Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinators Podcast. Today's episode is with Diego Saez-Gil and Gustav Alstromer. Diego is the co-founder of Pachama. Pachama helps companies offset their carbon emissions through verified reforestation. Gustav is a partner at YC. You can find Diego on Twitter at dsaezgil, and Gustav is at Gustav. All right, here we go.
All right, guys. Welcome to the podcast. How's it going? Thank you. It's going great. So today we have Diego Seas-Gil of Pachama from the Winter 19 batch and Gustav Elstromer, who is a partner at YC. So today we're here to talk about Diego's company. Gustav, why don't you start it out? Sure. So I met Diego probably about a year and a half ago now. And our paths crossed in sort of like the interest for carbon removal. I don't know if you call it French science anymore, French sort of like area. But it certainly crossed in the area of trying to solve climate change and how you can use technology to solve climate change.
And it's something that we at YC has spent quite a bit of time on. Back in about a year ago, we released a carbon removal request to start up, which is a way for us to inspire people that work on new companies, what to work on. And we present a bunch of ideas there of things that people can work on. Diego has a very interesting approach to his company and love to hear more. But this is not his first company. So maybe before we get into Parchama, tell us about your background. You've funded a couple of different companies in the past. Maybe what's the journey you got here today? Sure. Thank you. And thank you for having me. Let's see. I grew up in Argentina, in the north of Argentina.
always surrounded by nature where I'm from. It's the Yungas, which is the last tip of the Amazon type rainforest in the north of Argentina. And then I had this big curiosity to travel the world. I went to see what was out there. Argentina is so far away from everything that I want to travel and see. So after finishing school, I got a scholarship to do a master's in Barcelona, moved from Argentina to Barcelona, took advantage to travel as a backpacker all across Europe. And then that journey led me to New York City to do an internship. And there I decided to start a company, which was kind of insane because at the time I was broke. I didn't speak good English. I didn't know anybody in the US and I had no idea how to start a startup. But I did it.
And the first startup was trying to solve the problem that I had at the time as a backpacker. So we built a mobile app to book hostels and bed and breakfast. And at the beginning, it was really hard because I had no idea. But eventually, we raised some capital. And eventually, we sold the company to a company called Student Universe that sold discounted flights for students. Right after that, I went to Argentina to visit my family. And I lost a suitcase on the trip. And that led to the next idea, which was how come there is no suitcase that you can track? And with a friend in New York, we decided to launch a crowdfunding campaign.
And started BlueSmart, which is a company with which we applied to Y Combinator and got selected in winter 15. Oh, wow. That led me to California. And... Building a hardware company was a completely new adventure for me. Really difficult. Did you have any background building hardware before? Not at all. My co-founder, Tommy, he had been to China sourcing merchandising, but I haven't ever been to China. And right after YC, we moved to Hong Kong. We opened an office there and we started going to Shenzhen every week. This company flew quite high. We raised a lot of capital thanks to YC and thanks to the attraction that we were having. We were selling a lot of our products.
And, you know, grew the team to over 60 people. And everything was going great, although always with a lot of challenges, like every hardware company, up until the airlines decided to ban lithium-ion batteries because the Samsung phones were getting on fire on airplanes, which is something you cannot expect as a startup to be, you know, have your products banned. What was the vision for the company? Like, what were we trying? Yeah, I mean, the vision was to use technology to make...
travel better. But there wasn't, like, a grand vision to improve the world, to be honest. And were you the first company to, like, embed a battery in a suitcase? We were. You were. And now it's all, like, standard. Every single new investment. Yeah. A lot of, you know, other great companies came afterwards, you know, bringing innovation to luggage. Which, you know, by the way, to me, the biggest lessons that I got from that startup was that you can introduce a new idea into the world. And this idea can spread as a meme. And then you have a new category in the planet. A conversation in a coffee shop in New York City can turn into a multi-hundred-million-dollar category.
And I was like, wow, okay, we have that power. Why don't we put it to good use to solve one of the biggest problems that humanity faces today? So anyways, that company ended up in this very difficult situation. We were able to sell the assets of the company, the technology and the IP, but the company didn't end in a good exit. So after that, I decided to take some time off, do a lot of soul searching, went with my two brothers to the Amazon rainforest, spent some time with some native communities there, got incredibly inspired by the power of nature, and also got incredibly heartbroken seeing deforestation happening there in the border of the Amazon and civilization.
Then moved here to the Santa Cruz Mountains, where I live now among the Redwoods, and from there started researching and thinking what I was going to do next. And climate change and the environmental crisis was my biggest concern. And at the same time, I had this inspiration by the forest where I had been. And reading a book, I discovered, or I learned, the potential that reforestation and forest conservation has to capture carbon at scale in the planet. And it's one of the most important solutions to climate change that nobody is talking about at the time. This is two years and a half ago.
So then that led me to research how technology could enable that solution. And I decided to come back to the road, even though I was quite still, I guess, broken by the previous experience. But I was like, OK, everything I learned, I need to put it at the service of this, which I think is the biggest problem of our generation. And then I went and I talked to you. And you received me. And I drew in a whiteboard the idea. And you told me, this is a really good idea. Go for it. And I can tell you what the idea is now with that introduction. But that's the background of how I got to Pachama.
So tell us what Pachama does. I mean, a lot of people have ideas on how to solve climate change. I believe technology will be absolutely the core of solving it. Like most big problems humanity have faced in the past, technology have somewhat helped solve. So maybe tell me about Pachama. What does it do? Sounds like a good idea to plant trees, but in what way do you change that? So the first question that we asked was, okay, if reforestation and forest conservation is such a...
big solution and such an easy solution. We know how to plant trees. Why are we not doing it? And the answer to that is, okay, somebody has to pay for that. We're not driving funding to do it. There's nothing economic incentive to do it today. And the mechanism that was created by the United Nations to create an incentive to drive solutions to climate change is carbon markets. Carbon markets work in the following way. The companies and organizations that are emitting CO2 into the atmosphere should take responsibility for those emissions and should compensate those emissions. And the way to do it is through an instrument that was created called carbon credits that
are given to projects that reduce emissions or recapture carbon from the atmosphere. Now, that's a market that had some growth at the beginning, and then after the financial crisis kind of crashed, but after the Paris Agreement, the market is growing again. And according to the World Bank, last year, over $80 billion went into carbon market initiatives around the world. And yet, when you look at the percentage of that funding that is going to forest conservation and restoration, it's less than 2%. So then the question that we ask is, okay, why does it gaze? And we learned that there were two problems. Number one, if you want to certify a forest project today, let's say that you want to plant trees, you have a land and you want to do reforestation or do forest conservation, you have to do a certification process that takes two years and it costs between $100,000 and $400,000 because you have to get auditors sent to your field to count trees and measure the size of a tree every certain period of time. And that is very inefficient. So as a result, there aren't that many projects. In the US, there are less than 50 projects.
that got certification for carbon credits. In South America, there's less. And, you know, the only projects are very large projects. In the other hand, buyers of carbon offsets, in a way, stayed away from forests because of a lot of lack of credibility about the projects. You know, how do I know that someone's planting a tree? How do I know that the calculation is being correct? How do I know I'm not going to get in trouble if there is a problem in the project? Was fraud common?
It's not common, but it happened sometimes. And there were people that took advantage of carbon credits because they're such an abstract concept. And there were some problems with projects in which illegal deforestation happened, maybe not under the awareness or control of the project developers, but something that happened and were problems in the past. Was the problems related to it was hard to track things or was the problems related to that the system was broken? Yeah, hard to track, hard to process that information in real time. It's just like a technology problem, not an intentional problem in the most part.
Here's where we come with a technological solution to all these problems. What we're doing is two things. First, we are using the latest on remote sensing and artificial intelligence to do our verification and monitoring of how much carbon is there in a forest and how much carbon the forest is going to capture. What do you mean by remote sensing? Remote sensing includes satellite images, LiDAR data, and any form of data that can be collected remotely and then analyzed with algorithms. And then we use...
machine learning algorithms, and I can go later into the specifics of how we do it, to analyze those data points of the forest, and you can be incredibly precise today at estimating carbon storage and carbon capture by forest. So those tools will help facilitate the certification of projects. They increase the credibility of the projects. They allow for constant monitoring, and they bring whole new transparency and efficiency to the onboarding of new projects. And then the second part of what we're doing is we are trying to connect the parts in a more...
direct way. Because today, companies that want to purchase carbon assets, they generally have to go to brokers. The brokers get their credits from a trader, the trader maybe from a retailer, the retailer from a lot of middlemen along the way. And if we are going to be onboarding these projects and doing this data analysis, why don't we connect directly the projects with the buyers? So in a way, we're building a marketplace as well that allows for companies and organizations that want to offset their carbon emissions to directly access trustworthy carbon credits coming from forest restoration and conservation around the world. And your platform allows me to know exactly what forest that I am...
where the carbon crisis is stored? Exactly. You can enter the platform. You can see different projects around the world. You can see exactly where it's located. You can see satellite images that get updated on a frequent basis. You can see photos of the forest. You can see how everything was tested, a description of the co-benefits. Because by the way, one important thing about forests is that not only they capture carbon, but they are holders of biodiversity, wildlife, water conservation, community impacts, job generation. So it's a very holistic solution to many ecological problems. And all that is described on the way that we display the projects on our platform. So I think one thing that might be interesting to kind of give this a little context is to talk about magnitudes.
So for an average, I mean, we don't have to talk about specific customers, but for an average company, how much land are we talking? How much carbon are they trying to offset? Yeah, so it's a good question because there are many companies that are, for the first time, evaluating becoming carbon neutral, offsetting their emissions. And it turns out that it's not that expensive. It turns out that for certain companies, for example, service companies or software companies, their emissions are mainly the electricity consumption in their offices and the travels of their employees.
There is an estimation that, you know, for a company like that, it's about six tons per employee per year, the emission. And today, you know, prices of carbon credits range between $5 and $20. So it's not a lot of money. Per ton? Per ton, yeah. So the offset of an employee in all of its, so like emissions, it's $50 or $100. It could be, yeah, between $50 and $150 per employee per year for a service company at that price level. And how much land is that, just for context? So let's see, one hectare of land of full-grown forest contains about 200 tons.
you know, the carbon credits get issue in terms of how much additional carbon a forest project captures. So that depends. There are different types of projects I can explain, but yeah, we have projects that... It's interesting, the question, because we want to start presenting this as, you know, by offsetting your emissions, you're protecting 10 soccer fields of forest, right? Or, you know, 50 soccer fields of forest. And we have, in fact, we're working on presenting tranches so companies can choose, okay, they want to participate in this tranche that's going to offset even beyond our footprint and focus on the protection that we're doing and not just on the carbon offsetting. So we talked a lot about
tons of CO2. So that's typically the unit that people are using to measure carbon emissions. The world is emitting 35 or 40 gigatons a year. That's an enormous amount. Can you talk about just like the opportunity of foresting? Like how big is this opportunity? Because I remember there's a venture firm, Bill Gates, investment firm, Breakthrough End Ventures. They say they were only investing things that have a minimum opportunity of, I think it's like one gigaton or one and a half gigaton or a half percent, some large number, which means that everything you have to go after has to be really large. How large is the opportunity in forests?
Yeah, so there was a paper published recently by a university in Switzerland that did an estimation of the potential for reforestation. And the numbers are like this. There's about 1 billion hectares in the planet that are available for forest restoration without competing with agriculture. In that land, you can plant about a trillion trees. And that trillion trees has the potential to draw down about 200 gigatons of carbon, not of CO2, of carbon. So CO2 is, you know, times 3.6. That is about two thirds of the emissions that we put in the atmosphere since the Industrial Revolution. So we're talking about...
Probably the most meaningful solution. And this is discounting, not counting forest restoration, forest conservation, which is the standing forest that we have today, especially the rainforest that capture a lot of carbon, right? In Amazon, in Borneo, in Congo, that we should stop deforesting right now because these forests continue to capture carbon over their entire lifetime. So yes, these are meaningful numbers. And the main problem that's missing is that the incentives aren't there. Is the incentives aren't...
that don't exist or they're not available to most of those landowners. Exactly. They're not available because the flow of capital going to carbon markets is growing 50% year over year since the Paris Agreement. And we hope that we'll continue to grow as more regulations come into place. For example, all the airlines starting in 2021 will have to offset their emissions. This is by regulations, right? It's called the Corsia Framework. And we are talking about 160 million tons per year that are going to be demanded by the market. So the demand for carbon losses will continue to grow. And our intention is to make it easier for that...
funding to go to reforestation and forest conservation and in the future other nature-based solutions because beyond forest there is you know what's called blue carbon which is restoring coral reefs and you know kelp forest and mangrove forest in waters there is regenerative agriculture which is another form of land-based carbon capture and so forth right so we hope that in the next few decades hundreds of billions of dollars will go to solving climate change as we realize the importance of this and the urgency And there will be a need for a platform that transparently, efficiently, and effectively transfers that capital to the right solutions. And we hope to be that platform.
Maybe we can dive in on the trust question. So there's a history of people not fully trusting carbon offsets. Why do you think that happened? And so like, what's the difference between a carbon offset and carbon credits? And how do you make sure that you build in trust in your system so that we can change that narrative? Yeah, I mean, the reason people didn't trust them is because lack of transparency and lack of data, right? It was a very paper trail type of industry. And we are trying to change that. We're trying to make it a digital asset in which you can trace digitally everything from how a credit was issued, how it was calculated, how it's monitored, and how it's traded. That should happen.
online, like every other industry that received the internet treatment. It's kind of like Airbnb. You can go and find every single place around the world. And as a homeowner or landowner, I can figure out what the value of my land is on the carbon markets. Exactly. Yeah. So the lack of trust was because of lack of transparency and data and information. And that's going to change. And just a specific question. How do you make sure that something isn't double counted? How do you make sure that someone is on your platform and another platform at the same time? Yeah. Yeah. Well, there are these registries and the registries are in a way cross-accounted, but there's definitely a need for more.
transparency tools and more technology tools, frankly, for these registries to assure that everything is uniquely accounted. There is also the issue of the national contributions to the commitments towards the Paris Agreement in which a country can claim the carbon capture of a forest. And maybe inside of that land, there is a particular private project that also got carbon credits. So you have to assure that you account for that. And again, it's just about data.
and making the data accessible and standardized. Got it. So one follow-up question here. So what's the difference between reforestation and afforestation? And also one common concern people have about forests capturing carbon is that forests eventually die or eventually burn or whatever natural cost of carbon being remitted into the atmosphere. Yeah. Yeah. So, okay, there are four types of forest projects and more broadly, but there is...
forest conservation, which is you have a standing forest and what you do is you commit not to cut it down. That's what's needed in the Amazon rainforest, for example, right? We need to pay people not to cut down the forest because there is an alternative that is cutting down the forest to do cattle ranching or to do agriculture and that's a big economic pressure on the Amazon rainforest. Secondly, there is what's called improved forest management. That's very common here in North America. These are forests in which timber logging was done and basically the commitment is to do a more regenerative type of harvesting in which you harvest every couple of decades, you replant trees, you re-enrich the forest.
And you can continue harvesting timber, but with a more sustainable practice. Number three is reforestation. And it's just planting trees in a place where there used to be a forest in the past. And afforestation is to plant trees in a place where there wasn't a forest in the past. So you have to prepare the soil. It's like basically decertifying or converting a desert into a place where a forest can exist. Way more difficult to do. And we kind of don't need to go there because there's a lot of...
places available for restoration. But at some point, we could. We have an engineering capacity to geoengineering and modify environments so powerfully as we did with civilization. We could easily a forest, for example, the Sahara Desert event. Wow. So in terms of differences between these methods, are there certain benefits to log sustainably? For instance, is a new tree giving off more or capturing more than an old tree? It depends on the species. It depends on the climate of the region. It depends on a lot of things.
All growth forests continue to capture carbon. The Borneo forest that has millions of years continues to capture carbon. And while a forest like every living ecosystem and organism dies out and regenerates, and when a tree dies out, yes, it releases some carbon, the net result is actually carbon capture. And there's a lot of data that supports that claim. That being said...
Wood is a very sustainable material, way more sustainable than concrete or other materials. So we should continue having tree plantations and harvesting for wood generation. And I think that doing improved forest management on timber areas is an important practice in which we are optimizing for both, for carbon capture and for wood production. So to that end, a question Gustav had written down. But sometimes are the incentives misaligned in the sense that farmers just want to create monocultures of crops? Like, hey, here, I can generate the most lumber with this type of tree. And yeah, do they go for that? Yeah, yeah. That's been the case definitely in agriculture and in the timber industry. And hopefully this creates an incentive not to do that. You know, in improved forest management, biodiversity is tested as well. So, and, you know, with data, we can, for example, with remote sensing data, with satellite images, we can determine markers of biodiversity that then can be accounted into the system.
So as a buyer of carbon, is that a choice I have to say, I want to make sure that the forest that I buy to capture carbon is diverse? Is that a choice I make or is that a choice you make on your platform? I mean, right now, the protocols that are out there to issue carbon credits have tests for biodiversity. It's one of the questions that you have to answer for. In the future, we hope to present...
proposals for new protocols, that's something we can talk about, in which all the available data gets accounted on the amount of credits that the project gets, and biodiversity should have a weight there. But also, yes, buyers can and they do prefer projects that protect wildlife, that have biodiversity benefits, because it's not just about carbon upsetting, right? Got it. So Yuko Fund Tomas is a machine learning engineer from Branch National, like a lending company. Talk to me how you guys use technology. So there's a lot of tech and the data sources that you get. Just talk to me about the platform. Yeah, absolutely. Yes, Tomas is a machine learning engineer, and we're building an amazing team on machine learning. We have a forest scientist with expertise on machine learning, and we just hired a PhD in math that solved an unsolved geometrical problem that made his name on the math world, and he's a machine learning engineer as well. And what we do is we are using a deep learning technique called convolutional neural networks that basically analyzes LiDAR data.
cloud of points of the forest that were collected by urban or by drones or by satellite. And in a way, it takes account of the shape of the forest and based on that, can know how much biomass is there in the forest. We train the algorithms with ground truth of plots that were measured by forest services, measuring the trees. And then you train the model and the model learns to detect, given a certain shape, how much carbon is there. And we demonstrated, this is the work of Elias, who is the PhD that works with us. For four years, he was working on this.
And he demonstrated in New England, less than 1.5% error at predicting how much carbon is there in a forest, comparing... By looking at LiDAR or looking at satellite? So you train the model with LiDAR, and then you apply it to satellite. I'm very curious. How do you account for the biodiversity in the model? Because I understand. So if you're mapping altitudes, that's one thing. But, you know, just...
Yeah. How can you tell different types of trees? Tree concentration, for example, is a market of biodiversity. Where there are many trees concentrated, there's more wildlife, for example. I'm not an expert on that, but this is some things that I'm picking up. So you can train the algorithm also to learn where there is more biodiversity. Canopy shape also tells you species group. So we can determine whether it's conifers or non-conifers, things like that. But ultimately, you still kind of need a little bit of ground truth to know it's like, OK, in this type of environment, these types of trees might be there. Yeah. What are the big technical challenges right now for you guys?
So in data collection, we partner with the two largest satellite companies in the world, and we're sourcing really good imagery from them. But we also benefit from collecting LiDAR data that's already out there in ground truth. field plots measurements. So yes, we were very hungry for data. The more data we have, the better the algorithms become. We're very excited about a NASA program called JEDI. They sent a LiDAR to the International Space Station, and they've been collecting LiDAR cloud points of force around the planet. They're going to be releasing this data now in November. We're going to be the first to jump into the data. If the data is good, we can expand our model to the entire planet. So yeah, from a technical perspective on the verification and monitoring side, it's just data.
But we are... Data is available equally around the world? Yeah, but sometimes it sits on, you know, the Forest Service of a country, right? Here, the U.S. Forest Service has been very open sharing data with us. We obtain a lot of data from Mexico. We're in the process of obtaining data from Peru and Brazil. So, yeah. Got it.
So your company is less than a year old. You scale up pretty fast. Where are you today? Just give us roughly an idea how far along you are. What are the bottlenecks from growing even faster? It's a common question we ask by companies when they're in the batch, but there's always something that prevents you from growing even faster. Yeah, I mean, we did accomplish a lot in just one year. At the same time, I feel that we should go faster, we should be accomplishing more, but that's always a sensation, I guess, for an entrepreneur.
We built this model that works very well in North America and starting to explain to South America. We partner with some of the largest forest project developers in these two regions. We onboarded over 10 forest projects in the US and Brazil into our platform that we analyzed, validated and listed on our platform. We have closed over 10 customers and we are in the process of closing some very big companies that are already... purchasing carbon offsets and that they loved our approach. I cannot say names yet, but these are very recognizable companies that have a high standard on everything they do. Who generally are the buyers of this? You mentioned the compliance markets are $80 billion. Is it mostly corporations or countries or individuals? Who are the buyers?
Countries purchase carbon offsets at scale, but it's mainly corporations. Corporations that are regulated in this market are energy companies, for example, transportation companies. But then there's a big and growing voluntary market of companies, technology companies, brands that sustainability is a big part of their value proposition. And then they decide to take responsibility for their carbon emissions. Becoming carbon neutral is a thing now. And all the sustainability departments on these companies are talking about it. Maybe talk about how the voluntary and the compliance kind of fit together. Because I imagine that the more...
the more volunteer the government offices are, eventually that will lead to the compliance or like, yep, this is something that we should be doing. Or how do corporations think about this? Is this something like we got to do is now because eventually the compliance, we got to get ready for it. Or are they like, this is what our customers or employees are demanding. What are the...
The big ones, like, why are they doing this? Yeah, for example, airlines are in the case that they are going to be regulated in 2021. And yet many have started already offsetting their emissions and even offering their customers to offset their trips. You know, for example, Delta and United have the option to offset your flight. It's not super easy to do it on their website. Hopefully we can help them with that. But that's the case. And then, yes, here in Silicon Valley, you know, employees, customers and investors are asking companies, what are we doing about climate change?
offsetting your emissions. Of course, first you have to reduce, try to use, you know, renewable energy and then offset what you cannot reduce. So is that what you think the future of the market is? It's just going to be companies like making bulk changes versus individuals saying like, you know, I'm going to offset one flight at a time. I think it's going to be everything. It's going to be governments, regulated industries, it's going to be voluntary companies and it's going to be consumers as well. I do think that consumers will have to vote with their dollars and we'll have to also take care of, we have to all take responsibility for our footprint. At the end of the day, companies are just creating products and services that we consumers consume, right? So, yeah. Yeah, makes sense.
One thing I want to talk about is fundraising. So after we put our request for startup, we got lots of people reaching out to YC. It was a combination of it was founders that want to start companies. Not that many of them, unfortunately. A lot of people wanted to work for these companies. There's like dozens of engineers at big companies that are like, which of the companies do you fund this year are going to work for? And like, we didn't have that many for software engineers at the time. And then there was investors and who wanted to learn many of them. And then there was people from the press. And it was like, this is one of the, I think that probably the request for startup generated the most amount of press interest of anything we've ever done. Still are getting in pings about this.
maybe tell us your experience on the fundraising side. So like you went out and fundraised, you had fundraising in the past and you kind of knew a little about how this went, but you're raising money for a company that's fixing climate change. It's like, what categories are like, do they put you and do you put them, the investors? And what did you learn about fundraising through the process? Yeah.
I was surprised by the fact that this time was my easiest fundraise and I was able to attract the best investors in my entrepreneurial history. And I think the reason was that smart and accomplished investors see that climate change being one of the biggest challenges of humanity is also one of the biggest opportunities of value creation for society and therefore the opportunity to create valuable companies. I think that the vision that we described resonated with many investors. Yeah, I mean, we ended up racing almost twice as much as we wanted to race initially from an amazing group of people. Our lead investor is Ryan Graves, the co-founder of Uber, who has experience building a global marketplace. We got investment from Chris Saka, who, you know, founded Uber at the beginning, PG invested, and we got, you know, investments from Social Capital, Global Founders Capital, and even some small checks from, you know, funds like Accel and Atomico. And all those investors, I guess, saw on us.
that we have first a strong technological component on the machine learning verification, and then strong network effects on the platform, on the marketplace, and the potential to scale to be a very large platform, provided that humanity awakens to the reality of climate change and the need to act on it. So I guess what I learned from that fundraising experience is that there is a lot of interest of investors on climate change startups. Did you have to educate them about the solutions through the fundraising, or did they come with a lot of prior knowledge? No, no, definitely. I mean, I had to, you know, share all this information that I didn't have myself, you know, at the beginning of this process, how current credits work, you know, what's the potential of forests and so forth. But they saw it quickly. And I think that, so yeah, I validated there's a lot of interest. Many of the investors I talked to keep asking me, do you have other companies working on climate change? So there is a lot of interest. You have to have a business model that is scalable. I think in that sense, YC was super useful for us on putting the Silicon Valley playbook lens.
into this company and avoid us to being trapped into a science project or a non-profit project. So we're a technology startup. We have to be scalable. We have to be defensible. We have to be a product that people want, make something people want. So this is funny. So it kind of boils down to the exact same things before. You aren't pitching this in any way differently than BlueSmart. Sure. Yeah, exactly. Yeah. Because I think the, I don't know, the overwhelming notion is that you have to pitch something differently if you're like trying to save the planet, right? But you're not. You just made a good business. I have to say something. To every investor that entered the company, I told them before accepting their money, look.
Okay, now you're convinced that this is a good business. I want to tell you, this is a long-term company. It's mission-driven. Always a mission is going to be before profits. And it's going to take time. You know, we're trying to build, you know, solve a big problem. So if you're not okay with that, don't invest. And some people didn't invest, but the majority love that because they saw the commitment that we have. And, you know, really good companies take time and really good companies are mission-driven. So, yeah.
So I mentioned after the request for startup on YC, we got a lot of engineers pinging us or like, what can I do? And it was mostly software engineers. I'm curious what advice you have for, I'm sure there are lots of people like this who work in a big tech company. They're a scientist, engineer, designer, product manager, and they want to work on climate change. Like, what do you typically advise them when you meet them? I've met many of these people and I struggle sometimes with sort of like where to point them because the number of software companies isn't that large. Like, yeah.
Yeah, I mean, the number one thing I advise them is to apply to Pachama. But we're not hiring that many people yet, though. Yeah, I mean, I agree with you. I wish there were more companies to point people to. I do encourage people to start their own companies. I encourage people to look for the few startups that are out there and go and help. And I think that also within big companies, you can try to find your place in an area that is working on climate change. Big companies like Google and Microsoft and Apple all have an area of focus on climate change. So go and work there and learn there or contribute there.
And even from governments, from nonprofit organizations, there's a lot of places in which we can contribute. Maybe a follow-up question there. So let's say I'm a software near and I wanted to start a company working on this. Do you have any specific areas that you think software is very needed on right now when it comes to climate change? I think that AI plus X...
There is a lot of opportunities to solve climate change. I actually made a list. I'm planning on writing a blog post at some point. But just to give you a few examples, AI plus optimization of shipments, AI plus optimization of travel and air travel, AI plus safety of nuclear plants, AI plus smart cities, AI plus smart electric grid, AI plus... Because these are such complex things that humans aren't good enough to actually make decisions there. Efficient agriculture. We should be being way smarter about how we produce the food that we produce.
I think there's a lot of software opportunities on making the use of resources on planet Earth more efficient. And so related to researching ideas and potentially starting a company, you don't have deep domain expertise. You kind of got excited about this and you went off on your own. How would you suggest someone begin their own research process? How do they start reaching out to people? Where do they go? Where do they find this information? Yeah, definitely. I think that...
Well, the first thing I did differently in this company was I took longer on the research phase. And that was super important, to be honest. I think in the first companies, it was okay to just jump into the pool because that Navy Tail also helped me get started. But I do think that taking about a year to just research and read books and talk to experts and discard ideas is super important. That's what happened to me this time.
Experts are incredibly open to talk with people that want to contribute. Are you talking like public sector, private sector, professors? University professors, researchers at labs, even executives at companies. My experience has been that people want to help. So yeah, I mean, just come out with ideas and go and talk to people. And you don't have to be an expert. That's the thing about entrepreneurship. You just have to be good at attracting resources, right? Absolutely.
So I have one last question I want to ask on here. So most startups don't have to spend too much time thinking about policy and governments. There's not really a priority for them. I'm sure this is something that is important for you because a lot of this is regulated and policy and government decisions probably go in your favor in the future. Probably more of this, not less. What do you hope to see in that angle? Yeah, I mean, definitely we are acting as if...
There's not going to be any change in regulation, and still this is going to be a big market. Yet, we do think that there should be more regulations that many of the big polluters, energy companies, transportation companies, industrial companies, should have an obligation to offset their emissions. And that's going to be an incentive for them to transition out of fossil fuels, right? So, yes, I'm always paying attention to the different, you know, initiatives like carbon trade markets or, you know, carbon tax initiatives in different places around the world. And my opinion is that, yes, this is what happened with aerosol, right, and the ozone hole. We fix it with regulations, and also we fix it with regulations.
slavery and torture and genocide, right? So things that are wrong have to have a regulatory framework to fade them out. So I do think that free markets are great, but at the same time, the role of regulations in a capitalistic society is to bring society to where everybody wants to go. Awesome. So just a couple of quick questions from Twitter before we wrap up. Sure. So Guillermo asks, what are some of the most important things you've already learned about the problem space since starting the company? Yeah. Well, I think that we learn a lot about the importance of all the different players that are out there in the market. For example, there are these registries that create standards and protocols. And they're super important because they've been studying this for many years. So we are going and partnering with them, trying to make them improve their protocols or put our technologies at the service of their protocols and standards. We learn, I guess.
that the importance of education, you know, frankly, this is a market that's very confusing, you know, so I didn't have as part of our strategy to have a content strategy, but now I realize that content is going to be super important. We need to create more awareness and more clarity. And definitely we'll learn a lot about the data part. We learn about, you know, how remote sensing is exponentiating the possibilities of capturing data on ecosystems. That's something that gets me really, really excited because one vision that we have for Pachama is that we can become this kind of like platform for understanding deeply all the ecosystems of the planet.
And, you know, this idea that Buckminster Fuller had of having an operating manual for Spaceship Earth, imagining a data platform in which you can know down to the genetic composition of, you know, every organism in a forest in one platform. So these are kind of things that we geek out in terms of data and we learn a lot about the possibilities. Yeah, that's super cool. One more question. So related, Ai asks, can food forest grown via permaculture methods be a better way to perform agriculture? Yeah, for sure. I mean, agroforestry is a very important practice that I think we need to do more. If we are going to feed 10 billion people, we need to find more regenerative forms of agriculture. And it turns out, according to data I read, that agriculture...
inside of a forest can actually produce more yield than traditional monoculture agriculture. So permaculture is another practice that has enormous potential. And these are things that, by the way, can also obtain carbon credits. So we hope to help also those projects get additional income through that. Awesome. Diego, thanks so much for coming. Thank you so much for having me.