stuff in the early '90s, I saw the Y2K and then made it to the Valley for the heyday. But ultimately it was a crux in my life where I wanted to bring my love for construction and building and tech all under one roof, and here we are, we have in ByFusion. So I get to do all the things I love the most every day, all day long.
Cody Simms (03:01):
You had some different areas along the way. You worked in entertainment, you worked in property tech, you've worked in a bunch of different disciplines. How has that fed your experience for building ByFusion? In any way, maybe it hasn't, but always interested to hear how people pull from different aspects of their careers into the thing they're doing now. And they often say that when you look backwards, things make more sense than maybe they did when you started along the journey. You can see how the dots connected along the way maybe. So I'm curious how your experiences lent themselves to your current initiatives.
Heidi Kujawa (03:35):
Yeah, that's actually a really great question, and I would agree. As I progressed and meandered through life, I was never one of those people who had a straight shot of, I know what I want to be when I grow up, and this is what I'm going to go do. I've always been inspired by answering the hard question and doing the hard thing. And so my career went from over here, and zigged over there, and oftentimes I looked at myself in the mirror and I was like, what are you doing? You're like, what is going on? But when ByFusion happened, I realized that all of those ebbs and flows, and peaks and valleys, and zigs and zags actually prepared me for this more than anything. So it was when I looked back that I realized, oh, well, that's exactly why the universe pointed me in all those different directions, so I was better prepared for this role, and this challenge.
Cody Simms (04:23):
And what about the plastics problem inspired you? What morning did you wake up and said, I want to solve the world plastic waste problem? What did that look like?
Heidi Kujawa (04:31):
It was by accident, actually. So I think it goes back to when I was swinging the hammer and building houses, and really heavy into construction. I always wanted to build sustainably, but those recycled products were always at a premium. It made me crazy because as a builder, it's all about speed, and bottom line, and getting in and get it out. So there was this moral and emotional dilemma that I had when buying building materials. It was like the bottom line was telling me, buy the brick, buy the brick. But I really wanted to buy the recycled material, and I just couldn't make it work financially. So I parked that problem in the back of my head.
(05:06):
And then as the years progressed, I guess it was 2015, 2016, when this opportunity rose itself in my life, or came to light, and the plastic problem was just starting to surface. And it was fascinating to me because it's such a complex monster to tackle, and I'm sure we'll get into this, but plastic has, I think, become a villain in this story. And it's actually, we've just mismanaged this amazing material. But anyway, that's how it came to be. It was like, well, what if we could use this horrific problem that is going to continue to swell to solve for some of the issues and challenges we're seeing in the construction space, particularly with the volatility in the building material market, and the skilled labor shortage. Can we use one problem to solve another? And that's really where it started.
Cody Simms (05:56):
And you said plastic is the villain in this story, but it's been mismanaged. How so?
Heidi Kujawa (06:01):
Well, I mean, it's a hard story, because on one hand it's a fossil fuel. 6% of oil production goes to making plastic, and that's increasing. And we're trying to combat greenhouse gas emissions, to which that has then part of the solution. I mean, plastic has enabled us to transport things lighter, faster, cheaper. It doesn't break, reduces a whole bunch of other issues that we saw before its existence, but it is a complex material. It's an engineered material. Not all plastic is the same. And so it was designed to intentionally never degrade or go away, and so it hasn't, and that's part of the problem. So instead of just taking it for face value and trying to extend the life of this thing as long as possible, and repurpose it for different uses, we've just, in our trash society, our waste society, have just completely mismanaged it.
Cody Simms (06:58):
And what does ByFusion look like? Maybe let's talk about the solution that you've come upon for managing this plastic waste problem. Describe ByFusion for us.
Heidi Kujawa (07:10):
First and foremost, we look at ourselves as an innovative solution to help to decarbonize the planet by solving the global plastic crisis locally. And there's a couple reasons and a couple ways that we do that. So first and foremost, the world is going to this really interesting evolution and de-globalization. Everything's becoming very community-centric. We've got resources at our fingertips that can be used locally, that should be used locally. We have a building material issue across the world, including in our own country, not just in the emerging markets, if you will, but even here we struggle today in major urban markets not being able to have access to materials.
(07:52):
And so what we're designed to do is we've developed a Micro Diversion Platform that is completely accessible to every community and or corporation depending on the corporation that produces material, but it's intended to live right where plastic waste is, to convert that material into something usable. Right now, we're very much focused around building materials because there's such a need for that product. The machine right now, our system right now converts only non-recyclable plastic. We focused on that. I think there's a clear distinction. We should probably peel that layer of onion in a minute, too. But we are focused on converting non-recyclable plastic into a reusable building material that can be consumed locally. And the great thing about it is it only uses plastic waste. We're not dependent on any other aggregate except for plastic waste.
Cody Simms (08:43):
So you have a machine that co-locates or lives near a waste facility in a given location, and somehow takes this non-recyclable plastic and turns it into something that can be used when you are constructing new buildings. What does it look like? What's the physical form factor, just to help our people listening with headphones on, or wherever, in their car or wherever they are, understand what your product physically looks like in the end?
Heidi Kujawa (09:10):
Yeah, the goal really was to move as much plastic or put as much plastic to waste, or to use as quickly as possible. And so our first product that we're moving into market right now is called a ByBlock, and it is the exact same dimension as a cement block is today. So it's a 16 inch by eight inch by eight inch block. The great thing about it is it's about 10 pounds lighter, so it's a lot easier to work with. It's about 22 pounds, but it looks just like a cement block, kind of like a Lego. In some of our iterations of the block, it looks like an adult Lego.
Cody Simms (09:44):
Super cool. And so you manufacture these using non-recyclable plastic. So what is that? What type of plastic is non-recyclable? There are all those little numbers on the plastic that I have in my house. Honestly, I don't know the difference between any of them. And to me, they all go in the recycling bin, but I'm probably doing it wrong.
Heidi Kujawa (10:01):
Well, that's part of the complexity, too. You hit the nail on the head there, Cody. Yeah. All plastic is not created equal. So right now the most common plastic, there's seven types of plastic, only two are traditionally recyclable. There's a third category that's starting to be utilized in traditional recycling capabilities. But the numbers that the waste management companies really want and are after are the number ones and number twos. And now in some markets, number five. From a, what the heck does that mean? It's really the water bottles, the milk jugs, some of the stuff you see in food products. Those are the things with the highest purities that are easier to recycle. So things like containers that food is in, are the things that are typically the most recyclable products. Typically, things that are clear, and where food is.
Cody Simms (10:54):
And what are the most common non-recyclable plastics that are in use, whether as consumer waste or post-consumer waste, I guess, or as industrial or commercial waste?
Heidi Kujawa (11:05):
Everything else. The straws that we're not allowed to use anymore, the plastic bags, the films that we see, the flexible packaging, the candy wrappers, the potato chip bags, the coffee bags, some of the really rigid containers that you see, bubble wrap, packaging. I mean, just everything else that's not supposed to go in there.
Cody Simms (11:25):
I am definitely doing it wrong. I also learned recently that I guess even aluminum cans have a plastic liner inside of them, which I was not aware of. So it's truly everywhere.
Heidi Kujawa (11:36):
It's truly everywhere. Yeah. I mean if they didn't have a liner in there of some sort, it would taste like metal.
Cody Simms (11:42):
Good point. So then you turn this non-recyclable plastic waste into these blocks. Otherwise, that waste mostly ends up... Is it typically landfilled? Is it typically sent offshore somewhere, at least in the US? What is the typical life cycle of this other plastic waste look like today?
Heidi Kujawa (12:02):
Well, that's a good question. When I first started, the plastic that couldn't be recycled or it was highly contaminated, which also means it couldn't be recycled, it actually was shipped overseas. And what they did was either burned it for energy or God only knows what else, but they would take it. There was a market for it. And that's when you hear in the industry the green, this sword, like the green sword that fell, the green wall. That's what happened in 2017 was when everybody said, "No, we don't want the US's waste anymore." And so it's just been stockpiling. Waste energy is a real thing. Pyrolysis companies exist for a reason. We do incinerate things, but typically in the past, that's what we've done with the stuff that can be done as an incineration, and there's some waste to energy stuff. Or companies out there that are doing some interesting things.
Cody Simms (12:56):
And that's just in the US. I was talking to a different startup recently that's focused on the plastic waste problem in emerging markets, where they said there's not typically waste collection, and most people are burning it in their backyards.
Heidi Kujawa (13:08):
Yes. It's horrible.
Cody Simms (13:10):
Which is awful, obviously from an emissions perspective, but also from a health perspective. So hugely problematic. And so then you take it, you turn it into these construction materials. And then where can these construction materials be used? Is it load-bearing, is it accent material? What's the typical permitting process, I guess, look like from a building perspective, when it comes to alternative construction products?
Heidi Kujawa (13:34):
Yeah, that's also a really great question. And so it's a complex answer, but I'll do my best to put a bow on it pretty quick. But it's a general utility. The building codes are really quite complicated in some markets. So that's an area that, as we were working on expanding our machine, and maturing our machine and our capability, is we also started really early on understanding what we needed to do to ensure adoptability of our product in meeting building codes. And so we worked with the International Code Council from day one. As soon as I made my first block, I called them. I'm like, "Okay, now what do I need to think about and what I need to do?" And that body is a governing, certifying body for building materials. And so they've done some really great work with us, and educated us on what we should be thinking about when it comes to building adoption.
(14:22):
So the way we position the block is really in a general utility usage. It's a big category in the building code world. We are regulated just like a timber or lumber, because it falls within the same kind of category for a number of different reasons. But I love when people are like, "Well, what can you do with a ByBlock?" And I'm like, "Well, what can you do with a two by four?" I mean, it's a building material that performs this way, and so that's really where we're focused on. Nice utility structures, all the way from commercial landscaping, commercial walling applications, to structures, residential and commercial, and of course municipalities. We do a lot of stuff in parks, Department of Transportation and Public Works right now, and then there's a lot of other architectural things that we're doing as well.
Cody Simms (15:10):
So I'm hearing you say it can be a framing material, it can be an accent material. It can be inside a structure or outside a structure, if people want to sort of show off the plastic reuse in their project, much like how exposed brick became cool in the '90s, I guess you could do that with your exposed plastic wall or whatnot. It's not going to be the load bearing material that you're going to put a roof over or anything necessarily, but it can fill the space, is what I'm hearing you say. Is that right?
Heidi Kujawa (15:39):
It can fill the space, but I'm actually in a building that's made out of our material, and I do have a roof on it. And we are in the process, we just packaged up our first permitted house, so that our first 600 square foot residential home is being rebuilt this year, which I'm very excited about. So as we get more hands on the product, the more applications come to fruition, and it's just a really exciting time.
Cody Simms (16:06):
We're going to take a short break right now so our partner Yin can share more about the MCJ membership option.
Yin Lu (16:13):
Hey folks, Yin here, a partner at MCJ Collective. Want to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing, that goes beyond just listening to the podcast. We started in 2019, and it has since then grown to 2000 members globally. Each week we're inspired by people who join with differing backgrounds and perspectives. And while those perspectives are different, what we all share in common is a deep curiosity to learn, and bias to action around ways to accelerate solutions to climate change.
(16:42):
Some awesome initiatives have come out of the community. A number of founding teams have met, nonprofits have been established, a bunch of hiring has been done. Many early stage investments have been made, as well as ongoing events and programming like monthly Women in Climate meetups, idea jam sessions for early stage founders, climate book club, art workshops, and more. So whether you've been in climate for a while, or are just embarking on your journey, having a community to support you is important. If you want to learn more, head over to MCJcollective.com and click on the members tab at the top. Thanks, and enjoy the rest of the show.
Cody Simms (17:14):
All right. Back to the show. And you mentioned municipalities are interested in this. Maybe walk us through who's buying these blocks? What does the typical sales process look like today for you, and where you're seeing some initial traction and interest?
Heidi Kujawa (17:33):
Yeah, I mean, the blocks are, from a city perspective, I mean, there's a couple of cool things that I think attract our solution to our government leaders. Our very forward thinking, environmentally forward government leaders, and there are many out there, is that they have put themselves out there. They focus on climate, they focus on sustainability. They have very aggressive climate action plans and zero waste goals. And so clearly our solution and platform enable them to achieve those goals. But they're also trying to put people to work. And the great thing about our block is that anybody can build with the block. So it enables communities to tap into a whole nother labor pool to help meet the local construction demands of the community, and so that's the thing. It just ticks a couple different boxes, when it comes to overarching municipal goals that they're trying to accomplish.
Cody Simms (18:28):
And then if I understand correctly, based on how you described it, the machines are co-located at their waste management facilities, which the municipalities also either own, or are partnered with if it's a private company. Is the waste having to get paid for somehow or otherwise, this is just a pure cost center for them that they're now converting into these usable materials? So maybe describe the unit economics from plastic waste through your machine, to a block, and who's paying for what as part of that whole setup?
Heidi Kujawa (18:59):
Yeah, that's a great question. So you're right. I think, yeah, we're intended to co-locate at or near a existing facility, but we're also... Our platforms are very, can stand alone too. In some markets, it makes sense to stand alone. So we have a standalone operation that can service multiple waste management partners in a neighborhood. But a lot of people don't realize that solid waste management programs are city functions. I mean, that's part of our government's job, and our taxpayer dollars go towards solutions around solid waste. Some communities actually own and do everything from curbside recycling all the way to landfill. Some municipalities choose to outsource it entirely to their waste management providers, to which there are several, I'm sure you know WM, Republic, all the big guys, we love them. They're amazing. They do great work.
(19:49):
And then there's some that sit in the middle. They do some of the supply chains, some of the other supply chain. But the net-net is for those communities that do offer recycling capabilities, they care about the ones and twos. They want that high value resin to be extracted out of the blue bin. And the stuff that we put into the blue bin that they don't want ends up being just a massive cost burden. It still has to be sorted, it has to be picked up, then it has to be bailed, and then it has to be transported, and then it goes to landfill, which becomes expensive. I mean, it's just expensive.
(20:25):
So the more we contaminate that blue bin, the more expensive waste management becomes. So our goal is really to help to declutter the blue bin. And like you mentioned earlier, Cody, it's confusing to you. You're like, "I don't know what's what, it's too confusing." So you put everything in there, which you're trying to do the right thing, but just makes it more complicated. And so if we give you the mechanism to declutter that blue bin, it's a cost savings to them as well. So no, we don't typically pay for it, because it's saving money on the end. So waste management providers and municipalities typically end up saving money on using our solution, as opposed to landfilling, and all of the stuff that requires to get to landfill.
Cody Simms (21:06):
So are you helping them do the sorting?
Heidi Kujawa (21:07):
Well, it depends on where we are. So yeah, in some cases, if we're plugged in at the end of their line, which is optimal, then a conveyor does the sorting. So they're already doing the sorting on the upstream, and then we take it off the downstream, and then all that high value resin gets that equipment that is expensive that can be focused on the high value material. And we'll take everything of no value, and at least reduce those costs around handling that, if not eliminate them, and turn it into a profit share.
Cody Simms (21:36):
And so as a business then, are you selling the hardware? Are you selling the service of the hardware? Are you selling the blocks directly? All of the above? What does the general model look like for ByFusion?
Heidi Kujawa (21:49):
Yeah. Well, our goal is to be in every city. I mean, we believe that every city needs to have a solution like this. Everybody's got construction needs, everybody has plastic waste problems, and we're an affordable solution. But we're positioning ourselves as a service provider first and foremost. So we're interested in coming in, investing our technology into communities that need us the most, and that's where we're focused on expansion right now. So we'll just come in providing services to the community, and then we'll let people do what they do best, waste management and running city governments, and we know how to sell those blocks. And then the way that we partner is through revenue shares to ensure that circularity within the program continues.
Cody Simms (22:28):
Oh, interesting. So they can help you establish yourself in a municipality, help you connect into their waste streams, maybe they have some local municipal projects like a bus stop or something that they're building, where they'll use your blocks, but then you're going to be building surplus blocks as well, which you then have the ability to go sell. And I don't know if you're rev sharing back to the city when you do that, but it sounds like you also have the ability to be a direct sales engine around some of the materials that you're creating. Am I understanding that correctly?
Heidi Kujawa (22:57):
Absolutely. It's a big part of the challenge. So the equipment is one thing, but now if you're plugging at the end of a waste management line, well, they're waste management companies and they excel at logistics and sorting, and servicing communities. They're not building material distributors, but we are. We know where that demand is. We know how to work with that product, who needs it, and the demand is exceptionally, it's all over the place. And so we've got an incredible demand for the block, so we can help make sure it gets to a good home. The cool thing too, about our product and our process, is that there's entirely, there's 100% traceability. So I literally can tell corporations who are also are trying to achieve their sustainability goals, "I know that this waste came from this neighborhood, and it went to this job site, and it contributed the community in this way." So that traceability is such a key thing, too, that we're seeing more and more about in regulations and in city demands.
Cody Simms (23:51):
On that note, actually, is there any sort of credit that you're pursuing, either for ByFusion or for the buyers of the blocks? I don't know if it would be a carbon credit or a plastic reuse credit, and/or both of those things, but I know Vera obviously has carbon sequestration credits, but they also, I believe, have plastic reuse credits, I think, as well. I'm curious what that part of your business you think ultimately looks like.
Heidi Kujawa (24:18):
I think it's evolving right now. We're working on that as we speak. So you're right, the plastic diversion or the plastic credit market is a new one. I mean, the industry's learning what that means right this very moment. There was such massive success in the carbon credit market that it just only makes sense. Plastic is carbon. So how do we dovetail into the successes that we saw in the carbon market, to help control this problem too, or help get this problem under control, I should say? So yeah, we are working with a couple of different companies. There's some emerging ones, Vera, obviously, there's another very cool company called Kline Co that's doing some amazing work, and working with some of the top companies in the world. So we are working on that right now. What it looks like for us, we're still trying to figure that out, but we know that we could be a big contributor to that industry,
Cody Simms (25:10):
I would think if it evolves the way the carbon credit space did, the big thing you'll have to help manage is, as you would expect, is around double counting. So if the building site is claiming to be a plastic reuse building site, but then some big plastic polluter was buying the credit from you in order to turn those blocks into blocks in the first place, both sides probably can't claim that statement. Only one of them is plastic net zero, I guess, in that case, right?
Heidi Kujawa (25:38):
Yeah, exactly. That's some of the stuff we're trying to figure out.
Cody Simms (25:43):
What are some of the projects that are either in process, or on the horizon, that you're really excited about? Just helping us all see the picture of where we might expect to see ByFusion in the wild?
Heidi Kujawa (25:56):
Wow, there's just so many. The thing that's exciting about the projects that we have on the horizon are it touches every aspect of what we had hoped. Our goal is to, this is social proof at its finest. I mean, when you see a ByBlock, whoever it is, they know exactly what it is. They can see finally a tangible result, the fruits of their labor of sorting and doing the right thing in the blue bin. They know that, oh my God, that came from my kitchen. I know what that is, and now it's in this park that my kids are playing in, and it's amazing. So the social proof's such a wonderful thing to experience, and we're really focused on ensuring that communities who are taking the effort to do the right thing with this material get to benefit from it. So we're focused on parks and rec, and Departments of Transportation, and things of community and public works.
(26:50):
And those things can be anywhere from, like I said, benches and parks and landscape applications, that community benefits. There's a lot of work going on with urban development, and open air planning, and end of line micro parks that you're seeing pop up all over the country, which is exciting and fun. And then there's just utility projects that cities need, like dumpster enclosures, and storage sheds, and utility operator control rooms, and protections, and barriers, and walling applications. And so we're doing some great work with Tucson right now, Tucson, Arizona. I was just there a couple weeks ago. And to be able to drive around a city in multiple locations and see the material in action, I mean, I didn't really realize how powerful that was going to be for me, but it was pretty powerful. I mean, it was a dream come true, and they're just continuing to build more and more.
(27:46):
So it's all that kind of stuff. Now that's fun, but the more fun is the commercial stuff that we're doing. We're working with a huge real estate development company right now, and we have this massive project going on in Maui that we'll launch later this year that I'm really excited to share. It's one of our biggest construction deals that we've done to date. We just shipped blocks to MoMA. We'll have an exhibit in Manhattan. We've got blocks in Brooklyn at a live venue environment. We're on a military base. We're in interior lead buildings. We've done furniture applications. I mean, it's just all ranges. And then of course, we just shipped our first house, so it's all happening, coming together.
Cody Simms (28:34):
I remember I had a friend in college whose parents were hippies or whatever, and they had a house made out of used tires. So it's almost like that sort of thing coming back around. And I can imagine big public works projects like airports, and/or, it's not a public works project, but big tech campuses and whatnot in the future, really embracing this type of building material. You mentioned Hawaii, or Maui, I think, which Hawaii has, I think, been really progressive on plastic regulation locally. What other geos are really leaning into plastic reuse regulation? There's obviously a lot going on in Europe today, but I'm curious in the US where else you're seeing new policies or new goals emerge that you think are on the right path?
Heidi Kujawa (29:21):
I think it's too early to tell, really. I mean, there are some states that are adopting some more plastic regulations. I mean, California just passed some new regulations, but it's mostly around banning things. The sad thing is they don't understand when you ban things in that way, in that drastic measure, I'm not saying it's wrong, I'm just saying it could be even more disruptive. So are you just reverting back to decades ago? And then what is the weight and solution going to do to the transportation aspects of GHG emissions? So it's just one of those... Whatever. So I think it's early to tell. Now, the thing that I think is becoming more of the guiding stick, if you will, are the regulations that government's passing down to producers of plastic for producer responsibilities.
(30:09):
Regulations are becoming more prevalent across the states. Obviously California and some of the states in the East coast are always the ones that are going to lead in those areas, and they have. But producer responsibility regulations are starting to become more and more there. They're just becoming more and more out there. So I think corporations are now looking for reuse, repurpose, what are we going to do? How are we going to prove we're doing it, because everybody's super sensitive to greenwashing? It's got to be defensible. There's nothing more defensible than a ByBlock. It's a zero waste process. Pound for pound I can tell you exactly to the pound how much you divert, and where it went. So it's pretty exciting on that end.
Cody Simms (30:50):
And how have you gotten the company to the point of being able to produce these in locations around the country? As I understand it, and I guess we haven't talked about this yet, but these machines have some pretty significant costs to getting a machine up and running, upwards of seven figures. And so maybe explain a bit about how you have financed the business, just for other entrepreneurs who are thinking about how to get their hardware components of their business going?
Heidi Kujawa (31:18):
Yeah, this is one thing I love about MCJ is that you guys have this educational component to entrepreneurs, and one thing that I hear you say all the time is that as an entrepreneur, you guys need to understand who your audience is. You can't go to every VC. Sometimes they don't care about what you're doing. You just have to understand what's going on. So I just wanted to plug that, because as I started this process, as I started this journey of my own, I realized exactly that. I grew up in tech, so I could sell a tech platform to a VC all day long. I know how to do that, but this is not that. This is hardware, it's waste management, it's construction. VCs don't invest in those industries. They just don't, right? So I knew early on.
(32:04):
I'm like, "Well, the only way I'm going to get this done is if I just bite the bullet and do it. I'll assume the technology risk, and if it works, great, and if it doesn't work, then I'm out of money. But I trust myself, and I know what I can do." And so I just chucked out the check and we bootstrapped R&D, and once we started getting a lot of traction, and started producing consistent blocks continually, over and over again, and we had successful alpha runs, and we were ready for mass manufacturing, that's when I started to go out and raise a seed round. So we already had gone through six iterations of the machine. I invested over two and a half million, got it done, got it across the line, did a bunch of testing on the block, so we had a bunch of proof points already before we went into market.
Cody Simms (32:52):
Well, nothing like betting on yourself, I guess. We all wish we didn't have to sometimes, but when you trust yourself to do it can pay off when it works. And so today, when you go into a new location, you're having to deploy a new machine, are you absorbing the capital cost of that new machine, or are you often doing a co-development with the location that you're entering to help fund the initial machine development?
Heidi Kujawa (33:15):
Yeah, that's also a great question, and it really varies on the municipalities. So the great thing about what we did when we were building our platform is made sure that it had value, commercial value right out of the gate. Because there's a tremendous amount of instruments and institutions that support asset financing. So we'll see how cheap that stays, as the market shifts, but there's a lot of avenues for entrepreneurs to reduce equity types of fundraising, and focus on asset financing instead. So sometimes we focus on our financial friends for asset financing, and sometimes we work directly with government on grants. There's a tremendous amount of resources, depending on the state, available to help get this done, and that will assume some startup costs. And then of course, there's just some emerging foundations and organizations that are focused on helping seed new solutions and innovations around this particular problem in new markets too. So there's becoming a wider net of how to get it done. But yeah, the great thing is it's a lot cheaper to spin up a facility for our platform than any other solution out there. So I'm pretty proud of that.
Cody Simms (34:27):
Yeah, especially because the feed stock that you use to build the materials, again, is already a cost center for these municipalities that they're trying to figure out what to do with anyway.
Heidi Kujawa (34:36):
Yeah, exactly.
Cody Simms (34:37):
Heidi, where do you need help today? If people are listening that are intrigued by what you're building, what support and help are you looking for? Whether on the team or just in terms of touchpoints and relationships that you need to establish for the business?
Heidi Kujawa (34:51):
Yeah, thanks for that. I mean, we're in a really interesting inflection point right now. This is when everything's starting to happen. And so we are growing the team. We've just brought on an incredible chief revenue officer, Vaughan Stanford, who's joined us from Yeti, and he's done some really hard work at Cisco. We have a head of engineering who's starting in a couple weeks. He's coming from one of the leading space tech companies on the planet, and I'm really excited for having him join the team too. We'll talk about that later, but keep up for announcement. Yeah, we're growing the team for sure. We're also always interested in partnering with corporations who are looking for unique solutions to help demonstrate and defend their sustainability goals. And so we're looking for active partnerships. Yeah, I mean, always looking for friends who are looking to do cool things, and we've got events coming up if you're looking to volunteer or get involved. We're doing some cool things with our Ocean Conservancy Group. And yeah, lots of networking, of course.
Cody Simms (35:52):
So for any listeners at big tech companies that are friends with your facilities and operations teams, you know who to call with Heidi here, when you're looking to figure out how to expand a campus, or this, that, and the other. And same if you work in municipal government, it sounds like. I'm so grateful for you to come on today and explain ByFusion and help us have a little bit of hope when it comes to the mountains and mountains of plastic waste that we know are all over the world, and that there is hope for where parts of it could end up.
Heidi Kujawa (36:24):
Thank you. We'll keep fighting the fight.
Jason Jacobs (36:26):
Thanks again for joining us on the My Climate Journey podcast.
Cody Simms (36:30):
At MCJ Collective, we're all about power and collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars, content, like this podcast and our weekly newsletter, capital, to fund companies that are working to address climate change, and our member community, to bring people together as Yin described earlier.
Jason Jacobs (36:52):
If you'd like to learn more about MCJ Collective, visit us at www.MCJcollective.com. And if you have guest suggestions, feel free to let us know on Twitter @MCJpod.
Cody Simms (37:07):
Thanks and see you next episode.
