This week, Persefoni co-founder and CEO, Kentaro Kawamori is joining us this week not only to talk about his climate tech startup that aims at helping asset managers, banks and other financial institutions measure their financial emissions footprint and purchase offsets. But he is also sharing his spicey takes on the fundraising landscape and what he thinks stands the best chance of combatting the climate crisis. Darrell, Jordan and Kentaro get into the importance of building the team that’s a perfect fit for the industry you’re disrupting and the Web 3 company “Holy Smokes” they’re all launching together. RSVP for Found Live at https://tcrn.ch/3ox8iS1
RSVP for Found Live. Don’t miss your chance to listen to episodes found early and interact with Darrell, Jordan, and their guests. On February 17th at 10am PT/ 1pm ET, Thor Fridriksson will be talking about his experience launching two viral games and founding his new company Rocky Road.
This week, Persefoni co-founder and CEO, Kentaro Kawamori is joining us this week not only to talk about his climate tech startup that aims at helping asset managers, banks and other financial institutions measure their financial emissions footprint and purchase offsets. But he is also sharing his spicey takes on the fundraising landscape and what he thinks stands the best chance of combatting the climate crisis. Darrell, Jordan and Kentaro get into the importance of building the team that’s a perfect fit for the industry you’re disrupting and the Web3 company “Holy Smokes” they’re all launching together.
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Darrell Etherington 0:00
Hi and welcome to found TechCrunch is premier podcasts where we tell you the stories behind the startups. I'm your host, Darrell Etherington. And joining me, as always, is the offset to my horrible carbon footprint.
Jordan Crook 0:16
Crop I always get to be the good guy in the and the duality of man. That's how we were up on this premiere podcast. We're
Darrell Etherington 0:24
mythic characters, and you're, you represent all good. And I represent all evil. And yes, it is a premier podcast. There's no other contenders that could claim such a thing. No, nation. That's it. Those are the two that don't even say the name of it. It's equity. It's equity. If you're, if you're TechCrunch fan, go listen to equity as well.
Jordan Crook 0:46
Yeah, or just keep listening here. And maybe equity when you get time when you're done with the found library. Yeah,
Darrell Etherington 0:52
that's right. Yeah. When here we have something they don't have, which is great guests. And this week, we've got Kintaro, cow Moray from Persephone. So for Stephanie is an accounting platform, but not your typical accounting platform. It basically accounts for your carbon footprint, and lets the companies large and small know if they're actually being as ecological as they're aiming to be. So keeps track of endeavors they're doing to, you know, reduce their footprint, but also their actual output and their actual impact on the environment and compares those things in much the same way that a financial accounting platform, looks at your books and says, Hey, are you actually making more money then you're spending, or,
Jordan Crook 1:40
like, across the same standards, like we the cool thing is like, we have math, that is real numbers. And so one company can say we're gonna reduce by 50%, another company could say by 25%, we're gonna do it these ways, you know, the 25%, or might be more just based on the standards that Persephone uses. So it's pretty cool. The idea of having it kind of like set across something real and true.
Darrell Etherington 2:06
And I think the more pessimistic among our audience might be saying, Well, why would anyone want that? Because they've been lying about this for years and getting away with it. And it's been great. And there's a few different reasons why that's not really the way that people can do business anymore. But Kintaro is much better at explaining it than I am. So let's go ahead and talk to him and let him tell you all about Persephone and the new green economy. Hey, Kintaro thanks for having me back. Yes, yeah, I do want to say right up front, because I feel like I should be
Jordan Crook 2:48
transparent about this. Otherwise, it's gonna get weird.
Darrell Etherington 2:52
No, and we and we need to be accountable. Since Persephone is all about accountability. We did record this episode previously. And just because of technical errors with the recording qualities, we unfortunately lost that entire episode. So as Kundera mentioned, he's back again, which we're thrilled about, it's been some time it's gonna be my brain is I think my RAM has like, I don't know, two weeks or something. And then it just entirely flushes. So I feel like it's gonna be new to me.
Jordan Crook 3:20
And one of my technical issues was that I only heard like popping and fuzz for most of our episodes, I literally don't remember cuz I wasn't there. All right,
Darrell Etherington 3:31
actually, like a lot has happened in the interim. Kantara that like, has reinforced the need for PR Stephanie, just for me personally, like we ran a space event and tons of people were talking about ESG and how they're all in the shoe business now. And, you know, we talked about last time, and it's a great time to be in this business. But I digress. Let's let you explain what Stephanie is for our audience who may not no
Kentaro Kawamori 3:54
sure thing. And yeah, ESG right now is like digital transformation six years ago, and then blockchain after that, like just don't have that in your business, then you're probably missing out. So for Stephanie, we are a climate management and accounting platform venture backed, we've raised about $120 million to date. We are headquartered in Tempe, Arizona, but a very, very global business. I think we have presence now in nine different countries, about 180 people. And we're SAS pure play company. And we've built a platform that helps ingest and manage all of the data required for companies and financial institutions to disclose their climate posture. And that includes their carbon footprint, but it includes a couple of other things as well like their trajectory toward achieving net zero according to the Paris agreements and a few other things.
Darrell Etherington 4:42
That's great. Like you mentioned, it's kind of like de rigueur now for companies and I think like we saw the trend and we stopped very close up me and Jordan and TechCrunch because it became a thing where you would have you know, all the major tech companies falling over one another to be like, we will be carbon neutral by year, whatever or will be water neutral, I think is the newest thing, right? Like by year, whatever. It just seemed like there was this cascade and it was like everybody has to get in on this. But for a while, I was just like, Okay. I mean, you got a nice blog post that you presented us and you seem pretty sincere about it. But how do we know? Yeah, like,
Jordan Crook 5:22
and how would we know later? Like the year comes around? And it's like, I'm looking at the building. Yeah, you could just be. We could be neutral right now. For all anyone? That's right.
Kentaro Kawamori 5:34
And there's a bunch of that going on. Yeah. I mean, it's like you remember when AI was in the venture world, right? Every company was an AI company. And every company now is trying to be a climate company. Hey, look, it's super positive, we're gonna see a lot of bad stuff happen as a result of that, like, I'm convinced you're gonna see the next WeWork type debacle when it comes to things like carbon offsets and those sorts of things. Right? There's a ton of money in demand, there's gonna be a ton of people building really great stuff, but you're gonna see some less than ideal scenarios. And we kind of call that greenwashing 2.0.
Jordan Crook 6:04
I mean, it feels a little bit too. Like there's the whole PR blitz that was happening for a long time like we do this. And we do that and look how great at all is, it feels like that greenwashing. 2.0 is more pervasive now in terms of like, the transparency, but that you guys are doing as well, right? Like, I don't know if this is new, or if I'm just literally the least observant person on the planet, but like, Amazon now has like a little tag, right? Like, if you're getting something that's I don't know what they call it green, proven sustainable, or something like that. I don't know what it is. But again, it's like your Amazon's like, I don't really trust you that much. Because
Darrell Etherington 6:40
they've had that thing to where they did like, they set up the boxes and said like this, this box uses however much less
Jordan Crook 6:46
this box belongs to Darryl, just though they don't do that do
Darrell Etherington 6:51
that. But I mean, roughly for the rights like mostly recycled material or whatever. I think we talked a bit last time about the Logitech thing like Logitech is, and a lot of consumer electronics makers now put a little label that's kind of like the dolphin free tuna label.
Jordan Crook 7:05
Oh, we all know how that one, the dolphin free tuna label.
Darrell Etherington 7:09
I mean, maybe Qatar you can tell us like how much of this is theater. And how much of this is people genuinely getting their act together to
Jordan Crook 7:16
people in an office who were taking like $250 checks to send out a sticker like it is with dolphin three tuna?
Kentaro Kawamori 7:23
There's definitely some of that. And yeah, I'll give you kind of the macro. And we can hone in from there. So you know, at a macro level, this is no coincidence, right? This is a secular shift, just like the population in most developed countries is moving primarily from agricultural country based sort of demographics into the city. When that happens, the demographics shift more democratic and left leaning over time we get to this point that we're at today, the importance of political and economical sort of priorities now include climate for the first time. And also, you know, it's devastating, but part of the reason that's the case is because climate change is real. Now 20 years ago, when Vice President Gore put out the inconvenient truth, it was this like specter that you couldn't imagine. And now there's a once in a century storm, you know, in Texas, knocking out power every year and like, doesn't make a whole lot of sense. Why is it a once in a century storm every year, right? So climate change is becoming real is one piece, as part of that demographic shift, consumers have demonstrated a willingness to pay a premium, what some call the green premium for greener and more sustainable products. That, of course, in the capital engine, that is our society creates a demand for products that companies are looking to go fill. But concurrently, you've had a really important development happen in the market, which is directly in line with why we're seeing regulatory movement now, and that is very left leaning LP constituencies in California. So think the teachers pension funds, the Canadian pension funds, the Norwegian pension funds gone to their asset managers, the private equity, the VC firms they've invested in over the last few years, they're now requiring climate disclosures from those asset managers. So then you have a bit of a domino effect. The asset managers and the GPS now have to go to their portfolio companies and say, What are you doing to get greener, I need your climate disclosure in order for me to create my climate disclosure. And that's creating a lot of network effects on sort of both sides of the pressure point, one on the capital stack, one on the consumer side. So there's a lot of forces sort of in the market happening that's forcing companies to go do this. And the last big one is the regulatory side. The SEC, right we've all seen Chairman Gensler has been really vocal and active in either pushing or about to push regulation for the crypto space for this backspace, same thing is happening here because so many companies are coming out and making climate claims. The SEC now views it as their duty to protect investors that Blackrock who today coincidentally dropped their latest CEO letter. We're climate again is at the forefront or anybody else is making climate claims that there needs to be a mechanism to create trust, like you guys mentioned earlier in those disclosures because they are tantamount now to financial disclosure. One
Jordan Crook 9:59
of the things that I I was curious about like, you know, if all of these different forces are working together, right to kind of ask for a standard bearer or like a trustworthy layer for this information, then for you, what is the single biggest scale up moment that you could have? Like? Would it be the SEC? Or would it be some big customer like an Amazon or like, what would be the big break moment, you know, that would instantly scale you up?
Kentaro Kawamori 10:25
It's definitely compliance. That's definitely regulation. So a great example is three weeks ago, when we were in 2021, only 200 companies globally, were required to disclose their footprint, according to a financial regulator, that was in New Zealand, fast forward. Now, by March, there's going to be 5500 companies, 4000 of those coming from Japan, mandated by their financial regulator to disclose their footprint, it's expected that the SEC is going to announce their disclosure requirement by the end of this quarter. And so the SEC announces it, and all of a sudden, you have now 5500 US public companies CFOs that need a solution yesterday. So our scale up moments are really interesting, because in the early days of our journey, you know, if you're an investor looking at Persephone, it's high risk, because you don't have Yeah, you don't have certainty around this regulation coming down the pipe today, almost completely de risk, because it's become such a global phenomenon and your certainty that it's going to happen in almost every major regulatory environment. So is
Jordan Crook 11:25
that like, wait and see for you? Or are there things that you're doing? Where you're having conversations with regulatory bodies, like, hey, like, You should do this now and not in six months? And that should be? Is that something that you have the kind of like have to throw around into in the first place? Or are you just sit back and wait, it's gonna happen. And when it happens, we will make it big,
Kentaro Kawamori 11:44
we definitely can't afford to wait and see, you know, there's a few that we can disclose publicly, we have been very closely working with regulators and policymakers around the world to help build these regulations. You know, for example, when we can disclose as in the EU Commission, it's going to be one of the most important governing bodies around a very specific climate disclosure framework. And our Chief Sustainability officers, part of that working group officially has been helping them do that some of the other agencies we help, you know, don't necessarily want us to advertise that. But yeah, you can very, very engaged globally, a lot of that has to do with one of the earliest moves we made as a company is we brought the foremost minds and experts from the sustainability standards setting world the framework world, Darrell, you mentioned, the EPA, Tamar Chief Sustainability Officer worked in the Senate literally wrote part of the Clean Air Act and was a Section Chief at the EPA. So super critical that we we kind of brought the influencers and the policymakers into Persephone early.
Darrell Etherington 12:41
And that also seems like both sides of the market are coming to it at the same time. It's not even like a thing where you need to wait for the company to mature for this to be on their list because of the pressure from LPs, right? Like that's a huge, quiet source of all kinds of stuff that I don't think a lot of people realized. And then honestly, like, I only realized talking to people on this podcast, and I TechCrunch generally, right, like LPS have crazy rules. And those rules have long dictated kind of like what is considered the moral edge of or compass of companies out in the market, right? Like we saw another example totally separate from this one is the only fans debacle, right? Like they were apparently going out looking for a big round and LPS were like no sex businesses, you can't your fund can invest in that. And so it was kind of off the table. And they went all over the place and then went back to the original business model. And some are doing the same way. Right. But that was one of the rare times where that power kind of comes to the fore, right, but it's there. And it's very interesting to me that it's now shifting, it seems like politically left, at least in terms of this one area or ideology, right. But it does make sense when you talk about the bodies that hold a lot of power, right? Like the teachers union here in Ontario is a massive one, right? And they're people who by and large think climate change is a problem. I don't think that's controversial to say. But yeah, that's great for you because it's coming from the earliest stages to the latest stages, right?
Kentaro Kawamori 14:05
Yeah. Look, I often say capitalism created the climate crisis, and it's going to fix it. And not everybody agrees with that. But your point, a regulation coming out a CFO or CEO and a board looks at that and goes, Oh, this is another, you know, license to operate kind of thing that I just have to do. But you want to get somebody moving and spending money on compliance threaten their wallets, exactly to your point. So when a CFO gets the call from BlackRock, it's actually a letter, they get a letter, usually annually. And it says you need to disclose your footprint, and you need to provide these specific climate aligned disclosure frameworks. And if you don't, we may drop you from this ESG index. And if that happens, that CFO can very clearly articulate to the board and CEO that says if I lose 3% of my float, if I'm a public company, for example, and this is bad news, or in Silicon Valley, right if the fundraising environment is so competitive If one tier one VC fund goes to the Ontario teachers pension fund, like you just talked about says I'm going to raise capital, but I refuse to give you climate disclosures. But the next one says I'll do it. And I'm going to lean really heavily into this. And I'm going to force my companies to decarbonize yeah, there's they're starting to make those capital allocation decisions differently.
Jordan Crook 15:17
This is all like hella mathy can tarot, right? We're talking financial math, we're talking climate math is a lot. So like, Who are you that you know all this math because it feels like you got your science brain and your banker brain going at the same time, which is impressive. How did you get there was a hell
Kentaro Kawamori 15:37
of a mathlete in high school. That was a first part. No, I'm joking. Yeah. So I, you're right. You know, I kind of live in both the financial worlds and in the operating world at the same time. So I'm an enterprise software guy, first and foremost. But I did stints in the energy sector at a large natural gas producer, and you want to get a hell of an education about a high emissions environment, go work at a company that produces natural gas. And that was one of the reasons that I went to go work there, I kind of looked at the other side. And it helped me figure out how exactly that world works. Then I did a stint in private equity and VC delivery active investor today, I've been an active trader since I was in my teens. I just love equity markets. So that's helped me a lot. But about 50% of our business today comes from the large global banks and private equities, you know, so we work very heavily within that world. And if you want to do business there, you definitely have to speak their language.
Darrell Etherington 16:29
That's why it seems as I'm listening to it, I'm not an expert in this area. I'm like, You're the one to do this. Because I don't think someone who comes from it primarily from one of the other areas involved, like has necessarily the authority to go and win this in the right way. Right. Like, I feel like if your background was primarily from the scientific side, or primarily from even just whatever the entrepreneurial startup world side, I think you would come at this the wrong way. But it seems like you're speaking everyone's language where they're instantly like this. This all makes sense to me already. I understand all of this, from my experience with it, like you said, like on the sustainability into from a capital perspective side. So I can easily integrate this into my existing thing, because it sounds like the people you're talking to are the CFOs. Right? Like you're not talking to? Or Or are you talking to, like more like, Chief Sustainability officers? Or is that even really a thing? Or is it more the financial side that's making these decisions?
Kentaro Kawamori 17:26
Yeah, first of all, thank you, you just gave me the exact opening. Because, you know, I like to keep it spicy. And I'm going to, I'm going to pull on a thread that you just created for me. But to answer your questions first. Yeah, absolutely. You know, we sell to CFOs. And GPS, first and foremost. And in banking, it's interesting, there's a new role that's popped up that's, you know, really called Sustainable finance these days. But you're also seeing the emergence of a new type of role that's really ESG. And that is an offshoot of an investor compliance and an IR function, first and foremost. And yeah, that what I was referencing as the string to pull there, I love to tell this story. Because if you're a VC and you're looking at how do I break into the space, and you just default to your de facto, I'm going to fund a team of software engineers that came from big tech or that come from the SAS background. Guess what, just because you have a background building SAS platforms and businesses selling to other tech, a CFO or GP couldn't care less. I want to know that you understand public markets, compliance, regulatory issues, and I was an officer at a fortune 500 public company that gives you thankfully, a lot of credibility, I would not be able to do what I do if I didn't also assemble a team that could speak to the sustainability frameworks and pay March sustainability officer I've referenced. He's been doing this for 40 years. I mean, yeah. Talk about sustainability. Og, right. From the earliest days of the EPA. That's who those buyers want to talk to.
Darrell Etherington 18:49
Yeah, for as much the business seems to like up end traditional models of doing things. I think it really does that. But it's also like, it's not something where you that move fast and break things approach seems to be effective, right? Like you can't pull it Uber and just like we're launching a rideshare program in this market and screw the municipal regulators. You can't just go in and be like, Look, we're tracking your carbon footprint we don't get it doesn't work at all.
Jordan Crook 19:16
guns blazing and very cowboy lives. No, like, it's interesting that you are the defensibility like no offense or anything, but like the idea itself, isn't that revolutionary, right? Like there has to be all kinds of people all over the place thinking like, oh, well, if there was just a framework, right to like, measure it, and then we all agreed upon it. That would be big deal. And regulatory is going that way. Right? So it's interesting that you and your team are like the moat almost like I don't know how, yeah, like team is important. And that's what investors are looking for. And, you know, one person can make something better than another person can if they're trying to build the same thing, but it seems so heavily weighted in teams direction in terms of your defensibility and kind of like why you can be a winner.
Kentaro Kawamori 19:58
You're spot on. This is the third iteration of an attempt for the carbon accounting market to come into existence, the other two flamed out and died, quite obviously, or else they would be here today. And I wouldn't be. But yeah, to your point, you know, this is the VC business. Currently, I think there is no such thing as a novel idea anymore. There's no such thing as, you know, a moat that can't be replicated quickly by other players that are well capitalized, you know, ideas are a dime a dozen, but the team to go execute it with the right plan. That's the rarest commodity in all of startups and venture today. And, you know, we lean heavily into that. I mean, we talk about talent density in our company, probably above any other concepts, you know, as we're growing this thing.
Darrell Etherington 20:40
Since you're a found listener, I'm gonna bet you're also pretty interested in startups and technology. Great news, we're going to give you an offer for 25% off a subscription to French plus, PC plus is our premium product. And when you get there, our deep dive interviews with some of the best startup founders and investors in the industry, you get surveys of different investors in different areas of expertise and geographies, you get market maps of opportunities in new and emerging industries. And you get deep dive look at some of the hottest startups out there, you can subscribe to TechCrunch plus at TechCrunch plus.com. That's probably the easiest way to get there. Or if you're already on TechCrunch, just follow the links for TechCrunch plus, and you'll get a prompt to subscribe. Once you're there, just enter the code, which is found the name of this podcast during checkout and you'll get 25% off a one year TechCrunch Plus subscription.
Jordan Crook 21:31
Are you a super duper huge fan of found the podcast, we have big news for you. So we're gonna start doing live recordings where you can actually come hang out with us, we always do this podcast on video, but we're gonna show that video to the world. Yes, and it's gonna start on February 17. We're gonna be doing it every other Thursday, our sister podcast equity is also going to be doing that on their alternating Thursdays,
Darrell Etherington 21:57
all the podcasts from TechCrunch. Together well separate. But yeah,
Jordan Crook 22:01
the TechCrunch podcasts are coming to you live. So that means you'll get to listen to new episodes early. And I think probably the best part that I'm excited about is you're going to be able to join in on those conversations. So you can log in to hop in, and you'll be able to chat your questions directly to us right within the episode and talk to our guests. And we'll be able to incorporate you know what you're thinking and what you're wondering about right into the episode itself. And those are all going down. We'll start on February 17. They all go down at 10am, Pacific 1pm. Eastern, every other Thursday, and we're gonna have some stellar guests. In fact, our first guest for February 17 is going to be Thor Fredrickson, if you don't recognize that name, you should he founded Quiz Up, which was a massive game back in the day. And then he also founded a gaming studio called Tea Time. And he's working on his third thing now serial entrepreneur, and he's two for two on creating hyper viral casual mobile games. So lots to learn there.
Darrell Etherington 23:04
Maybe he'll just dish maybe he'll reveal during that episode, what his next huge game is, we can't guarantee that asterisk asterisk.
Jordan Crook 23:14
Maybe he'll explain how he got to viral hits, and has yet to really bring them through on the successful business side of things. So you just find the link in the description if you want to register to come hang out with us.
Darrell Etherington 23:31
So the challenge actually brings up another question I had about, you know, it's very competitive space for especially tech side talent, right? And when you're going out to the market, and you're trying to bring on engineers, is it difficult competing in that just let's bring up Elon Musk? Because why not? But you know, he has he makes claims to being an environmentalist or whatever. But like a company like Tesla is taking obvious big swings at the climate problem, at least as perceived by most of the public in the mass media. Right? But like, how do you go out to that same town market? I mean, maybe you're not competing directly, but like software engineers, just not predators? How do you go to them and be like, Look, this is what actually makes a difference. I know that it doesn't sound as thrilling as building an electric sports car or whatever. But like, this is the real, the real impactful business.
Kentaro Kawamori 24:19
Yeah, we have people from I would say almost every single big tech company, every big consultancy that have joined us in the last two months alone. And there's two components to it. I would say, you know, one is definitely the mission. You know, it's one thing we've all watched the show Silicon Valley on HBO right? I mean, it's it is that's the world we live in, right when companies that are building ad tech or marketing tech are talking about how they're gonna change the world. You know, we work was talking about elevating the world's consciousness like please, let's if there's ever a sign, we took it too far that was it. But in our business, you don't have to do that. It is such a hard line, quantitative line to the impact that you can have. We don't go out and say, we are directly responsible for reducing the footprint of our customers. So you can see exactly what we're helping bring to the forefront of their disclosure processes, right didn't exist before. So the, thankfully we're in a space and a solution that the mission is crystal clear. And then the second is, you know, we have the benefit of walking behind giants like Tesla, like all of these great companies that have started in the last 10 years, whether they're startups are more established. And culture is king. That's really what's behind this great resignation, I think is there is a better way to work. And yeah, there's companies that have figured it out. And I'll tell you, some of the most influential for me have been Tony Chu at DoorDash, or Brian Chesky. at Airbnb, they've straddled the line between transparency and performance in their cultures. To be clear, they're not perfect. I don't think such a thing exists as a perfect company. But they were definitely seen the emergence of a new way of working the post COVID acceleration of go into remote. It's just one tiny part of that. Yeah, remote
Darrell Etherington 26:02
plays a part. But like, you're also talking about culture. And I mean, you know, Chesky One recent example. You know, Airbnb was, I think, pretty widely lauded without real much criticism for making available their platform for people who wanted to host Afghan refugees, right. And it was a laudable endeavor by them. So is that kind of where you're talking? Like, they're more than mission alignment as well? Or is it? Is it more just like how people work? Or is it like, I guess, are they one of the same two or like values? Expression? Right?
Kentaro Kawamori 26:31
Yeah, it's a combination. If you're, you know, a company where their startup are large, and you have absolute hard stance that this is how people have to work people value flexibility and agility immensely, right. COVID has taught us that whether it's the remote work, or when you do your work, whatever it may be. But I think there's also, you know, a significant component, as you mentioned, to the mission, and it comes back to data you guys can tell I like data. There's a massive shortfall of software engineers in the US alone, there's a massive shortfall of cybersecurity professionals. So if you have that much optionality in your career, you know, there's constantly a 2 million, you know, individual's supply of software engineers, and if you're can make the same amount of money have the same amount of upside, you know, working at meta, and being tantamount to helping expose underage girls to content that shouldn't be exposed to, or you can go apply your same exact skills, which are really good and badass add and go work towards a cause, like solving climate change. Pretty easy choice. Yeah, I
Darrell Etherington 27:33
mean, I don't think metas mission has ever been boiled down so neatly. But I can't say you're wrong. I don't know. I'm not gonna say you're
Kentaro Kawamori 27:45
out there. The company does a lot of really great things. I'm excited for them to take us into the metaverse truly. But man, they've got to fix some stuff.
Jordan Crook 27:52
Wow. Really? You're excited about going into the
Darrell Etherington 27:54
I was gonna ask the same thing. Are you genuinely excited about the metaverse?
Jordan Crook 27:58
Like classic Kintaro dry?
Kentaro Kawamori 28:00
I have been aspiring to be that guy on the floating Bed Chair from Wally for the past decade. You haven't seen that's the dream. That's my dream, like just plug in, have a big gulp in my right hand. No watch. That's
Jordan Crook 28:17
the dream while simultaneously fixing climate change. It's like if I can
Kentaro Kawamori 28:21
do both, that's too much to even imagine. Yeah.
Darrell Etherington 28:24
Wow, that's surprising. But is there a tie in is the metaverse in your long term roadmap of Persephone? I have no idea how that would happen. But I have to ask now.
Kentaro Kawamori 28:33
Wow. It's not. But I wonder how many people have given a microphone with TechCrunch would have just said yes.
Darrell Etherington 28:42
Yeah, and you could have thrown in but you're also offering NF T's. You know, you can group carbon offsets as an NF T and then the public can purchase it.
Kentaro Kawamori 28:50
Well, funny. You mentioned that, you know, let's definitely schedule a follow up to deep dive into our NFT meta verse convergence. Great ambitions.
Jordan Crook 28:58
Yeah. I mean, if your climate and web three Watch out. Wow. Yeah. I did. I
Darrell Etherington 29:07
also I wanted to ask about when you announced your funding round, I think you also notice a free tier. So I do want to get more into kind of like just the product strategy behind like, there's the obvious one with SAS products is like you want to give people a chance to get in with low commitment. But like what do you envision happening for a customer when they come on and sort of play around with this kind of accounting for carbon footprint? And like a free trial,
Kentaro Kawamori 29:30
definitely, in our instance, is actually not going to be a trial. It's going to be full on what we call in our world scope, one through three carbon accounting. So the product led growth motion for us or the freemium version, as some people would know it. It's all about how do we democratize carbon accounting, which has an extremely high barrier to entry around the technical knowledge required to do carbon accounting. And look, this is where I'll give you my classic take on it. There's no company that does freemium out of the goodness of their hearts, we still have To share a duty to generate profits for our shareholders. And if you hear the words democratize, which is also one of the buzziest words in Silicon Valley, democratization to me is just an indication of an industry or solution as attacking a really inefficient way of doing something, drastically lowering the technical barrier of entry and the cost to do it. And that's what we're doing. Because right now, if you want to do high quality carbon accounting, and you're a smaller company, you're medium sized business, it's insanely expensive, you've got to bring in specialized consultants, you're mired in spreadsheets, you're always looking 12 months, retrospectively, it's just a really broken sort of process. And that's mostly just because there hadn't been a need to do it in such a high quality and such a high frequency. And so, you know, our freemium motion is really all about, we just need to democratize this layer of carbon accounting to everyone as quickly as possible. It's also obviously a huge mission component to that. But there's a huge amount of use cases that are unlocked after the carbon accounting is performed. And that's things like how do I make decisions to ultimately abate carbon and price that, you know, within my company or within my supply chain? How do I understand what physical climate risk means for my assets? And how do I price that into my, you know, forward looking statements. And in my budgeting, we're just at the very beginning stages of what's going to be a really rich ecosystem of software and data solutions in the climate ecosystem.
Darrell Etherington 31:25
So it's kind of like a solving the like, you don't know what you don't know, problem before customers can progress further down the pipeline, right?
Kentaro Kawamori 31:33
Yeah, the most overused trope in our business is you can't manage what you can measure. And right that's, that's about as clear, as you can say.
Darrell Etherington 31:42
And I also mentioned at the top of the call, and we should actually say, because we keep saying ERP, or I mean not ERP ESG I think people know, to your peers, but ESG, we keep saying I don't know if everybody knows what that is. But in Yeah, in good writer form, I say it right at towards the end of the call is at the top of the call. But it stands for environmental, social, and governments. And it encompasses a lot of things, including climate sustainability. But what I also have found since then, because since we talked last time, we ran our space event, TC session space in case people want to go check it out. I worked in a plug, I get to do that, I guess, right? It's our show, but the
Kentaro Kawamori 32:19
also persephone.com/web Three
Darrell Etherington 32:24
does that go anywhere? Anyways, like every every company there was talking about ESG. And they were all Earth observation companies, right. And they see this as their huge, huge opportunity. And that is from the satellite operators and constellation operators down to the data management companies that connect people on earth. I think that's what they're planning for. Right? So is there opportunity there for you to how do you work with those companies? Are they kind of like once removed from sort of your direct line of business?
Kentaro Kawamori 32:54
There's gonna be huge integration into high quality satellite imagery and observation used for whether its emissions observations, so think, you know, a refinery, or oil and gas wells, how can you monitor those for things like methane leaks, but also deforestation. So great company, great connections with the founders that Marc Benioff at Salesforce and others have invested in as NCIX as natural capital exchange, they've built software to monitor forest which have been tagged and allocated for offset purposes, because that's a huge challenge. If you're selling somebody offsets predicated on the fact that these trees are going to be around to sequester carbon, you have to have a way to monitor that so that people don't log that forest. Right. Yeah. So that's one instance. And you're gonna see there's a huge race right now happening around that. There's a couple of interesting things around that, you know, to penetrate low canopy, sort of environments and forestry, for example, like you need low orbit sets with, you know, higher degrees of resolution around there imagery, you need to have infrared capabilities, some of those things that don't exist in existing infrastructure to some degree. But yeah, you're gonna see one of the richest datasets that crosses GIS data, IoT data, financial data, all converging to come up with a complete climate picture.
Darrell Etherington 34:12
Yeah, that's amazing. We actually had so we had ESRI and their time, but the GIS stuff, and then we had this super small Canadian company called Vivonne, which is doing hyperspectral, which is another huge like, could because it can capture so many more wavelengths than an optical camera or whatever, you could see the chemical makeup of what's going on on the ground, right, which would be massively useful for this kind of thing. So it's like another thing that stands to your benefit in that like, for the first time ever, people can actually get an accurate picture this this used to be not just commercially available, right? So if you said, Oh, we have this forest, and this is the makeup of the forest. And it's like these types of trees with this type of density. So it'll offset this much. There was no way to prove that except for take their word for it, or maybe like do a drone fly by or like send out somebody to check All right, and then count the trees individually or something and take measurements, so nobody was ever doing. So now, all that data is gonna be there available. I know. And like anyone can access it like me, or you could access it right, we can go on depending on the platform if we have enough cash that month, or whatever. So that's another thing that just seems to be a good reason people are now finally thinking about, it's like, oh, we can actually get caught.
Kentaro Kawamori 35:22
Yeah, and there's some really cool open source trends around that happening. So Google just finished a multi year effort, when the Textile and Fashion Industry, which has a horrible footprint, if you didn't know that, by the way, I know fast fashion is just absolutely terrible for the environment. And they just basically created this huge high fidelity emission factor set, which tells you the average carbon intensity of a unit of measure, you know, in this case, textiles, why they just put it out there for use and consumption. And we're seeing that sort of open source trend by industries pretty consistently. So it's gonna be really interesting to see, you know, you're you're seeing a large scale, open source community around these data sets forming, which is going to introduce some unique concepts. And, you know, plug web three.
Darrell Etherington 36:08
But you talked about a consumer choice, right? And in consumer choice, once it runs properly informed becomes even better, right? Like, it's like once you can actually just go and find wire cutter, but for ecological footprint, right of like, various garbage distributors, or whatever, like, that's huge, because then you can actually make it's not just based on like, well, I did it because I heard they were kind of ethical, and like, they make claims on Instagram, that they're ethical, or whatever. It's like, no, no, I went check the site. Actually, Jordan, this is a product idea for us. We should start out wire cutter for three economic impacts. I can't figure out the web three part yet, but I also just don't.
Jordan Crook 36:49
Don't do it. tokenize some count on the token sale? Yeah, I mean, you're an investor. So sure. Okay.
Darrell Etherington 36:57
Yeah. So a question kind of related is that I wanted to ask you, because you mentioned it earlier that you imagine there's gonna be like, a WeWork moment. Are you interested at all in being the propagator of that, like, is there a time when per Stephanie you go and like they have a content arm? And it's like, company XYZ is the worst when it comes to just saying they're logically minor, but they're shitty? And like, here's the whole thing exposing them? Is that something you would do? Or is that something you would leave to kind of? Maybe TechCrunch, for instance, or whomever else?
Kentaro Kawamori 37:26
So great and loaded question for us, right? It could destroy our business, if we take that sort of path and expose customers to you know, practices that are less than kosher. The really easy answer for us is we just don't do business with those companies. We have dropped major companies from our client roster, because we've seen that and we've seen that in the sales cycle and just refuse to even continue engaging there. So yeah, that is for sure gonna happen I think you'll see a decrease quite a bit as this becomes a more mature sort of cycle. But yeah, you know, we definitely don't want to be there's a whole other part of our world which is Raiders, companies that rate ESG performance of other companies, which is talk about just a massive gamut of just raft. Holy smokes. Yeah, we don't we don't want to go into that space. We want to be the objective hard, plain truth disclosure player out there.
Jordan Crook 38:16
Yeah, that makes a lot of shit call that wire cutter. Holy smokes, by the way, that Holy smokes.
Kentaro Kawamori 38:23
Was like it has like a vaping.
Jordan Crook 38:25
Yeah, yeah.
Darrell Etherington 38:28
Yeah, but I was gonna like, that makes a lot of sense to the you wouldn't enter into that, because you can see how it's kind of like, when this is more insight or a crap but like, let's say, a media outlet, like starts awarding a bunch of things, like sets up a lot of awards that giveaway yearly. And you're like, Wait, what is that? Isn't that kind of their suspect about how you grease those wheels? Or like how so people get chosen for that and what the relationships are what you're selling against it? I don't want to call it Forbes directly, but I might as well just call them out. Now at this point. We're edgy. Qatar is doing Yeah. Yeah, no.
Kentaro Kawamori 39:10
We still love you.
Darrell Etherington 39:12
Listen, there are some great people at Forbes. I'm not painting with a with a broad brush here. Say the business model. Everyone's business model is suspect in media, because it's not a business that works. But oh god. Wow.
Jordan Crook 39:23
And products don't quit. And Tara doesn't even have a job. Yeah. Like, I'm not enough, isn't
Kentaro Kawamori 39:30
it? I mean, it's, it's better better to let the journalist wrote the journalists, I think, what else can I
Darrell Etherington 39:36
hear? I think one thing I'd like to kind of we're nearly at time, but I do want to hear more about kind of like where you think this market is headed? Like, what is the kind of like next instantiation of a product like this or what kind of like future products do you see becoming necessary as more companies come on board
Kentaro Kawamori 39:54
with this? You know, in the short term, you're gonna see a high emphasis on that disclosure and compliance use case. I think They're sort of a naivete and players in our space that think they're going to rush to help these companies decarbonize. And we sort of abide by the maxim, that sunlight is the best disinfectant. You want to drive a big company to change its behavior, first, expose that behavior, if you want to jump straight into, I'm going to help you electrify your fleet, I'm going to help you source renewable energy, I'm going to help you apply pressure to your supply chain, and I'm gonna help you build green products. That just doesn't work, right, like systemic change that takes a sort of progressive approach. And the first step in our world is disclosure. After that disclosure, use case has been well established and becomes sort of a muscle in the enterprise and financial institutions, you're going to see this next great phase of value creation around sustainability. How can I more systematically produce greener products? How can I systematically access ESG tagged capital that comes with a lower cost of capital? How can I issue green bonds? So you're gonna see this this hard shift, it's kind of a spectrum I see that's on the very left side is compliance focused behavior. And on the right side is value creation, you're gonna see that shift towards value creation after that base muscle is established to calculate and then disclose consistently. And that's what's so exciting about this space. You know, there's some really clear use cases around what is the physical risk of my assets? I mentioned that earlier, but there's going to be stuff that people are imagining and cooking up, which you're not going to be able to imagine. And we've joked about web three on here. But there's actually been some really interesting distributed teams formed over the last two to three months alone that are trying to figure out how do we apply, you know, crypto, Ledger's to create fidelity and trust into offset projects and funnel dollars to those, you know, we joke I think there's a ton of potential there. But yeah, it's it's the very early days. And if you want any indication that this is here for the big time, you know, Larry Fink at Blackrock recently went on the record and said, it's his opinion that the next 1000 unicorns minted are going to be related to the energy transition and to climate. And I'm certainly inclined to believe them.
Darrell Etherington 42:04
That's great. Yeah, I think that you brought up a good point there that I hadn't really thought of either. That is that if you rush to the solutioning side of things, you're maybe not fixing the problem at all. If a company is doing a bunch of initiatives that on the surface are contributing to their overall footprint. It's like, well, you're ignoring everything else about your business that is actually causing damage, because you're not even aware of it, right? You've just rushed to the thing that perhaps satisfies current regulation, or perhaps looks good in the public press, but like doesn't necessarily address your actual core problems.
Kentaro Kawamori 42:38
Exactly. I always liken it to dieting, right if somebody comes along and gives you a magic diet pill. Do you remember back in the day, Hydroxycut had ephedrine in it, and, man, you could cut weight real fast because you lost your appetite. But that was not sustainable, and you didn't fix the underlying patterns of probably an unhealthy diet. Same thing for a company, if the unhealthy diet in this metaphor is behavior, that's high emissions? How are you going to retool your company and your supply chain and your operating procedures to be greener over the long haul?
Darrell Etherington 43:11
Yeah, that hydroxyurea that brings back memories? Maybe Maybe dates me too, but I remember because it was like super popular for a while and then yeah, they ephedrine thinking, and it was like, Yeah, you know what else is great for losing weight speed, but you don't just do speed.
Kentaro Kawamori 43:28
I also, I also love that I'm old enough now to where I can make those type of jokes. It's awesome. And I would love to unpack your Hydroxycut stories. That's.
Darrell Etherington 43:39
Listen, it was a friend's first. Well, thanks very much. Katara. I mean, amazing. Amazing to chat with you. Again. Also amazing. This is our second time and I had just as much fun if not more fun than the first time. So appreciate that. Yeah. Good on, you.
Kentaro Kawamori 43:56
Know, thanks again for having me. Let's do it again. I'll invite you guys to my podcast next time. Yes, boiler. I don't have a podcast.
Jordan Crook 44:03
But web three. Yeah. It's still one on one three call.
Kentaro Kawamori 44:07
There we go. I have to go. Now I have to build a ledger based podcast platform.
Darrell Etherington 44:12
Yeah, get started on the math. As far as I understand it, there's a lot of math and under that.
Jordan Crook 44:17
Yeah. I feel also weird that my compliment was like I'm conveyor to talk to you twice. So I like what however you want to reframe that.
Kentaro Kawamori 44:27
I love that that to be more one of my co founders, Kim would resonate with that highlight sheet. We've been working together for five years, and she still tells me that four times a week, so it's the highest compliment for me.
Jordan Crook 44:39
Cool. There we go. Nailed it.
Kentaro Kawamori 44:41
Yeah, I'll just leave it with private equity is one of my most important client segments. I apologize if I've offended any of my private equity over our clients. I love you. That's all I have to say. I think what you do is great.
Darrell Etherington 44:53
That's a great All right, Jordan. So as I mentioned, not in the intro, but surely into our conversation we did rerecord with Kintaro, which meant that we got twice the time with him we usually get with founders. Does that change your kind of opinion of Qatar? Did you feel closer to him?
Jordan Crook 45:22
I didn't feel closer to him. But I maybe felt like I get him a little bit more like I appreciate him more. Yeah, because he had the same knife's edge wit and kind of boldness across both tastes
Darrell Etherington 45:38
right. He's very consistent, which is hard to do. If you do an A put on that was that's real.
Jordan Crook 45:43
Yeah, that's who he is. Yeah. Cuz if he just came for take one and was like, had his chest puffed out and was ready to take on, you know, VC and all the different things that he did? And then that wasn't the real him, he wouldn't have been able to do it. So well, the second time around, if anything, he exceeded expectations in terms of kind of going for
Darrell Etherington 46:02
Yeah, so I like how he prefaces his spicy moments, too. So you know, they're coming. It gives you a sense.
Jordan Crook 46:08
Yeah, he's like, get ready. Here I come. Yeah.
Darrell Etherington 46:12
What do you think about Persephone? And then like, kind of the overall position of like the climate, economy and greenwashing. I know, he was talking a lot about
Jordan Crook 46:22
pretty big question there. Daryl
Darrell Etherington 46:24
load, man? Oh, well, I
Jordan Crook 46:26
mean, I think that what I found most interesting, and kind of what got me thinking about how I look at other companies and other founders was twofold. One, Persephone is a story of amazing timing, right? This could have been built 10 years ago, it could be built. And
Darrell Etherington 46:42
that's the funny thing about it. Because we've had a couple of cycles of this green revolution thing. And people definitely attempted the first time around. But I think it wasn't the right time, right? To your point, like the data wasn't there. So
Jordan Crook 46:54
yeah, and I might like eat my words, right? Maybe like the version of Persephone that launches five years from now will be far more successful. I don't know. But like, it feels like, based on what's happening in the regulatory landscape, this is it right? Like this is the moment where something like this could be really a game changer could really take off. And the second piece that I took away from this is the defensibility of the team and how important that is, you know, like VCs talk about what is it like market team fit, or product team fit? This is a great example of that, where you have someone who is interested in the green side of things, right. And like the sustainability side is a mission but can speak the language of the people who maybe aren't, and really kind of help them frame why Persephone is important. And, you know, I think that that's an interesting facet to look at when you're trying to understand a startup because the idea itself is not revolutionary. It's not, you know, even really that special. It's this combination of timing and team that has made Persephone really special and promises to be successful. So I thought that piece was really interesting in the way he broke that down.
Darrell Etherington 48:01
Yeah, I mean, it is we're stepping back and thinking about like, what his we talked about his background, and you know, how that influences how He sees things like he's a markets nerd, right. Like, he loves that type of finance. And it means that his approach is very much reliant on that, like his approach to this is like, solve it, like big finance would solve it or solve it, like the SEC would solve it, right? So we kind of took for granted like, that is the way to do it in the conversation. I'm sure other people have different perspectives, but he's very convincing that that is the way to do it. Like when he says that capitalism created the climate crisis, and that's what's gonna fix it. That's a statement. That is, I think it's pretty controversial. It would be controversial in a different context. It wasn't controversial in the moment, but like, it's almost the same as saying, in a different, totally different frame of reference, like capitalism created the US healthcare crisis, that capitalism is gonna fix it, right. And I think you'd get a lot more people just immediately being like, oh, wait a minute. What
Jordan Crook 49:03
do you think that's right. Right. Although, like, now that you say it, how loud it sounds much more promising than the government doing
Darrell Etherington 49:10
it. Well, that I mean, that's, that's again, the the controversy, American perspective is that it is always better for corporates than the government to do right. Whereas other places are
Jordan Crook 49:22
rarely like it's better, but like, maybe more realistic because we've just lost such faith.
Darrell Etherington 49:27
Yes, I think that's the the issue, right? Because it's become so ratified that like, oh, the government is bad at doing things in an apt and then everyone else is better. If you go other places in the world. They don't necessarily accept that as a ground truth. Right, of course. But anyways, in the moment talking to him, I was like, Yeah, this makes sense. And I do think in an American context, it probably does make the most sense. Yeah. It's an approach that I think we could have had more debate on. But again, it's just like one of those things where like Qatar is very convincing on this and I think that's, that really benefits him when he's going into these conversations. So with investors, you don't
Jordan Crook 50:01
realize until it's too late that you made me want to argue. Right? Exactly. Like he's already got it.
Darrell Etherington 50:07
Yeah, he's got my money. But yeah, he was great. And I was glad we got the chance to talk to you again, actually, even though you know, it was it was not an intentional thing. But it ended up being a great conversation that I think, you know, just kind of like, built on stuff that we had already raised in the first conversation. I think we got into more depth here. And I think, honestly, the benefit of a couple months meant that I had a better understanding of this problem, too. So I feel like it was more fun. It was one of those things where it's like, oh, no, I didn't do any of my homework. And the test is today, and then you get to class. And it's like, well, you know, a huge blizzard means that school shut down. So you've got another couple of days into
Jordan Crook 50:48
a quiz that doesn't count towards your grade, and then we'll do the test later. Yeah. I mean, I'm never properly prepped for an episode. So I felt the same. But actually, I felt like I had more prep, because we did it was
Darrell Etherington 51:01
Yeah, exactly. Yeah. But I mean, if you agree with us, regardless of whether you agree with us or not, you should go rate us.
Jordan Crook 51:11
Five stars we're looking for. I can remember it. And leave us a review too. We love those. Yeah,
Darrell Etherington 51:20
leave us a review. And just tell us like, What's your favorite thing about Jordan and Wotch. This is just a writing prompt for you. In case you're
Jordan Crook 51:28
like, where do I start? Use found language? Yeah,
Darrell Etherington 51:31
yeah. Use that. Yeah. Do a stanza that has I don't remember.
Jordan Crook 51:36
All right. Well, I mean, whatever it is that cause your heart to listen to us by the very end of this episode, which is where we're at. Then you obviously like us enough to just pop in? Yeah.
Darrell Etherington 51:52
By myself, TechCrunch news editor Dale Etherington and TechCrunch Managing Editor Jordan crook. We are produced by Ishaku Kearney and edited produced by Maggie Stamets TechCrunch his audio products are managed by Henry pick of it. You can find us on Apple podcasts, Spotify, or wherever you get your podcast and on Twitter at twitter.com/found. You can also email us at found@techcrunch.com You can call us at 510-936-1618 and leave us a voicemail. Also, we'd love if you could spare a few minutes to fill out our listener survey at bit. Ly slash found listener survey. Thanks for listening. We'll be back next week.
Transcribed by https://otter.ai