Monday, Feb 7, 2022 • 52min
Kentaro Kawamori, Persefoni
Play Episode
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
Read more
Talking about
Speakers
(3)
Kentaro Kawamori
Darrell Etherington
Jordan Crook
Transcript
Verified
Darrell Etherington
00:00
Hi and welcome to Found,
TechCrunch's
premier podcast, where we tell you the story behind the startups. I'm your host, Darrell Etherington, and joining me as always is the offset to my horrible carbon footprint?Share
Jordan Crook
00:17
I always get to be the good guy in the duality of man.
Share
Darrell Etherington
00:22
That's how we worked.
Share
Jordan Crook
00:23
On this premiere podcast.
Share
Darrell Etherington
00:24
We're 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. That's where the rivalry has gotten to now, don't even say the name of it. it's Equity, it's, Equity. If you're a
TechCrunch
fan, go listen to Equity
as well, come on.Share
Jordan Crook
00:47
Yeah. Or just keep listening here and maybe Equity when you get time, when you're done with the Found library.
Share
Darrell Etherington
00:53
That's right, yeah. And here we have something they don't have, which is great guests. And this week we've got Kentaro Kawamori, from Persefoni. So, Persefoni 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.
Share
01:20
So it 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 than you're spending or...?
Share
Jordan Crook
01:39
Like, across the same standards. The cool thing is that 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 going to do it these ways, you know, the 25% or might be more, just based on the standards that Persefoni uses. So it's pretty cool, the idea of having it kind of like set across something real and true.
Share
Darrell Etherington
02:07
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 Kentaro is much better at explaining it than I am.
Share
02:27
So let's go ahead and talk to him and let him tell you all about Persefoni and the new
green economy
. Hey, Kentaro.Share
Kentaro Kawamori
02:42
Hey Darrell, thanks for having me back.
Share
Darrell Etherington
02:44
Yes. Yeah, I do want to say right up front, because I feel like-
Share
Jordan Crook
02:48
We should be fully transparent about this, otherwise it's gonna get weird.
Share
Darrell Etherington
02:51
I know, and we and we need to be accountable, since for Persefoni is all about accountability. We did record this episode previously and just because of technical areas with the recording qualities, we unfortunately lost that entire episode.
Share
03:07
So, as Kentaro mentioned, he's back again, which we're thrilled about. It's been some time, iit's going to 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 going to be new to me.
Share
Jordan Crook
03:21
And one of my technical issues was that I only heard like popping and fuzz for most of our episode. So I literally don't remember, because I wasn't there.
Share
Darrell Etherington
03:30
Alright. Actually a lot has happened in the interim, Kentaro, that has reinforced the need for per Persefoni. Just for me, personally. We ran a space event and tons of people were talking about
ESG
and how they're all in the ESG
business now. You know, we talked about it last time and it's a great time to be in this business, but I digress. Let's let you explain what part Persefoni is for our audience, who may not know.Share
Kentaro Kawamori
03:54
Sure thing, and yeah,
ESG
right now is like digital transformation six years ago, and that Blockchain after that. Like, if you don't have that in your business, then you're probably missing out. So Persefoni
, we are a climate management and accounting platform. Venture backed, we've raised about $120 million dollars to date. We are headquartered in Tempe
, Arizona
, but a very, very global business.Share
04:15
I think we have presence now in nine different countries, 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 that zero according to the
Paris Agreement
and a few other things.Share
Darrell Etherington
04:43
That's great. Like you mentioned, it's kind of, to regard now for companies, and I think we saw the trend, and we thought 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, by year whatever.Share
05:08
It just seemed like there was this cascade, and it was like everybody has to get in on this. But for a while it 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?
Share
Jordan Crook
05:22
Yeah. Like and how would we know later, the year comes around and it's like, I'm looking at the building.
Share
Darrell Etherington
05:28
Yeah, you could just be like, we did it!
Share
Jordan Crook
05:30
We could be neutral right now for all anyone knows, right?
Share
Kentaro Kawamori
05:35
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 that was trying to be a climate company. Hey look, it's super positive, we're going to see a lot of bad stuff happen as a result of that.Share
05:49
I'm convinced you're going to see the next we work type debacle when it comes to things like
carbon offsets
and those sorts of things, there's a ton of money and demand, there's gonna be a ton of people building really great stuff, but you're going to see some less than ideal scenarios and we kind of call that greenwashing
2.0Share
Jordan Crook
06:05
I mean it feels a little bit too like there's a whole PR blitz that was happening for a long time of like, we do this and we do that, and look how great it all is. It feels like that
greenwashing
2.0 is more pervasive now in terms of like the transparency bit that you guys are doing as well, right? I don't know if this is new or if I'm just literally the least observant person on the planet, but Amazon
now has like a little tag, right?Share
06:29
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
. I don't really trust you that much, because-Share
Darrell Etherington
06:40
They've had that thing too where they sent out the boxes and said like, this box uses however much less.
Share
Jordan Crook
06:47
This box belonged to Darrell just a week ago.
Share
Darrell Etherington
06:51
They don't do that, do they? But I mean, roughly for the rights, like mostly recycled material, whatever. I think we talked a bit last time about the logitech thing, like logictechs and a lot of consumer electronics makers now put a little label that's kind of like the "dolphin free tuna label".
Share
Jordan Crook
07:06
Oh, we all know how that went. The dolphin free tuna label.
Share
Darrell Etherington
07:09
I mean, maybe Kentaro, you can tell us like how much of this is theater and how much of this is people genuinely getting their activity.
Share
Jordan Crook
07:16
Are there are two in an office who are taking like $250 checks to send out a sticker, like it is with dolphin free tuna?
Share
Kentaro Kawamori
07:24
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.
Share
07:46
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 specter that you couldn't imagine.Share
08:06
And now there's a once in a century storm, you know, in
Texas
, knocking out power every year. And that doesn't make a whole lot of sense, why is it a once in a century storm every year? So climate change
is becoming real as one piece.Share
08:17
As part of that demographic shift, consumers have demonstrated a willingness to pay a premium, what some called the green premium, for greener and more sustainable products. That of course, in the capital engine that is our society, creates a demand for product that companies are looking to go fill.
Share
08:33
But concurrently, you've had a really important development happened 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 teacher's pension funds, the Canadian pension funds, the Norwegian pension funds, going to their asset managers, the private Equity
, the VC
firms that have invested in over the last few years. They're now requiring climate disclosures from those asset managers.Share
08:59
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.
Share
09:16
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 Gansler has been really vocal and active in either pushing or about to push regulation for the crypto space, for this back space. Same thing is happening here.
Share
09:36
Because so many companies are coming out and making climate claims, the SEC now have used it as their duty to protect investors. That
Blackrock,
who today coincidently dropped their latest CEO letter or climate again, is at the forefront. Or anybody else who's 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.Share
Jordan Crook
09:59
One of the things that 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?Share
Kentaro Kawamori
10:26
It's definitely compliance, so it'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.Share
10:50
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 company CFOs that need a solution yesterday.Share
11:05
So our scallop moments are really interesting because in the early days of our journey, you know, if you're an investor looking at Persefoni, it's high risk. Because you don't have, you don't have certainty around this regulation coming down the pipe. Today? Almost completely derisked because it's become such a global phenomenon and you're certain that it's going to happen in almost every major regulatory environment.
Share
Jordan Crook
11:25
So is 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, you should do this now and not in six months, and this should be the, is that something that you have? Like, do you have to throw around into in the first place, or you just sit back and wait, it's going to happen, and when it happens, we make it big?
Share
Kentaro Kawamori
11:45
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 policy makers around the world to help build these regulations.
Share
11:57
For example, one we can disclose this in the
EU Commission
, it's gonna be one of the most important governing bodies around very specific climate disclosure framework. And our Chief Sustainability Officer is part of that working group. Officially has been helping them do that.Share
12:12
Some of the other agencies we help, you know, don't necessarily want us to advertise that. But yeah, you can very, very engage 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 standard setting world, the framework world.
Share
12:28
Darrell, you've mentioned the EPA. Tamar, Chief Sustainability Officer, worked in the
Senate,
literally wrote part of the Clean Air Act
and was the section chief at the EPA. So supercritical that we kind of brought the influencers and the policymakers into Persefoni early.Share
Darrell Etherington
12:42
Yeah. It 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? That's a huge quiet source of all kinds of stuff, that I don't think a lot of people realize.
Share
12:58
And then honestly, I only realized talking to people on this podcast and at
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?Share
13:14
We saw another example, totally separate from this one, is the
OnlyFans
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.Share
13:27
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 so we're not doing this anymore, 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?
Share
13:48
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 there, 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?Share
Kentaro Kawamori
14:06
Yeah. Look, I often say capitalism created the
climate crisis
and it's going to fix it, and not everybody agrees with that. But to your point, a regulation coming ou, t the CFO or CEO and the board looks at that and goes, oh, this is another, you know, license to operate, kind of thing that I just have to do.Share
14:21
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, to 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.Share
14:44
And if that happens, that CFO can now 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, this is bad news. Or in
Silicon Valley
, right?Share
14:56
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, and 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. They're starting to make those capital allocation decisions differently.Share
Jordan Crook
15:17
This is all like hell of mathy, Kentaro, right? We're talking financial math, we're talking climate math, it's a lot. So like, who are you? That you know all this math, because it feels like you've got your science brain and your banker brain going at the same time, which is impressive. How did you get there?
Share
Kentaro Kawamori
15:37
It was a hell a mathlete in high school. So that was the first part. No, I'm joking. Yeah, so you're right. You know, I kind of live in both the financial world 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.
Share
16:01
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 wquity in BC, still a very active investor today. I've been an active trader since I was in my teens, so I just love equity markets, and so that's helped me a lot.
Share
16:18
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.
Share
Darrell Etherington
16:30
That's why it seems, as I'm listening to it and I'm not an expert in this area, you're the one to do this. Because I don't think someone who comes primarily from one of the other areas involved, has necessarily the authority to go and win this in the right way, right?
Share
16:46
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 out this the wrong way, but it seems like you're speaking on everyone's language where they're instantly like, this all makes sense to me already.
Share
17:02
I understand all of this from my experience with it, like you said, like on the sustainability, 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 our the CFOs right?
Share
17:17
You're not talking to or... or are you talking more to, like chief sustainability officers, or is that even really a thing, or is it more of the financial side that's making these decisions?
Share
Kentaro Kawamori
17:27
Yeah, first of all, thank you, you just gave me the exact opening, 'cause you know, I like to keep it spicy, and I'm gonna I'm gonna pull on a thread that you just created for me. But to answer your questions first, yeah, absolutely.
Share
17:37
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.Share
17:57
And yeah, 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 this 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.
Share
18:13
Guess what? Just because you have a background building sass platforms and businesses selling to other tech, CFO or G. P couldn't care less. They 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.
Share
18:33
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 Mark, the sustainability officer I referenced, he's been doing this for 40 years. I mean, talk about a sustainability OG, right, from the earliest days of the EPA, that's who those buyers want to talk to.
Share
Darrell Etherington
18:49
Yeah, for as much as the business seems to upend traditional models of doing things, I think it really does that. But it's also like, it's not something where that move fast and break things approach seems to be effective, right?
Share
19:02
You can't pull at Uber and just like, "we're launching a rideshare program in this market and screw the municipal regulator"s. You can't just go in and be like, "look we're tracking your carbon footprint and we don't give a f**". Like, it doesn't work at all.
Share
Kentaro Kawamori
19:16
Definitely does not.
Share
Jordan Crook
19:17
Guns blazing, very cowboy vibes. It's interesting that you are the defensibility. No offense or anything, but the idea itself isn't that revolutionary, right? Like, there have to be all kinds of people all over the place thinking like, oh, well if there was just a framework to measure it, and then we all agreed upon it, that would be a big deal and regulatory is going that way, right?
Share
19:37
So it's interesting that you and your team are like the moat, almost. Like, I don't know how... yeah 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 in kind of like why you can be a winner.
Share
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.Share
20:11
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 executed with the right plan, that's the rarest commodity in all of startups and venture today.
Share
20:32
And you know, we lean heavily into that. I mean, we talked about talent density in our company probably above any other concepts. You know, as we're growing this thing.
Share
Break
Jordan Crook
21:31
Are you a super duper, huge fan of found the podcast. We have big news for you. So we're going to 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 and it's going to 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, all the podcasts from TechCrunch
together separate. But yeah, the TechCrunch
podcasts are coming to you live.Share
Break
Darrell Etherington
23:31
So, the talent 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?Share
23:48
But you know, he has, he makes claims to being an environmentalist or whatever. But a company like
Tesla
is taking obvious big swings at the climate problem, at least as perceived by most of the public and the mass media, right?Share
24:02
But how do you go out to that same town market, I mean, maybe you're not competing directly, but like software engineers to software engineers, 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 this is the real, the real impactful business?
Share
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.
Share
24:33
You know, it's one thing. I mean, we've all watched the show Silicon Valley on HBO, right? I mean, that's the world we live in, right, when companies that are building art tech or marketing tech or talking about how they're going to change the world. You know,
WeWork
was talking about elevating the world's consciousness. Like, please, if there was ever a sign we took it too far, that was it.Share
24:53
But in our business, you don't have to do that. It is such a hardline 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, but you can see exactly what we're helping bring to the forefront of their disclosure processes, which didn't exist before. So the thankfully we're in a space and a solution that the mission is crystal clear.
Share
25:18
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 or 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.Share
25:37
Yeah, there's companies that have figured it out, and I'll tell you some of the most influential for me have been
Tony Xu
at DoorDash
or Brian Chesky
at Airbnb
. They've straddled the line between transparency and performance in their cultures.Share
25:51
To be clear, they're not perfect. I don't think such a thing exists as a perfect company, but they were definitely seeing the emergence of a new way of working and, you know, the post
Covid
acceleration of going to remote is just one tiny part of that.Share
Darrell Etherington
26:03
Yeah, remote plays a part. But you're also talking about culture and I mean, you know,
Chesky
one, it is an 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 lot of endeavor by them.Share
26:22
So is that kind of what you're talking like, they're more the mission alignment as well? Or is it more just like how people work, or is it like I guess are they one and the same too, or like values expression, right?
Share
Kentaro Kawamori
26:32
Yeah, it's a combination of your, you know, company whether startup or 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.Share
26:53
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 massive shortfall of cybersecurity professionals. So if you have that much optionality in your career, you know there's constantly a two million, you know individual supply of software engineers.Share
27:10
And if you 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 badas set, and go work towards a cause like solving climate change? Pretty easy choice.Share
Darrell Etherington
27:33
Yeah, I mean especially when you put it like that. I don't think
Meta's
mission has ever been boiled down so neatly, but I can't say you're wrong. I don't know, I'm not going to say.Share
Kentaro Kawamori
27:44
I had to throw a dagger out there. I think 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.Share
Jordan Crook
27:52
Wow, really, you're excited about going into the
metaverse
?Share
Darrell Etherington
27:55
I was gonna ask the same thing, are you genuinely excited about the
metaverse
?Share
Jordan Crook
27:58
It was just like classic Kentaro drive.
Share
Kentaro Kawamori
28:00
I have been aspiring to be that guy on the floating bed chair from
Wall-e
for the past decade. If you haven't that-Share
Jordan Crook
28:11
That's the dream?
Share
Kentaro Kawamori
28:12
That's my dream, like just plug in, have a big gulp in my right hand and just, you know, watch-
Share
Jordan Crook
28:17
That's the dream while simultaneously fixing climate change. That's like...
Share
Kentaro Kawamori
28:21
If I can do both, that's too much to even imagine.
Share
Jordan Crook
28:24
Yeah.
Share
Darrell Etherington
28:25
Wow, that's surprising. But is there a tie to the
metaverse
in your long term roadmap for Persefoni? I have no idea how that would happen, but I have to ask now.Share
Kentaro Kawamori
28:34
Wow, it's not. But I wonder how many people given a microphone with
TechCrunch
would have just said yes.Share
Darrell Etherington
28:42
Yeah, and you could have thrown in that you're also offering NFTs. You know, you can group carbon offsets as an
NFT
and then the public can purchase it.Share
Kentaro Kawamori
28:50
Well, funny you mentioned that, you know. Let's definitely schedule a follow up to deep dive into our
NFT
metaverse convergence ambitions.Share
Jordan Crook
28:59
Yeah, I mean, if your climate and web three, watch out everyone else.
Share
Darrell Etherington
29:04
I did, I also, I wanted to ask about when you announced your funding around. I think you also noticed a free tier. So I do want to get more into kind of like just the product strategy behind. There's the obvious one with SAS products, just like you want to give people a chance to get in with low commitment. But 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, in like a free trial?
Share
Kentaro Kawamori
29:31
Definitely. And in our instance is actually not gonna be a trial, it's going to be full on what we call in our world scope 1, 2 and 3
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
.Share
29:53
And look, this is where I'll give you my classic take on it. There's no company that does freemium out of the good of their hearts, we still have a fiduciary duty to generate profits for our shareholders. And if you hear the words democratized, which is also one of the buzziest words in
Silicon Valley
. Democratization to me is just an indication of an industry or a solution that's attacking a really inefficient way of doing something, drastically lowering the technical barrier of entry and the cost to do it.Share
30:21
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 a 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.Share
30:41
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. There'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.Share
31:02
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 from 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.
Share
Darrell Etherington
31:26
So it's kind of like a solving the you don't know what you don't know problem before customers can progress further down the pipeline, right?
Share
Kentaro Kawamori
31:33
Yeah. The most overused trope in our business is "you can't manage what you can't measure". And that's about as clear as you can say it.
Share
Darrell Etherington
31:43
And I also mentioned at the top of the cal, l and we should actually say because we keep saying ERP, I mean, not ERP,
ESG
. I think people know the ERPs but ESG
we keep saying and I don't know if everybody knows what that is. And yeah, in good writer for my say it right towards the end of the call, is supposed to be at the top of the call, but it stands for environmental, social and governments, and it encompasses a lot of things including climate sustainability.Share
32:06
But what I also have found since then, because since we talked last time we ran our space event, TC sessions space in case people want to go check it out, I worked in a plug I get to do that I guess, right? That's our show, but-
Share
Kentaro Kawamori
32:20
Also, persefoni. com/webtree
Share
Darrell Etherington
32:24
Does that go anywhere? Anyways, like 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's 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?Share
32:47
So is there opportunity there for you? How do you work with those companies? Are they kind of like, once removed from sort of your direct line of business?
Share
Kentaro Kawamori
32:55
There's gonna be a huge integration into high quality satellite imagery and observation used for whether it's emissions observation, so think, you know, a refinery or oil and gas wells, you know, how can you monitor those for things like methane leaks, but also deforestation. It's a great camp of great connections with the founders that
Marc Benioff
in Salesforce
and others have invested in, the NCXm it's Natural Capital Exchange.Share
33:21
They've built software to monitor forests which have been tagged and allocated for offset purposes. 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.
Share
33:38
So that's one instance and you're 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 environment and forestry, for example, you need low orbit sats with you know, higher degrees of resolution around their imagery. You need to have infrared capability.
Share
33:57
Some of those things that don't exist in existing infrastructure to some degree. But yeah you're going to see one of the richest datasets that crosses GIS data, IOT data, financial data, all converging to come up with a complete climate picture.
Share
Darrell Etherington
34:12
Yeah, that's amazing. We actually had, so we had
Esri
and their time with the GIS stuff and then we had this super small Canadian company called Weaver, which is doing hyper spectral, which is another huge, like it because it can capture so many more wavelengths in optical camera whatever, you could see the chemical makeup of what's going on the ground, right? Which would be massively useful for this kind of thing.Share
34:35
So it's like, another thing that stands to your benefit in that, for the first time ever, people can actually get an accurate picture of this. This used to be not just commercially available, right? So if you said, you know we have this forest and this is the makeup of the forest, and it's these type of trees with this type of density, so it will offset this much.
Share
34:54
There was no way to prove that except to take their word for it, or maybe do a drone fly by, or send out somebody to check, right? And count the trees individually or something and take measurements, so nobody was ever doing it. So now all that data is going to be there available.
Share
35:08
And 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. It's like, oh we can actually get caught, right?
Share
Kentaro Kawamori
35:22
Yeah. And there's some really cool open source trends around that happening. So,
Google
just finished a multiyear effort in the textile and fashion industry, which has a horrible footprint. If you didn't know that by the way, you know, fast fashion is just absolutely terrible for the environment.Share
35:38
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 the textiles. They just put it out there for use and consumption. And we're seeing that sort of open source trend by industries pretty consistently.
Share
35:56
So it's gonna be really interesting to see, you know, you're, you're seeing a large scale open source community around these datasets forming, which is going to introduce some unique context, and you know, plug web three.
Share
Darrell Etherington
36:08
But you talked about consumer choice, right? And consumer choice, once it runs properly informed, becomes even better, right? Once you can actually just go and find a wire cutter but for ecological footprint, right? Of various garment distributors or whatever, that's huge. Because then you can actually make it, it's not just based on, well I did it because I heard they were kind of ethical and they make claims on Instagram that they're ethical or whatever.
Share
36:35
it's like no, no, I went and checked the site. Actually, Jordan, this is a product idea for us. We should start out.
Share
Jordan Crook
36:40
Ok, I'm listening.
Share
Darrell Etherington
36:41
Wire cutter for economic impact. I can't figure out the web three part yet. But I also just don't really know what-
Share
Jordan Crook
36:48
We can do something, we can do it. Let's just tokenize something.
Share
Kentaro Kawamori
36:50
Count me in on the token sale. I'm on.
Share
Jordan Crook
36:53
Yeah. I mean, you're an investor, so sure. Okay.
Share
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 going to be like a
WeWork
moment. Are you interested at all in being the propagator of that? Is there a time when Persefoni you go and they have a content arm, and it's like company x, y, z is the worst when it comes to just saying they're ecologically minded, but they're shitty and like here's the whole thing exposing them.Share
37:21
Is that something you would do or is that something you would leave to kind of maybe
TechCrunch
for instance or whoever else?Share
Kentaro Kawamori
37:27
It's a 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 refused to even continue engaging there.
Share
37:50
So yeah, that is for sure going to 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.Share
38:10
Yeah we don't we don't want to go into that space. We want to be the objective, hard playing truth disclosure player out there.
Share
Darrell Etherington
38:17
Yeah that makes a lot of sense.
Share
Jordan Crook
38:18
We should call that wire cutter Holy Smokes, by the way.
Share
Darrell Etherington
38:21
Holy Smokes?
Share
Jordan Crook
38:22
Yeah.
Share
Kentaro Kawamori
38:23
It looks like it has like a vaping component to it.
Share
Jordan Crook
38:26
Yeah, yeah, totally.
Share
Darrell Etherington
38:28
Yeah but I was gonna like... that makes a lot of sense that you wouldn't enter into that, because you can see how... it's kind of like when this is more insidery crap. But like let's say a media outlet starts awarding a bunch of things, sets up a lot of awards that they give away yearly, and you're like, wait what is that?
Share
38:48
Isn't that kind of their suspect about how you grease those wheels are like how some people get chosen for that and what the relationships are, what you're selling against it? I don't want to call it forms directly, but I might as well just call them out now at this point.
Share
Jordan Crook
39:02
We're edgy, Holy Smokes.
Share
Darrell Etherington
39:04
Kentaro is doing it.
Share
Jordan Crook
39:06
Yeah, do it. I'm not gonna do it. You guys do it.
Share
Darrell Etherington
39:11
We still love you. Listen, there are some great people of forms. I'm not painting with a broad brush here, just say the business models, everyone's business model is suspection media because it's not a business that works.
Share
Jordan Crook
39:23
Oh God wow, brought us down quick. Kentadora doesn't even have a joke, he's like yeah, for real.
Share
Darrell Etherington
39:29
It's like I'm not in that business.
Share
Kentaro Kawamori
39:30
I mean, it's better to let the journalists roast the journalists. What else can I think?
Share
Darrell Etherington
39:38
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 with this stuff?
Share
Kentaro Kawamori
39:55
You know, in the short term you're going to see a high emphasis on that disclosure and compliance use case, and I think there's sort of a naïveté 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.
Share
40:14
If you want to jump straight into I'm gonna help you electrify your fleet, I'm gonna help you source renewable energy, I'm gonna 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.
Share
40:31
After that disclosure, use case has been well established and become sort of a muscle in the enterprise and financial institutions, you're gonna see this next great phase of value creation around sustainability. How can I more systematically produced greener products? How can I systematically access
ESG
tagged capital that comes with a lower cost of capital? How can I issue green bonds?Share
40:57
So you're gonna see this hard shift, it's kind of a spectrum, might see that's on the very left side is compliance focused behavior and on the right side is value creation. You're going to 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.
Share
41:16
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 gonna be stuff that people are imagining and cooking up which you're not going to be able to imagine.
Share
41:27
And we've joked about web three on here, but there's actually been some really interesting, you know, distributed teams formed over the last 2 to 3 months alone that are trying to figure out how do we apply, you know, crypto ledgers to create fidelity and trust into offset projects and funnel dollars to those.
Share
41:43
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 certainly inclined to believe him.Share
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.
Share
42:17
If a company is doing a bunch of initiatives that on the surface are contributing to their overall footprints, 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 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.
Share
Kentaro Kawamori
42:38
Exactly. I always liken it to dieting, right? So 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.
Share
42:59
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?
Share
Darrell Etherington
43:11
Yeah, that hydroxycut that brings back memories. Maybe dates me too. But I remember because it was like super popular for a while and then yeah, the ephedrine thinking and it was like, yeah, you know what else is great for losing weight? Speed, but you don't just do speed.
Share
Kentaro Kawamori
43:26
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 storie, is that simple.
Share
Darrell Etherington
43:38
Listen, it was a friend of a friend. Well, thanks very much Kentaro, I mean, amazing. Amazing to chat with you again. Also, amazing that this is our second time and I had just as much fun if not more fun than the first time. So, I appreciate that.
Share
Jordan Crook
43:54
Yeah, good on you.
Share
Kentaro Kawamori
43:56
Yeah, thanks again for having me, let's do it again. I'll invite you guys to my podcast next time. Spoiler: I don't have a podcast, but-
Share
Jordan Crook
44:04
Web three, let's do it on web three.
Share
Kentaro Kawamori
44:08
Yeah I have to go now, I have to build a ledger based podcast platform.
Share
Darrell Etherington
44:13
Yeah, get started on the maths. As far as I understand that there's a lot of math under that.
Share
Jordan Crook
44:17
Hella mathy, yeah. I feel also weird that my compliment was like, I can bear to talk to you twice. So, like, however you want to reframe that.
Share
Kentaro Kawamori
44:27
I love that. One of my co-founders, Kim, would resonate with that highly. She, we've been working together for five years, and she still tells me that four times a week. So that's the highest compliment for me.
Share
Jordan Crook
44:39
Cool. There we go, nailed it.
Share
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 clients. I love you. That's all I have to say.
Share
Jordan Crook
44:53
I think what you do is great.
Share
Darrell Etherington
44:55
That's a great.
Share
45:05
Alright Jordan. So as I mentioned, not in the intro, but shortly into our conversation we did re-record with Kentaro, which meant that we got twice the time with him we usually get with founders. Did that change your kind of opinion of Kentaro? Did you feel closer to him?
Share
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. Because he had the same knife's edge wit and kind of boldness across both tapes, right?
Share
Darrell Etherington
45:39
He was very consistent, which is hard to do if you're doing a put on, that was that's really what we're getting.
Share
Jordan Crook
45:44
Exactly, that's who he is, yeah. Because if he just came for take one and was like had his chest puffed out and was ready to take on, you know, B, C 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 it.
Share
Darrell Etherington
46:03
So I like how he preface is his spicy moments too. So you know they're coming. It gives you a sense.
Share
Jordan Crook
46:08
He's like, get ready, here I come.
Share
Darrell Etherington
46:11
Yeah. What did you think about Persefoni and then like, kind of the overall position of like the climate economy and greenwashing? I know he was talking a lot about-
Share
Jordan Crook
46:23
Pretty big question there, Darrell. Oh I 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, Persefoni is a story of amazing timing right? This could have been built 10 years ago, it could be built-
Share
Darrell Etherington
46:42
I think it was. 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 person around, but I think it wasn't the right time right, to your point, like the data wasn't there?
Share
Jordan Crook
46:54
Yea, and I might eat my words, right? Maybe the version of Persefoni 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.
Share
47:11
And the second piece that I took away from this is the defensibility of the team and how important that is, you know, like. BCs 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?
Share
47:30
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 Persefoni is important and you know, I think that that's an interesting facet to look at when you're trying to understand a startup.
Share
47:46
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 Persefoni really special and promises to be successful. So I thought that piece was really interesting in the way he broke that down.
Share
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?
Share
48:27
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 going to fix it.
Share
48:42
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 going to fix it right? And I think you get a lot more people just immediately being like, wait a minute, what?
Share
Jordan Crook
49:06
Although like now that you say it how loud it sounds much more promising than the government doing it.
Share
Darrell Etherington
49:11
Well, I mean, that's again, the controversy. American perspective is that it is always better for corporates than the government to do right? Whereas other places around the world really-
Share
Jordan Crook
49:22
Not necessarily because it's better, maybe more realistic because we just lost such faith.
Share
Darrell Etherington
49:28
Yes, I think that's the issue, right? Because it's become so rarefied that, 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?
Share
Jordan Crook
49:41
Of course.
Share
Darrell Etherington
49:42
But anyways, in the moment, talking to him, I was like, yeah yeah yeah yeah yeah, that 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 it's like Kentaro is very convincing on this, and I think that really benefits him when he's going to these conversations with investors.
Share
Jordan Crook
50:01
You don't realize until it's too late that you maybe want to argue with.
Share
Darrell Etherington
50:05
Exactly.
Share
Jordan Crook
50:06
You're like, he's already got it.
Share
Darrell Etherington
50:07
Yeah, he's got my money.
Share
50:11
But yeah, he was great and I was glad we got the chance to talk to him again actually, even though, you know, it was not an intentional thing, but it ended up being a great conversation that I think, just kind of built on stuff that we had already raised in the first conversation.
Share
50:28
But I think we got into more depth here and I think honestly, the benefit of a couple of months meant that I had a better understanding of this problem too. So I feel like I was more informed, it was one of those things where it's like, oh, 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 is shut down.
Share
Jordan Crook
50:47
They actually turn it into a quiz that doesn't count towards your grade and then we'll do the test later. Yeah, I mean I've 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 exactly yeah.
Share
Add podcast
🇮🇹 Made with love & passion in Italy. 🌎 Enjoyed everywhere
Build n. 1.38.1
Darrell Etherington
Jordan Crook
Kentaro Kawamori