Critical Tech, Critical Time | The Pair Program Ep74

(upbeat music) - Welcome to the PAIR program from Hatchpad, the podcast that gives you a front row seat to candid conversations with tech leaders from the startup world. I'm your host, Tim Winkler, the creator of Hatchpad, and I'm your other host, Mike Ruin. Join us each episode as we bring together two guests to dissect topics at the intersection of technology, startups, and career growth. (upbeat music) - Welcome back to the PAIR program. I'm your host, Tim Winkler. Join by my co-host, Mike Ruin. Mike, welcome back. It's been a little while. - It has, thanks. Good to be back. - Busy man. - Nice to see you again. - Yeah, we're entering the heart of the summer season here and schools are kind of going on break. Families are traveling and I was listening to a podcast that had a stat on travel, which was that the average American visits, roughly 17 US states in their lifetime. If you had to take a ballpark guess, where are you at on the state count? - I think I'm in the high 20s, low 30s. We did a count not that long ago with the kids. - Nice. - Growing up, I mean, basically on the East Coast, it's pretty easy to cover a ton of states. So I've gone everywhere from Maine to Florida and then further West as well. - You can include layovers, doesn't count. - No, no, no, I'm actual states I've stopped in and been actually on, yeah, yeah. - Nice. Nice, yeah, I think I'm in the low 30s, but we're trying to get my daughter to more spots. So trying to go track down a few extra states along the way. What about you guys? You guys know what your count is top of mind? - I do not, I don't think so. Honestly, I think I travel a bunch with New England area, but I feel like always outside of New England, it's like you go to like New York and Florida and then California, maybe Texas here and there. And then I saw a couple of the middle states. - Nice. - Like just a little bit of stuff, but that's pretty much it. - I grew up in California from San Diego. So, but I had to do a cross-country trip to get to DC. So if I don't know if that counts, we went through a bunch of states. - Yeah, you checked a bunch off on a cross-country trip. - If that counts. - Yeah. - Well, we'll let that fly. That's a lot of travel, a lot of states covered. - Yeah. - Cool. - All right, well, we're gonna give the listeners a quick overview of today's episode. So today's episode is all about critical tech in a critical moment. And we're living through a major shift in how the US thinks about its innovation infrastructure tied to defense supply chains and national security issues at large. Specifically for this episode, we're gonna be dialing into how one startup, Phoenix Tailings is creatively sourcing and refining strategic materials and rare earth metals, which has been a very buzzy topic in the news lately based on these endless vital use cases that rare earth elements kind of play, not only in our everyday lives, but in maintaining superiority in a national security and in defense at large. So to tackle the topic, we've got two really great guests to kind of sit at this intersection of this transformation. So we've got Yan Zhang, chief of staff at Incutail, the strategic investor helping connect the US intelligence community with cutting edge technology. And I'll preface that Incutail is an investor in Phoenix Tailings. And we've got Nicholas Meyers, CEO and co-founder of Phoenix Tailings startup that's turning toxic mining waste into strategic materials vital to our national security, clean energy goals and industrial future. So guys, thanks for joining us on the podcast. - It's an honor. - All right, now before we dive in, we do kick things off with a fun segment called "Pair Me Up". We'll go around the room, rattle off two things that just go good together. Mike, you always kick us off, what do you got? - So for those who have listened in the past, our Father's Day tradition is miniature golf and donuts and ice cream, which I've used as my pairings in the past. This weekend we did miniature golf and it was drizzly and overcast and we had the best time. It was probably one of the best mini golf outings between the wet greens, kind of slowing things down a little bit and just not the just humidity and heat that normally accompanies that tradition. So we had a blast. So I would say mini golf and overcast like drizzly day, it was just a lot of fun. So. - You gotta give a little closer to than usual. (laughing) You gotta give the plug, where'd you go? I love it. - Rocky Gorge, it's in Laurel, just over in Howard County. - Oh, nice. Yeah, I need to check that out. I'm usually always just going to something like that was like at the beach. You know, I was thinking of beach trips and mini golf, but good stuff, man. Well, happy Father's Day too. - Oh, thank you, thank you. - Well, I'm going to keep it on theme with the Father's Day. I'm going to go with Father's Day and coffee mugs. I just, again, celebrating this past weekend with the family. My wife and daughter presented me with a bluey coffee mug and for those listeners that don't know, the parents that don't know bluey is an amazing kids cartoon show. But it's not popular, not only with kids, it actually resonates with adults as well. But I just feel like there's something about getting a mug as a Father's Day gift. It's simple, it's practical, and I just feel like it's a pairing that'll never really go out of style. So I'm going with a Father's Day and a coffee mug. - Nice, happy Father's Day. - Yeah, thanks, bud. Let's pass it over to the guest, Nick, quick intro and your pairing. - Yeah, absolutely, Nick Myers, co-founder and CEO of Phoenix. I born and raised Connecticut, but I would say, actually, maybe a little bit biased here, because I do have my own taco blog. Tacos by Gringo, you can follow me on Instagram. But all 157 followers are very impressed. All right, I'd say a good chorizo, Papa's Con Chorigos taco and a Corona. Absolutely the best thing in the world. Doesn't matter if it's dreary day, sunny day, whatever. You have a good Papa's Con Chorizos taco. A good homemade taco, like a homemade tortilla. It's so good. And then pair that with a nice Corona would lime. Oh, unbelievable. Make sure you did a thousand times better, a hundred percent. - Oh my God. - That sounds fantastic. I do need to validate the, and give you a follow. It said Tacos by Gringos. - Tacos by a Gringo. - By a Gringo, okay. - I'm the Gringo in this specific case. - If it's not obvious. - I dig it, man. I'm a big Corona fan and pairing it with a taco just sounds like a perfect mashup. So, well, again, thanks for joining us and Yan, quick intro and your pairing. - All right, thanks for having me. Yeah, Yan Zheng, Chief of Staff at Incotel. You guys set me up good. I'm also a father. So I had Father's Day as well and California. So Tacos and Coronas are what I grew up eating as well. So, you know, but I Smith Father's Day. Mike sounds like you would probably went golfing on Sunday 'cause I went, I did gardening on Saturday. It was actually quite hot. My pairing would have been gardening and sunscreen, which I did not do. It was good. It reminded me of my physical body. And, you know, when you're pushing paper, making calls all day, I think it's good to just do something with your hands very apropos with today's conversation, right? The world, we live in a physical world. And just to be able to remind yourself that like you can do something. There's dirt. There's, you know, a wetness and just yucky stuff. But it's, you know, it's nature. It's, it was a great day. So I love it. And then the lack of sunscreen helps you remember. (all laughing) I'm not invincible, so. It's a memorable pairing. I think a lot of people can relate to that. It's not just gardening, like doing yard work in general. It's just get fried. Well, also, well, again, thanks guys for joining us. And yeah, let's go ahead and transition to the main discussion here. So, yeah, and I do want to kind of like just start with you and maybe begin a little bit more broad here regarding, you know, the urgency of critical tech at large. You've been deep in this space, you know, supporting DARPA, Booz Allen, now Chief of Staff at Incutel. You know, why is the urgency around, you know, critical technologies like, you know, semiconductors and rare earth materials spiking right now? Like why is this such a high stakes issue in this moment right now? Yeah, it's a great question. You know, I think it's, we're getting back to this, to this idea that we actually need to start making things, right, and manufacturing and producing these things. And they're not easy to do. These are not things you could just flip on a switch, right? And, you know, and turn it on. And we have to be cognizant of history, right? There are reasons why at the time we felt it was, you know, economically advantageous or, you know, it made sense to just move things to a broad weather because we just didn't know how to take care of the, you know, the chemicals or the ability to actually do this at a low cost, you know, way. I think those are all things we still need to grapple with, right? You know, how do we make sure we have the advanced labor to be able to do many of these things? How do we make sure that we don't, we have solved some of the environmental like degradation challenges from doing, you know, advanced semiconductor manufacturing, doing refining of critical minerals, right? Those are all things I still needed to grapple with, which is why we, you know, love what Nick is doing. And I think that the cool thing is it's a realization, I think, from the country that like, that this is important, right? Like whether or not we, you know, we are in software, right? We're in other spaces. I think it comes back down to the physical world. Like, you know, kind of like what we started out with the physical world, right? Like, everyone's talking about, well, we were talking about AI and stuff, but if you just talk to anyone about AI long enough, you will end up being in the data center. We'll be talking about how much energy it takes, right? And so it's, and then you start talking about, you know, all the ways of getting new energy. If you talk about crypto, you're going to be talking about how much energy it takes, right? And so I feel like, you know, we are starting to realize that many things we depend on ends up coming down to how we make it, how much energy is it going to use? Where are these chips made? We are like, where are these, like these magnets and, you know, the things like we do. So it, that's, I think, in a way, why we're in this situation we're in. And I think broadly, we don't need to, we could talk about this a little bit later. I don't want to take up all the time. I think there is a discussion we need to have about what is our, like, national idea for a scientific ecosystem. I think we're in a really interesting time right now to rethink the ecosystem. I think we're in an inflection point. And, you know, we have thoughts on, like, what that new wave looks like, but it's not what we were doing yesterday. - Yeah, I think that's spot on. And I, you know, try to bring it back into the, the rare earth metals conversation. You know, I don't think folks maybe are privy to the use, some of these use cases are countless use cases that apply here. Nick, I think it's a good point for you to kind of touch in on and, you know, what are all of these, you know, kind of circumstances where rare earth metals kind of touch our daily lives? Like if you can break it down for us, you know, what they're, what they're used for. - Yeah, absolutely. You know, I get this question all the time because rare earths are a confusing topic, right? You hear the term rare earths, you hear the term critical minerals, essential materials, and it's just all sorts of confusing. The key thing to remember is they're rare earths are a group of 17 different elements, all with nearly impronounceable names. Things like neodymium, dysprosium, terbium, blah, blah, right? They're used in virtually every form of modern day technology. And people forget that how important they really are. And the thing about them and what makes them so essential to our everyday lives is there's not a lot of them used in our everyday technology, but where they're used is so absolutely critical that without them you can't function. So the microphone that I'm using right now, that is reliant on specifically rare earth metals, some of which actually just got banned from China and have a huge challenge with accessing them. So we would not be having this podcast without rare earth metal. Your computer screen that you're looking at right now, your all speakers are used with rare earth metals. And specifically speakers are actually a very, very high performance magnet application. So the speakers have some of the highest strictest requirements around the rare earth metals that are being used in them because it directly translates the high quality audio performance. But even more relevant things to a lot of folks is like electric vehicles, but also internal combustion motors. The glass that a car has is coated with rare earth elements in various different forms in small different ways. And other things like the F-35, as it goes to national security, uses rare earth metals as part of its landing gear and propulsion systems, as well as missile guidance systems. Without these key essential materials, right? We're not only can we not have a podcast, but we're also subject to foreign threats, foreign invasions, simply because we won't be able to defend ourselves without access to those raw materials. The only other product in the world that I think permeates this level of reliance on our everyday lives, and arguably, I think rare earths are further. But the only other product that's relevant is gasoline or oil. And oil is turned into plastic and is used in virtually everything, but rare earths are just the same. And it's the new oil of this generation relying on every different thing that we need. - And it's, you know, the risk lies in not, you know, domesticizing these supply chains or making these supply chains domestic. - Precisely. I would say that the risk relies in the fact that there are so many different pieces of the supply chain. And if you don't have all of them working together cohesively, if one piece falls, the whole thing falls down. And if you don't have the whole thing relying in domestic or allied countries, simply put, if you get into a war with another country that has access to this and does control one part of it, then not only will you not have your weapons and the ability to defend yourself, but you won't have the basic necessities that we all rely on like a cell phone. And it'll cripple your economy so much so that you'll surrender as an entity before you get to a kinetic warfare issue. - So this is a good jump off to dive deep into, you know, Phoenix tailings is in what you all are doing. So I was, yeah, I was doing some research and reading an excellent article out of MIT on the startup story. It was fascinating. So talk to us a little bit about that startup journey and then, you know, how you kind of went from, you know, MIT thermodynamics to building a rare earth refinery and speak to a little bit about, you know, how you're solving these problems. - Yeah, of course, no problem. So I met Dr. Tomas, our CTO and co-founder at a Bible study of all things about eight years ago, right? A very odd topic to have at a Bible study in general is about earth metals, but hey, we're not the most normal people I would say in general. But immediately when I saw Tomas, he was like the smartest person you ever meet, right? PhD from BU, undergrad at MIT, literally one of the top scientists in the world on the specific type of metal production. And we talked about exactly this problem of how reliant we are on rare earths and other critical metals. And the fact is that we're looking and we're like, no one really produces these things. And the question was, why not? Do they need just a massive amount of cash to build out these mining operations to get it? We looked deeper and said, no, it's not really it. It's not the cash. It's this huge technical mode of actually how you process rare earths. So if you're not familiar, rare earths have a few different stages of the processing. Traditional metals like iron, you dig a hole in the ground and you find a nugget of that metal. That metal's then turned to the steel that's put into your car or spaceship or whatever it is, right? Now, critical knows why it's so confusing and why we got into this problem where 97% of the world's supply chain is run through China today, is rare earth metals, you dig a hole in the ground and you find dirt. Now, last I checked, dirt is not what an F-35 is made of, right? So you have to do a lot of chemical processing to get to that final stage. So the first stage is that chemical processing to separate out the individual group metals from-- or those individual oxides from the mixture of rare earths. Then you have those and you turn that to the metal and metal alloy. So we looked at that and we looked at the whole gap in that supply chain. It was really that we're finding, that taking that dirt out of the ground and chemically processing it to the final metal that was needed to make a magnet or the final component. The way that works today is extremely toxic. There's 2,000 tons of waste for every ton of metal produced, which is horrific, which causes many different types of environmental concerns. But the primary one that comes up is the worker safety issues. In the US and other Western world countries, we're just not OK with putting our everyday worker, the everyday American, at harm's way to get to access the metal. That is not the same way in many other countries. And so in order to make a domestic solution for rare earths, that was the first thing we had to solve. We understand, hey, how do we do this? And so that really goes down to a very technical question about how do chemicals operate into the system. So quite literally, we saw an opportunity and said, look, we're going to find a way to solve this. And we put $7,000 down, which was our entire life savings at the time. Yes, we can all ask. We have more now overall. [LAUGHTER] But the-- It's a lot of tacos. I've sacrificed so many tacos. Maybe it's where my love for tacos came about, because they were pretty cheap tacos. Well, actually, the interesting, fun story aside, sorry, Tomas is a Mexican-American. So he actually would make tacos in the backyard as we did our prototype testing, which is always a good time. So it's a future venture in the works. Mm-hmm. It's a taco business. So we did the processing in the backyard, just trying out new technologies until we found some chemicals that actually worked and did not have the emissions, did not have that waste. It wasn't the first try. I don't think it was the 100th, but we tried for almost a year every night, looking up at the sky to see if it would rain so we could run our tests. And then we got it working. We raised a bit of money from Techstars, which was our one of our first investors to really scale up out of the backyard, brought in a world-class team. We actually brought in a bunch of technology from a company called Infinium that was going under in 2020 because no one was focusing on rare earth metals at the time. And we saw the opportunity, brought in the top engineer from the team. We brought a bunch of the equipment and actually started building out. So we just closed $76 million Series B financing round. Incutel was absolutely essential to galvanize and was a key investor in the round itself. And we are building out our large-scale facility of producing rare earth metals to fuel-- well, this first phase of it will fuel half the US defense needs by the end of August this year for rare earth metals. We already produced and shipped at the commercially metric toned scales, much larger than the backyard. So we skipped a few pieces of the story, but we filled up for a bit. We commercially shipped out on the tonnage scale into primarily the automotive industry for the new models of vehicles there. But we're moving and scaling up further to be able to sell injured defense and solve this problem for the US and her allies. Wow, that's such a cool story. And I want to dig deeper into the partnership between Incutel and Phoenix. But, yeah, I wanted to just kind of ask you-- you've been dialed into a lot of these critical infrastructure problems for years. Why do you think solutions like this haven't scaled sooner? Yeah, these are-- as Nick said, it's not necessary access to capital, right? Some of these really innovative solutions is it's a tech and a willingness to actually explore that, which is what we do here. We invest in these really interesting technologies that have a bent in national security. Our bread and butter is finding a really interesting company that has a commercial product. And then pairing that, like you guys do, with a government end user, with folks to be like, hey, you need a new microphone that works better than anything else. This company is building the next great thing. I'm sure we could use that for many purposes. And most of the time, the companies are happy that we've brought in a government end user. This is, hey, that's great. But can you make it this much better? Can you add just this much more? And most of the time, a lot of these companies are really happy they have someone to speak their language. We're like, yeah, actually, that's a great requirement. I was thinking about that. That was lower in my totem pole. But if you're going to come in and help us find the right-- that person that we could actually engage with and put some money down to actually help us get there, we'll put that into number one priority. And that's what we've been doing for 20 plus years, where we know what the government needs. We go find these innovative companies, and we make that pairing. And most of the time, actually, the majority of our investments involve not just one government agency. It involves more. Breaking down the silos, and people in one agency would be like, oh, Joe, I didn't know you were-- you guys are working on this, too. And you help create some more government efficiency going on here, where people realize that it's not just my organization that's curious about metals, or microphones, or motors, or whatever. And it would kind of help with that. And so I think part of this challenge when it comes to these larger efforts is then you're getting away from just one end user. It's not just as there is end users that are like, hey, I need a microphone. It's more like, well, what do we do about 5G so we don't get Huawei all up in this for 6G? What do we do about mineral so that we're not reliant on China? Those are a lot bigger and headier problems. And something that we've been working with as part of a new line of investing called Compass happens investing, where it is about looking at these bigger national security, national priority challenges, and bringing all the folks together and saying, look, this is not just the access to capital problem, but we're going to help you find the right-- and syndicate the right rounds to get these national security and financially mined folks together to look at some interest problems that hopefully we shine a spotlight on. About a third of our companies that we invested in, they don't involve what anyone listening to this might call the top tier VCs. Most people would think, oh, the top tier VCs, we'll cover it. There is a bunch of money floating around billions of dollars in there. They'll handle this. But when we look at our data after 25 years plus of doing this, over a third of our companies came from investors are more niche, that they're not the really top investors, which to me means that there are certain topics that if you're just a purely financially driven VC, you're not going to look at certain areas. So we have to have a new model. This goes back to what I was saying about the science of the ecosystem, a new model of thinking of how do we align public interest, national security, and the private sector so that we're all kind of rowing the boat in the same direction? And Nick's company is a great example of that, where we say, look, there's absolutely a national imperative to do this. And there are ways that we can help shape the problem and get the right folks to look at it so that we all kind of be like, hey, that is something we should all spend our money and our time looking at. And we're doing that on a scale of not just one company, but hopefully dozens. Yeah, it's fascinating. I wanted to quickly ask Nick about what would you say are some of the biggest, I guess, scientific or engineering challenges that you're facing when you're trying to overcome, I guess, hitting a purity that's needed for these defense or EV applications? What is your all-as-biggest, what keeps you up at night challenge engineering-wise? It's a great question. So we've tackled the majority of the technical or true scientific issues already. This is the third generation of the unit. We do operate it pretty solidly. But what we tackle right now is really focusing on the automation. So how do we deploy rapidly is the question. We will be successful. We will deploy. But will it be in 18 months or six is a question. And so how do we go faster, faster, faster? Which is actually one of the ways Ecotel's been incredibly helpful. John Chee, one of our key partners over at Ecotel, has really helped connect us with the local ecosystem in robotics. Being in Boston is extremely powerful because you have those connections into robotics that is the absolute cutting edge. I mean, MIT is one of the top universities in the world on automation. And you have just an ecosystem around you with mass robotics and a few others that just know how to process and do things like that. And be able to leverage that as along with big data and AI into the systems to be able to automate and improve things to get the better yields, get the better efficiencies, and lower your costs through production and scale up. Really, that's the big things we're focused on right now. As well as designing, how do you actually run a process like this? Bear in mind, no one's really operated large scale rare earth metal processing in the US ever. So we really have to recreate, from an operational perspective, how do you build this? How do you run it? Where do you move rock and where do you pull out metal? And rare earths are something called reactive. Meaning, they don't sit well in the air. They dissolve. They degrade. So how do you store it and how do you ship it out? Those are the key things we've been tackling lately, which has been really a key focus. And I think it has been quite helpful, I have to be honest with you. Yeah, that was actually-- you teed me up for my next question. This is what we love about the Pair Program, is bringing two parties together that are adding value for one another and highlighting how that value is being added. You kind of touched on it briefly with connecting you all with the local ecosystem within robotics. I think that's really neat. What other areas-- we always ask like beyond the check, right? Have you seen this value from the partnership with Incutail? Oh, absolutely. So the first is always, I say, local connections to partnerships, right? So whether it's automation, or a lot of times we have supply chain discussions or commercial discussions. Incutail has admitted several different customer connections to us to be able to sell into the supply chain, simply because Incutail is one of the top investors in hard technologies, right? So folks making drones, for example. Drones all rely on rare earth magnets and rare earth metals. So it's very important for them to have that supply chain. Incutail has been very critical in helping connect us to that. The second is not their own capital, but bringing in other key investors. One thing the private sector is looking for specifically in critical metals and rare earths, because it's such a new field in an area that most private venture capitalists are not familiar with, is someone to validate and understand from a business standpoint, is this the type of thing that makes sense from a national security perspective, makes sense from a hard industrial technology perspective, and will it scale? Incutail has got to blend the very solid success factors in these more nuanced and tougher sectors that are not just true blue software. So Incutail's validation on that was very critical. To be honest with you, Incutail was one of the first people to say, or first groups to say, we want in on the series B financing around for Phoenix. I will directly say it very publicly, we would not have raised our $76 million series B anywhere near the same terms or value or et cetera, or as easy as that we did without Incutail. I think there's an argument we wouldn't have raised it at all without Incutail. So we're very appreciative of it. And it was very key to our whole success there. And then the third part is very relevant to, especially these days right now, there's a huge issue with China on trade wars. Incutail, the team there has been very helpful on navigating and saying, hey, what should you be thinking about? As a business, how should you be thinking about it? I have a lobbying perspective. We have lobbying teams and et cetera in DC that we work with. But how do you think about it authentically as a startup company looking to bridge into this public sector of national security and very, very helpful in all three of those fronts? Yeah, I'll flip it over to you, Yan, and get your perspective on what makes working with the founder like Nick so effective in this partnership. Yeah, no, that's great. And thank you so much, Nick, for all your partnership. This is great. And we're looking for thousands of more folks like Nick and smart and doing these innovation things. And so we have a very broad scope of work they're interested in. So about half of our investments are software, other half are hardware. So we do it all. And besides critical minerals and energy generation, we're doing investments in microchronics and semiconductors, the tools that you need to make sure that you could make some of the investors in the United States. I help co-lead that team before jumping this roll. Quantum is another thing. That's another team I led. And so we work very closely in some of those areas with the CHIPS Act, folks that are like the government. This idea of how do we align the capital stack? There's a public stack of capital that's going to certain things. There's a public stack of capital going to certain things. And oftentimes, they're not maybe going in the same direction because they don't know about it by what each other is doing. So our goal is really looking at each individual ecosystem because they're a little bit different and trying to figure out, hey, what can we do in different stages of development, like quantum is a lot earlier stage than where Nick is at, where they're actually being able to get into a mine. But we're helping them try to figure out things. How do you actually build the workforce? How do we make sure that we have folks making the supply chain of refrigerators, the pollution refrigerators, in the United States? We made an investment, for instance, in Maybell as a US investor. Start coming doing that in this space. And they're doing a lot of things in the regional parts of Colorado, Wyoming, and as part of the EDA tech hubs concept. So we try to just connect folks and convene folks in these different areas when it makes sense. And we're really big in bio as well. It's another one of the other areas that we're operating in. And things in areas like that also, we try to help inform our government stakeholders. Like a lot of folks, they're just trying to figure out, what is the future of bio? What is what's going on? And we help be able to bring those folks to Capitol Hill, to the executive branch, and folks that are actually the stakeholders and policymakers that are making those decisions to be better understand the hype from what actually was happening from folks. And sharing it from folks like Nick and others who are actually in it, and actually know what they're talking about, is just some of such a better way of expressing to an audience like, where we think the technology is heading? So we hope to be able to do that. Because our checks are small, right? Like, we're not a private equity. We're not like a large company that will basically give you all the capital. We don't think it's necessarily the capital in itself. He mentioned John Ching, who's the board observer on this deal. Every message that we make, we have a board observer. And from our team, that is able to be there to help guide the company on questions they have with working with the government or where things are headed to export. And I think those conversations that access, the ability to have that conversation is super important. Because it's all about relationships. And in any given year, we're in over 100 plus boards. That gives us a lot of access and a lot of the leading minds in the field. And to us, that is a way to help guide the United States innovation ecosystem and our government into like, hey, here are the things that are going on that we really need to focus on. Here are the market trends that are affecting directly our CEOs and what they're worried about. Gosh, what can we be doing about that? And so I think this is intangible in kindness that things that we offer, that's not just capital based. It has a lot to do with our staff. It has a lot to do with just our model of actually being a partner with our companies and not just a check. Yeah, yeah, no. I was just thinking, yeah, and you touched on all the shift in model. You think back to the 1950s, how would we have solved this? We'd probably have something at a DARPA or whatever, just to like, how are we going to-- as a government program. And you touched on, I don't know, a dozen things about why this model is a better model. I'm curious if what your thoughts are if you could maybe enumerate some of the reasons why that model isn't quite as good in the modern world as this one. Oh, yeah. You-- yeah, be ready, because this is-- I'm a huge science history nerd, and this is an area-- I spent a little bit on Capitol Hill doing innovation policy. And this is something we explored for many years. I think we're in a new inflection point. If you think about the big projects that we've done and where we've been going in the early 19th, like 20th century, after the Industrial Revolution, majority of R&D was done by private companies. Like, this is-- you think it's like the big corporate railroads and things like that. They had a purpose. I need to make a better railroad. I need to make safe money. That's the purpose of R&D. And you get to World War II, and then you have the Vannevar Bush, who is the forefather of NSF, and the current way of thinking, brought in universities, and said, no, no, no. There's a way of actually bringing public universities into this game. And they could be developing not only new ideas, but also the workforce of tomorrow. And the ability for us to really build that ecosystem has been hugely critical from us winning the war to post Cold War and be able to keep up and create new innovations. But I think we're in a point that we haven't really figured out what this new model is yet. And I say that because by the 1980s, the rate of public spending in R&D really has been dropping precipitously since then. And the private sector now outspends the public sector in R&D. And so now it's roughly like 75% of all R&D per GDP in the United States is done by a private sector, not the public sector. And so we have things that some folks in the audience might have heard of, like SBIRs and craters. And different contracting mechanisms developed at a time when they were meant to be working with a lab, maybe a Bell Labs, a corporate lab, a large entity, like a Raytheon. Those are tools created to work with those folks. And at that time, the concept of what we know today as venture capital and what we know today as startups did not exist. And so we're at a time right now where we're talking about we need to move faster. We need to work with these innovative startups. And the constantly you hear this thing is like, ugh, we need new authorities. We need a new ways to work with folks. And I think that's just a reflection of the fact that we have not updated our model of working with this new group of folks that just did not exist when we developed the old model. And I think right now, hopefully, I feel like Incutel has been early in the game. We found in 1999 on that same premise. How do we engage with the private sector, especially startups and VCs, to keep the government ahead of where things are headed? And we have to be able to engage with them in new ways to engage with folks. I'm glad folks right now are thinking about OTEs and other ways of looking at things. And I think that's going to be important. But I think there's models like us, like this nonprofit model that really provide a new way of looking at how to actually engage with the private sector with a public interest. I'm a really big fan of Foundation for NIH. When I was in Senator Kuhn's office, I helped stand up, write legislation that stood up the Foundation for Energy, Security, and Innovation, which got stood up with the Ships and Science Act. So now the Department of Energy has a foundation. And part of that idea was tailored to look at Incutel of like, hey, we just need a nonprofit model that's not government, but has a government mission, a public mission, to look at national security, energy, and those areas, those things that are the cross-cut a public mission. But is able to more easily leverage the tools, the financial tools, or contractual tools, or whatever we need, really, to meet the demands of the time. Yeah, I think this is exactly what we talk about on this podcast. And I think part of it for us is solving the problem of awareness of what some of those problems are. And I think when you're in industry or commercial startup, it can be extremely daunting to think that you can tackle some of the world's biggest challenges that are tied to national security and defense if you don't have a navigational guide, somebody to walk you through what it takes to get connected to the right people and to solve those problems. I think we're seeing a lot more of communities popping up here, actually, little micro networking communities. One of the plug is Station DC, where they're truly just trying to bring policymakers, investors, and startup founders into one room and have them meet, greet, talk about what problems they need solved, how that solution is working for this different vertical. And making those connections, I think that's so valuable. And that's what we try to do with these conversations and bringing folks in. And those are the things that kind of give us a lot of hope, because I think it was very siloed of like, I don't think I could ever really do business with the government. Trying to break down that barrier is one small contribution we can make. But I love the mission behind Incutel and having those relationships and making that a part of the value out is incredibly valuable. Yeah, Nick, on that note, too, it's something that we talk about with startup founders that are scaling dual use companies, right? How does the almost like roadmap deviate when you're thinking about how your solution will be solved and maybe one certain commercial solution versus a defense setting? Do you build out teams that are dialed into one area or the other? I know, obviously, on the sales side, that makes sense. But with what you all do, how does that impact your growth plan and your roadmap? Yeah, absolutely. This is actually one of the biggest areas I see a lot of founders making mistakes in. And they look at SBARs. They look at new opportunities on the military front or other different government opportunities. And they build out basically an entire business within the business focused on that. So this is something Infinium did prior to their bankruptcy is they started becoming basically an SBIR mill focusing on new innovations, scaling up a new thing. The one grant would finalize and finish. Then they go after a new one that was completely unrelated. So for us, that was one of the first learnings that we actually made is that every grant we go for, every single push we go for, is all in line with our same commercial vision. And the government is a part of it because there's a great opportunity. We want to serve our country. We're all very key on that. And I think it's a huge opportunity to enter into the sector. But it has to be in support of the broader commercial vision. And everything has to be in that vein. So for example, a lot of times we choose not to do certain projects. There would be recycling some crazy new material out of this different ash products or something like this that wouldn't be relevant to us. Or some new iron thing or different like that. We focus on making sure it's all built out the same. So virtually all of our teams are the exact same teams. We just build it in line with that the same roadmap. And we leverage the government endeavors that we have. And the military side, whether it's aerospace or areas of other sides, just to accelerate the vision and make sure we're hitting those key national targets and to do the things that we wouldn't necessarily do on its own in its own pure commercial right. But we leverage this opportunity to really work together. With sales side, you do see a little bit of a shift. But generally, pretty much, our sales team covers kind of everything. It's still a startup in that capacity. We do fairly large contracts. We just signed a $200 million sales contract into the auto industry. But that same team is selling into defense and a few different other sectors as well. So including medical devices, which feels unrelated. But it is really the same type of thing. Wow. Yeah, that's super helpful insight. I think that's something that could turn into a quick masterclass for a lot of founders. Because they get lost in it. They get lost chasing a number of-- yeah, non-dilutive funding is a beautiful thing. But if it's going to derail your product roadmap and you don't have access to capital to sustain that long period, you're kind of toast. So it's a challenge that we talk about. We bring it up pretty regularly whenever we're talking with folks. Because it's often debated. But everybody's got an opinion on it. And it's always interesting to see every founder's different approach to it. So I appreciate that feedback. Maybe just kind of in closing, what can listeners be excited about with the future of Phoenix Tailings? What's on the horizon over the next one, three, five years? Absolutely. So we're building up our commercial operation in Exeter, New Hampshire. That'll be up and running producing metals at the 200 metric ton per year scale this summer. So it's not in four years, not in five years, not 15 years, like most mining operations. We're getting this thing up and running in six months from the initial closing. So we'll be-- we're well on track. I think it's going very, very well. Pushing forward to do that. And we'll be shipping out about half the US defense needs of rare earth metals from that operation. We're working with the government hopefully to be able to expand beyond that, too, and several other parties and commercial entities as well to be able to increase that size of that facility. But in the next-- in 2026 and early 2027, we'll be building out our much larger facility to do about 30% of all commercial demand in the United States, about 4,000 metric tons of metal output tonic met up. And we're starting already progress to be able to build that out, all producing it with zero way, zero emissions at a fraction of the cost structure of the Chinese operations right here in the United States. Nice. That's exciting. And then, yeah, last note, Jan, what can folks be excited about for some of the future investments that are going to be coming out of the Incutela umbrella? Yeah, we are going to expect over 70 investments this year. We did that last year and the year before. So it's a lot. We're looking at some really interesting ones in biotechnology and bioengineering and how that might affect how we keep ourselves safe and new advances. And actually, we think of-- people think of medical always when you think of biotechnologies. But we're looking at things of like-- they're actually-- these things are actually used to make farms-- not just medicine, but lubricants, cosmetics. And those are actually the industries that are keeping that alive. It's really interesting to see folks using AI now to figure out what are the right combinations of molecules and chemicals put together to actually make this new biological component. We're looking at things in semiconductors. We actually made some investments in the new tools that actually take away any dependence we have from ASML and others in the future to actually create the cutting edge, like the smallest feature semiconductor components. So we're really excited and those are going to be giant projects that are going to be in the United States to actually build here. And then things in AI and drones, I think one of the cool things that I really like about AI is we're getting into-- everything has to have AI in it. But it's not just like, hey, we're getting away from just the LLM. That is table sticks. Now that we're seeing it. Everyone has a table-- everyone has an LLM. And I think what DeepSeq has shown us is that they could get very close. You don't have to spend all that money. You get really close to a model that operates close to par with what the industry is doing. What we need to be pushing our industry in the US context is, how do we add on top of that? And what are the things that's going to make your product that much better and more tailored to the specific mission? And it's about usability, use cases, and kind of just make that faster and so that we could do more with fewer people. So looking at that being perflated through physical AI, from robotics down to cybersecurity and cyber tools and so on. So lots of stuff. We're just constantly inundated with new and exciting deals. So it's an exciting position to me. And I am really thankful to be able to see all these new companies coming through across my table almost every day. That's awesome. We're excited to track it. And we'll be pinging you regularly for future podcast guests, maybe like a semiconductor, a quantum future guest. I'm sure you've got a large roll of decks of contacts to speak on those topics. So well, again, thank you guys for contributing on this topic. We're going to wrap with our final segment, which is the five-second scramble, which is just quick answers. I try to keep them within five seconds. Some business, some personal. Mike, why don't you kind of lead us with Yan? And then I'll close with Nick. Sounds good. All right, here we go. What makes Incutel unique? Oh, the people. Sure. It's all about the people. What stage company is your favorite to work with? Early seed stage. Which emerging market or sector do you think is underrated? Quantum. Quantum. That's a good answer. If you could have dinner with any tech leader dead or alive, who would it be? Oh, I saw Dean Kamen recently, and I never really got a chance to really sit down and then talk to him. But you know, Segway and all the other stuff is a great engineer. Love to have a deeper chat with him. What did you want to be when you grew up? A brain surgeon. Whoa, that's the first. The first. Is there a charity or cause that's near and dear to you? Yes, supporting kids in inner city kids, especially like AAPI communities that are just unknown. So the folks like them on community and others in these communities, that's the thing that we like to support. If you could live in any fictional universe from a book or movie, which would you choose? I think any of the Marvel ones would be nice. It seems like there's so many superheroes. I could just wake up and have a superpower. I don't think you want to be a citizen in a Marvel universe. I think you need to be a superhero in a Marvel universe. I'll keep trying. And what's the surprising hobby of yours? I do woodworking. So I'm on my journey to remake every single furniture in my house, starting with the small things. And the table will be hard. That's a big one. All right. Nice. Well done. Very cool. All right, Nick, you ready? That's right. All right. If Phoenix tailings were an animal, what animal would it be? Wolf. Nice. How would you describe the culture at Phoenix tailings? Wolf-like. That's perfect. What kind of open roles are you all hiring for over the next six months? We're building virtually the entire finance team, CFO, and controller, bringing on government affairs specifically. So, Ian, if you know anyone, let me know. And sales folks as well. Nice. What is the weirdest thing that you've ever pulled from Red Mud? Oh. We pulled gold from one site, which I don't know if that's weird, but I was excited. That was pretty cool. Gold's a hot commodity, so I'd be excited too. What's a trait that you find most essential in a co-founder? I think the ability to empathize with the other person-- did you go through some stuff as a co-founder? So having the ability to empathize and understand your partner is extremely critical. Nice. What's a chair to your corporate philanthropy that's near and dear to you? I would say-- so I donate a fair bit to the Reorthodox Church. I think they do a lot of really good stuff and support really positive missions all around the world. Nice. Favorite class from your education, from your schooling that you find most useful today? I would say, actually, financial strategies. I took that at Northeast University, where we studied corporate strategy. I thought it was going to be totally useless, because everyone told me it's not relevant for any job that you get out of school. But honestly, I think I use it more than anything else. Just different business school frameworks, it's so helpful to have on a regular basis. And you'd be surprised how many people just don't have it. Yeah, I'd like to know that my CEO's favorite class is a financial strategies class. That's great. What's the first car that you ever owned? Chevrolet Camaro, 2011 SS. That's beautiful. American Muscle Baby. And last question, what's a hobby or activity that you enjoy doing, but you're just not good at it? Aside from golf. Oh, yeah, terrible golf. I love surfing. I actually went for a whole surf weekend the other day, like a surf camp out in Portugal. I still suck, but it's great. It's great. That's amazing. All right, that's a wrap. Yeah, Nick, thank you both for joining us again. This is a conversation that's exactly what we look for on the Pair Program, connecting those people that are building critical technologies with those that are helping bringing it to market. So thank you guys for what you're doing, and thanks for spending time with us on the podcast. So let's make it-- It's an honor to be here. (upbeat music)