Welcome to Episode 47 of Students vs. Startups. This week, moderator John Gilroytalks with the Founder of Spira, Elliot Roth. Spira is made from spirulina, which is a fresh ingredient that is virtually tasteless that provides a significant portion of dietary needs. Listen below to hear about food for the future!
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John Gilroy:Welcome to Students vs. Startups: Showdown on the Potomac. My name is John Gilroy, I'll be your moderator today. Big round of applause here for show number 47, yay baby! Wow, matches my IQ, matches my IQ. 47. Well if you've heard the podcast before, you know the drill. We have a conference room over here at Eastern Foundry. We kind of stole a chair and a couple tables and put them in the room here. One side of the table we have some students, one side of this table we have a startup. We have a 26 minute conversation, then we walk out of here and go to the local brewery or something, we have some fun.
Our students today, we have a good section of students here. Ricardo tell us about your background please.
Ricardo:Hi. I recently graduated from Georgetown's technology management program and now I work for a startup called clutch.co, and we connect B2B service providers with potential clients across the world.
John Gilroy:Whoa, so you're a student and a startup.
Ricardo:Student and a startup, yes.
Elliot Roth:We need to switch spots right now.
John Gilroy:So in a couple weeks, have you on the other side of the table or something. Ikena your background please.
Ikena:My name is Ikena Nwampa. I am a graduate from Georgetown's technology management program. I work in community development developing the business systems that financial institutions use to apply for grants.
John Gilroy:And Elliot Roth is our startup here on the other side of the table. Elliot tell us about your company and how you got involved in this please.
Elliot Roth:Yes, my company is Spira. We create technology that grows, processes, and engineers algae for a variety of different applications, primarily protein for human consumption. Part of the reason I got involved in that is a kinda crazy story that I'll go into in a little bit, but you can kinda consider me as this mad scientist and inventor. I built a laboratory in my garage.
John Gilroy:A laboratory!
Elliot Roth:A laboratory! A bit Dexter-esque. From scavenging and dumpster diving for lab equipment out of the back of my university. And using that lab I started all sorts of crazy projects, and this is one of them that has just taken off.
John Gilroy:Wow, interesting, interesting. So S-P-I-R-A, is that right?
Elliot Roth:Spira. Yep.
John Gilroy:Well I got tons and tons of questions. We're gonna have Ikenna jump right in here and have at it there, big fella.
Ikena:So could you talk to us about your technology solution for the Spira.
Elliot Roth:Spirulina, yeah. So one of the core issues that many people end up having is just getting access to basic nutrition. I can't count the number of times that I go to my fridge and open it up and don't have anything to eat at all when I just need bare, basic, essential nutrients. So when I was living in Richmond, Virginia, I was going to school and a recent graduate, and I was living in a food desert. And I'd been such a mad scientist and inventor and I was just so focused on my work that I didn't really notice that I was running out of money. And I didn't necessarily ... Being an entrepreneur, you don't necessarily wanna go work for somebody else, and there was no jobs really around the area, and so I had a choice. I could either decide to go home, move into my parents' basement, figure out different ways to kind of make money on the side, other things like that. Or, alternatively, figure out ways to cut cost, and focus on what I was truly passionate about.
So, I had a choice between rent or food at one point. I was evicted from my place. It was incredibly difficult. Without friends, I wouldn't have really gotten by. So I spent a good couple months couch surfing, and then wanted to figure out different ways to cut my only other cost, which was food. And I looked into the different ways that NASA had been growing food for astronauts in space. So in this tiny amount of space, for very, very little resources, how do you grow almost complete nutrition for a person? So, taking that research, I ended up using that in my little home laboratory as a means of ... Actually it was a friend's garage ... as a means of growing and producing my own protein.
So Spirulina is something that was fed to astronauts as a means of providing for their nutrition, and we ended up creating a device that can grow almost all the protein you need at the press of a button every single day.
John Gilroy:Ricardo, jump in here buddy.
Ricardo:That's awesome. I am actually a big fan of astronaut food, so can you talk to us a little bit about the Halcyon program at Georgetown and how does that play a role into your company?
Elliot Roth:Definitely. So-
John Gilroy:I have to jump in. H-A-L-C-Y-O-N.
John Gilroy:Halcyon. So you can look and Google it and find out.
Elliot Roth:Yeah. Halcyon is a program that was started by Dr. Sachiko Kuno back in 2011. And they bought this massive house in the middle of Georgetown, and what they do is they support creative individuals as a means of sponsoring social impact in the world. So they give you a small living stipend and five months' residency in this giant mansion with some other crazy entrepreneurs that are working on world-changing problems as a means of solving some of the biggest global challenges of our era. So it's been an incredibly supportive time. Halcyon stems from the phrase "halcyon days." So it's a period of calm in the midst of the Mediterranean, in which these birds can actually raise their young and rear their fledglings out of the nest. So that's kind of what it does for entrepreneurs. It gives you a brief period of time to not have to worry about providing for your basic needs, which is what my company focuses on anyways, but in terms of focusing on your company and making sure that it grows.
Ikena:So are there any strategic partnerships that come from out of that house that helps your company grow?
Elliot Roth:Yeah, so Halcyon is incredibly networked in the D.C. area. They end up bringing by some of the most prominent impact investors. And part of the reason why I moved my company to D.C. is that it's the epicenter of connectivity in terms of international conglomerates. You have some of the most ... the largest foundations located here, and it's kind of a source of government funding as well. So, recently we had a Saudi Arabian prince come on by. We end up having all sorts of wild people, like Miss America came on through. Sorry, Miss Universe, pardon me. So, we get all sorts coming through our doors, and they're all very interested in social impact and helping us make a change for the better in the world.
John Gilroy:And that's the theme for Halcyon House: social impact.
John Gilroy:That makes sense to me. Before you were born, health food stores would sell Spirulina, as it's a lot of different proteins and minerals and everything else. So, do people actually use the supplement, or is this a main food stay? Where do you see this fitting in?
Elliot Roth:There is a tribe right outside Lake Chad called the Kanembu tribe that actually uses Spirulina as a main supplement to their diet. However, I really see food as an enjoyment, and food should really be a pleasurable kind of experience. We shouldn't have to worry about our basic needs.
So when I was working out of my garage lab and trying to figure out how to provide for my own basic needs, I kinda came to this aha moment. Normally Spirulina, as a powdered substance, it's kinda bitter tasting. It's not all that great tasting, and that's why algae as a food substance hasn't really taken on. But when you have it fresh, it actually has no taste whatsoever, and it has this really interesting buttery consistency. You can use it as a spread, and when it comes out, it kinda looks like blended avocado. So I started eating it pretty much daily, as a means of providing for most of my protein needs.
John Gilroy:So you grew it yourself?
Elliot Roth:Yes. So you can grow this kind of thing yourself, and that's actually what we end up giving to people and selling to people.
Ricardo:How is it to grow this? What are the costs involved and difficulties?
Elliot Roth:Spirulina is incredibly easy to grow. All you really need air, water, light, and a little bit of salt. And you can grow it virtually anywhere as long as the temperature stays relatively constant, and the lighting is present. So what we do is we create the environment in which Spirulina can grow in the best possible way. It doubles every single day. So to put it in perspective, if I took probably about half this conference table worth of volume of Spirulina, and then over the course of three months, it would be the entire mass of the world's oceans. So I really see this-
John Gilroy:That's disturbing!
Elliot Roth:Yeah, well I see this as a solution to global malnutrition. Granted, it only grows in very specific conditions, which means that we cater the environment in our devices to grow it in the best possible way anywhere in the world so you can get protein at the press of a button.
John Gilroy:Now, what some people say is that the B-12 in Spirulina is not ingestible by humans, so you could have a B-12 deficiency, which is classic for a lot of vegans, isn't it?
Elliot Roth:Yeah, so one of the core micro-nutritional deficiencies we end up targeting is actually anemia, which is another component of the reason why B-12 is necessary for especially vegans and vegetarians. Spirulina has a high percentage of iron, so we can provide more bioavailable iron, whereas it might not provide bioavailable vitamin B-12. So there's other kinds of micro-nutrition we can provide, but initially we were just focused on protein, and it seems like, with protein, you can end up using proteins for a variety of different applications, not just for human nutrition. As everybody knows who's taken a biology class, proteins end up doing all the different functions of our body, and we've seen quite a bit of potential in the biotechnology industry.
Ikena:So, since it has so many functions, how would you describe your target market for ... What's your customer look like.
Elliot Roth:We have two different ways that we're approaching this. One is the very lean startup methodology. We initially kind of did the same thing that I was doing in my laboratory where we have a very simple device that we sell online right now at livespira.com. L-I-V-E-S-P-I-R-A. And that device is basically a hobbyist kit where you can go take it and grow your own protein in your own home. We sell it for $100 or so.
Then, by improving upon that device we can reach more and more of a market. So right now, we get a lot of hobbyists who are interested in growing it for personal nutrition, and then a lot of the education space, people who are interested in learning about algae. What we found, though, is that the main technology for the algae industry in total ... The algae industry in total is about $44.7 billion projected by 2023. It's one of the largest, most unknown markets out there, because it's in practically everything we just don't know it. But the peak of technology for the algae industry is digging a hole in the middle of the desert, and then putting algae in that hole, and putting it in the sun, and just letting it grow.
So we realized in order to bring the algae industry into the 21st century, as means of providing additional tools for them, we needed to create a small scalable device that allowed them to grow algae as quickly and efficiently as possible. So right now we have a lot of interest from the algae biotech industry, a lot of algae researchers who are contacting us, trying to figure out how they can work with us and partner with us. In order to automate their processes, make sure they have less contamination from what they're doing and what they're growing, and then produce high value products out of these different devices.
Ricardo:That's awesome. You mentioned Spira could be a solution to global malnutrition. Have you identified any areas of the world where you wanna put this in first? Why and what are some steps that you're taking to get there?
Elliot Roth:One of the biggest challenges for any kind of social impact company is balancing both your financial sustainability and those kind of goals along with your kind of impact goals. So by the very nature of our company, by growing Spirulina we end up absorbing carbon dioxide from the atmosphere 20 times as efficiently as trees. So by growing this you have a negative carbon output. So just by the nature of that, we already have a social benefit, but what we wanna end up doing even more so is distributing these kind of very simple devices to families in developing countries and nations in need. We ended up working with the World Food Program a little bit on developing different kind of strategies on doing that. Right now what we're trying to target is these high-end sales and high-end units in order to subsidize deployment of these units, particularly in areas of the Four Famines in Africa, which is a problem area in the world right now.
John Gilroy:Ikena, if you go to Mexico they have tortillas, you go to India they have chapati. I think there's cultural identification people have with food. I mean, it's culturally what they have. You can't get away from it. French bread. Do you think there'd be cultural objection to some of this? I don't know, what are you thinking Ikena?
Ikena:I'm not certain. I think it's a pretty good idea. I think it all kinda depends on how you decide to manage that marketing strategy.
Ricardo Real and Ikenna Nwankpa
John Gilroy:I guess that's the question for you. So how can you go into Africa and say, "Hey, have a bowl of algae, it's great for you!" I mean, you're gonna have some cultural resistance to that.
Elliot Roth:Yeah. So what we discovered is that there's an effect where especially developing nations take a look at the Western world and what we end up having and they say, "We want that." So if there's something that the westernized nations and the Western world is doing, people in developing countries point at it and they say, "Well they're doing it, we should also be doing that." So if we prove out our business model here in the United States and showcase that everyday people will eat algae in some kind of way, that it's a health food, then people elsewhere will end up eating algae. I like to kind of call to mind the story of lobster. So lobster used to be a prison food, they would give it to prisoners.
John Gilroy:In Boston, I remember.
Elliot Roth:Yeah, and sushi too. So sushi used to be something that poor people ended up eating. And then the paradigm ended up shifting and flipping when westernized countries and westernized nations they realized, "Hey, you know, we can make this a delicacy." And so I see spirulina as becoming a delicacy. Seeing it as something that people can end up using in their own homes. And already people are using these kind of green juices and drinks as a delicacy in the local markets, and so I see a very clear fit there.
Ricardo:I can definitely see it working in Latin America, and that same case happens the other way around in which things from developing countries come here, like quinoa or avocados become really popular. So I can definitely see it working from here to Latin America or Africa.
John Gilroy:The Halcyon House. So, have they helped you? Tell us a little bit more about that.
Elliot Roth:Yeah, so it's been a fantastic help. Our journey over the past couple years, we've been through a number of different programs ranging from RebelBio, which is a biotechnology accelerator program in Ireland. I like to say that we started as an international company before we even started as an American company. And then we went through Lighthouse Labs in Richmond, Virginia. We went to the World Food Program boot camp innovation accelerator. And then finally we landed here in Washington D.C. which is actually where I'm initially from. So it's very cool having this bit of homecoming as a means of being an adult in the area, and being able to connect with so many different people who are all actively pursuing different solutions to global challenges.
John Gilroy:So if I have lunch with Ikena tomorrow and I spend $10 for a hamburger, I don't know. Well, with Spirulina, what does it cost?
Elliot Roth:So one of our small devices can produce the same amount of protein as a cow in the same amount of time. A cow takes about three years to grow an entire cow, to produce all of the protein of a cow. Our device can do the same thing faster, cheaper, and less polluting. One of the harvests from our device produces anywhere from 10 to 20 grams of protein. So you'd be able to get all of the protein from that hamburger almost every single day at an incredibly low cost.
Ikena:Have you guys monitored the results of your consumers? Have they kinda seen an increase in their health and nutrition?
Elliot Roth:Yeah, so there's some initial studies that have been out that we personally haven't conducted, but Spirulina's been around since the 1970's or so, as a consumer product. What we found from our consumers is that they end up taking their Spirulina and feeling better because of it. So there's simultaneously both a positive health benefit from just taking additional protein, and then as well as a placebo effect from having the ability to, and the knowledge that you grew this yourself, that this is something that you ended up producing, that you then use as a food source. So people have reported feeling better, acting better. I feel better. I mean, I can leap tall buildings in a single bound.
John Gilroy:So Elliot, in the 70s we used to have blue and green algae, that they sold as Spirulina, and I don't think it caught on very well. It didn't explode. What do you think about that? Good, bad? You think that's gonna happen with your product?
Elliot Roth:So I think one of the main issues of the algae industry not only is the processing really a problem, it's the taste. The taste itself is one of the biggest hurdles of customer adoption right now. So the aha moment we had is, if you actually eat it fresh, when it's freshly harvested, it has no taste whatsoever. So part of what we're working on in terms of our technology development are different ways to keep that flavorless profile consistent so it can be used as an additive and an ingredient in foods.
Ricardo:In that same line, what's your favorite recipe?
Elliot Roth:So I recently made some Spirulina pancakes. You can make literal green eggs and ham. You can mix it into a smoothie as per usual. So all sorts of different recipes. I like mixing it with carbs because it ends up balancing out the carbohydrates. Spirulina has mostly protein and then a lot of micronutrients. Very little carbs, very little calories.
John Gilroy:I was at a satellite conference, I sat next to two guys from Indonesia who started talking about the foods they eat. They eat, of course, tempeh, which is a fermented soybean food. Up in Japan they have a soybean food called tofu, and they can make the same kind of arguments about vegetable-sourced protein, and it's more culturally acceptable. So I think that's your challenge there. I think, I don't know. Would you agree?
Elliot Roth:Yeah. The consumer side of things, in terms of the consumer adoption, that's been more of an issue when we're especially talking to investors who see the total market potential of this. For other algae companies and our B2B applications, that's where we really, really end up fitting right now. In terms of our technology development, it's more so being able to build our devices so that they can produce massive amounts of protein at very low cost. And then, steadily start replacing some of that animal protein in our diets. It should be such that you don't even notice that you're having hamburgers that actually aren't made from cow. So that's what we're working on.
Ikena:Would you consider yourself a disruptor to the food industry, since you're gonna kind of play a role of providing an alternative form of protein?
Elliot Roth:It's an alternative. It's not exactly a replacement necessarily. The animal industry is pretty bad at polluting the environment. However, I still think that there's a lot of farmers that exist solely dependent on their animals themselves. So if we can provide an alternate means of production of income for a lot of people in using our devices, then that's really what we wanna go for, more so than replacing their current sources of income completely.
Ricardo:What challenges do you have in the next six months?
Elliot Roth:Right now it's a big problem in terms of communication and education and understanding the potential of algae, and in terms of our devices and producing protein. So a lot of the investors around the area aren't necessarily familiar with algae, and so we're working on our communication strategy in that kind of sense, and our financing model, in order to make sure that we can scale and grow the company in this area. And so that's our biggest challenge right now is figuring out what is the overall market potential of what we're doing. Because even I don't know all the potential benefits and impacts that we could potentially make.
Ikena:What would be your vision for the company in, let's say long term, for 10, 15 years from now.
Elliot Roth:So, I definitely see there existing a device in every single person's home that produces nutrition. And, whether that's our device, which is what I'm hoping for, or some other device, I see a future in which that's possible, where you can get endless nutrition at the press of a button.
John Gilroy:My daughter makes her own yogurt, and she says it's real easy. But most people who work full time, commute, and maybe take classes in the evening, like these two gentlemen sitting across from you, there's no time. I mean, I don't know how much time Ikena has when he comes home. He studies, he gets a couple hours of sleep, he gets back at it again. He almost ... Food preparation is maybe a hobby that he can't have the luxury to enjoy. It almost seems like a hobby to grow this.
Elliot Roth:Currently right now, because it's so challenging to grow your own food in your own home, that's been the main hurdle. With algae in particular, it grows so quickly and so easily that you'd be able to produce it every single day, and we're working on our devices and our technology to get it so that at the press of a button, you just get a protein shake out of that. We've worked with a number of different advisors. One of our primary advisors is the CEO of Soylent. So, "Soylent Green is people." For us, algae really provides your main protein source, and to be able to get access to it readily is more so what we're going for. But we realize that people want convenience over the idea of growing it themselves, and so that's why we're working with a lot of businesses on making sure that algae is included as a protein source in other foods so it's convenient, and then readily accessible for people that wanna grow their own.
Elliot Roth:I think our main strategy right now is we see this as a platform technology to affect a lot of different industries. As a founder I think it's very important to build for sustainability, not necessarily for an exit. However, there are a lot of different companies out there that I can see us partnering with, and see our intellectual property ending up affecting and positively benefiting those companies. So yeah, I'm open to any kind of possibility as it occurs, and during my journey I'm looking forward to other people being a part of that story.
John Gilroy:Elliot, because I'm a radio guy, I can say the phrase that pays. So the phrase that pays is "sustainable protein." I think that's a nice two-word summary of what you're trying to accomplish here.
Elliot Roth:I like it.
John Gilroy:It's not bad. If people are listening to this and wanna have more information, what website should they visit?
Elliot Roth:They should visit livespira.com, and you can join in our alpha testing group as a means of getting and growing your own Spirulina in your own home. We sell these kits for $100 a pop, and they're really, really easy to end up setting up, and you can produce anywhere from 10-20 grams of protein every couple days.
John Gilroy:That's interesting. Well, we're running out of time here. If you would like to have show notes, links, or a transcript, please visit theoakmontgroupllc.com.
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