Serial Founder + Former SpaceX Team to Revolutionize Engineered Wood — Josh Dorfman, CEO of Plantd
Led by Josh Dorfman, Plantd turns atmospheric carbon into low-prices, high-performance building materials using industrial hemp, an ultra-strong, fast-growing plant that captures over 3x more carbon than trees.
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So, what is Plantd?
Plantd is a new company that’s going to disrupt the construction materials industry. We are focused on how to move away from concrete, steel, and wood and toward biomass that is faster growing, lighter, stronger, and can capture more carbon. We’re looking at how to do that in a way that is easy for everyone to adopt.
Can you briefly tell the backstory of why “easy” or “lazy” is so important to mainstream climate solutions?
At my first sustainable furniture company, one of my employees called me out for being a bad environmentalist. I realized I’m probably not going to change my behavior as much as I know I could, and that’s a little problematic. I'm not proud of that, but there's a reality to it. That notion, which I coined as the “Lazy Environmentalist,” eventually became a reality TV show on Sundance TV that I hosted and a daily radio show on Sirius XM.
That translates into how we think about Plantd. If you're trying to enable change in the real world, the most effective way I found to do that is to remove the friction from that process. At Plantd, the first biomass we're looking at is hemp. We like hemp because of how fast it grows, its carbon capture potential, and because the economics are understandable to farmers. The inputs are clear, and hemp can be farmed with standard mechanized farming equipment, so it doesn't require farmers to do things much differently.
On the builder side, our starting point is structural wood sheathing for homes. Most builders are using a product called oriented strand board (OSB). We decided to build that, too, but to make it out of hemp. We think there are opportunities to make a better product, but it still looks and performs like the OSB builders use today. We're not going to ask builders to adopt an alternative building technique. We just want to slide into construction as it works today and to make it easy for people.
Can you comment on the economics of your products? What kind of inputs would be needed, or not needed, for farmers who switched to hemp from more conventional crops?
The farm bill that passed at the end of 2018 legalized hemp across the US at the federal level, so there have been three growing seasons to understand how to grow on the industrial side. But there's still a fair amount to work out. We're doing quite a bit of R&D with our farmers just to understand the right seeds to plant, when to plant them, and how far to space them apart.
The cost for a farmer to plant roughly an acre of industrial hemp is about $150 per acre. If a farmer is getting $650-700 per acre for corn or soy, we know that in order to scale we need to be at least at $900 per acre for that farmer to switch to hemp. If the yields on hemp can get to 10 tons per acre, the upside for farmers and everyone would be significant.
Where are good places to grow hemp?
Hemp grows in many different places around the United States. As we look at residential construction as a starting point, hemp grows in many of the biggest housing markets. That includes here in North Carolina, which is the largest housing market in the United States outside of Texas. It also grows in Texas and in Florida near Tampa, Orlando, and Jacksonville where the housing market is booming. We want to put factories where the biomass is, and since hemp grows all over the country, we can design a distributed manufacturing model to put factories where farmers are. We can then sell the outputs locally and not have to ship them to markets around the US. This helps cut carbon and costs and localize the supply chain.
Could you talk about the cost of shipping compared to OSB or engineered wood products, and comment on the resilience benefits of this distributed model of manufacturing?
The real cost in the supply chain is not so much in shipping as it is in the finished product. You need to locate your factories close to your source of biomass because when you're trying to move around large bales of hay or trees it becomes cost-prohibitive very quickly.
A company we really admire, Huber, announced that they're building a $440 million factory. However, If that facility has a problem, and you have to shut down that line for any amount of time, you're losing money. We’re planning to build a much smaller line for $1.3 million, and our model is to build lines in parallel to each other. If one line goes down, we still have other lines operating. There is resilience built in by diversifying the manufacturing and distributing process.
Tell us about your team. How did you guys meet to form Plantd?
I met Huade Tan, who is our co-founder and CTO, back in February. He spent six years at SpaceX before moving to the Research Triangle Park to start a new company. In parallel, I had been feeling frustrated with engineered wood, seeing the price go up while the quality declined, and I felt there had to be a better alternative. When I met Huade, we were supposed to talk about manufacturing. But I put this idea out there, and he thought it was interesting. His team at SpaceX had also been thinking about alternative biomass and within 20 minutes, we decided to go for it.
There's a $100 million XPrize that Elon Musk is putting up for carbon removal technology. We were thinking that if we're going to lock carbon away, we have to think about structures in the built environment. About 80% of timber goes into residential construction, so we had our starting point. Huade led a team at SpaceX with our two other co-founders, Nathan and Ian. They had spent a lot of time thinking about keeping people alive in a small bubble going up to space, and now we're thinking about how to make sure that everyone is alive and healthy in the bubble that is planet Earth.
What is your strategy for funding growth now and in the future?
The founders put in some money to get the wheels turning. We know that we need roughly $4 million to get to market. With the goal to build an automated production line, we need to bring our hemp supply chain out of the ground and convert our Letters of Intent (LOIs) into revenue with builders so we can prove that we can sell structural materials. Then we plan to get more LOIs ahead of a later Series A to build that first factory. We decided to raise a fair chunk of that on a pre-seed round. That enables us to bring on a team to get the design and engineering work done over the next six months to be able to be in a position to build the production line.
What advice would you give on the capital-raising process, or deciding what the right capital is to grow a certain business?
My view is to raise the right amount that you need as quickly as you can. We came out of the gates with a pretty big number. Once we adjusted and said what our need was to hit the next big milestones in front of us, it became a more palatable number for a lot more investors. In the process of talking to many investors, we've become better at understanding whom we're talking to and then telling the part of our story that will have the most resonance with that particular investor. They’re all different.
Do you think that long-run funding for Plantd’s growth will come more from strategic investors and ventures, or who do you think that investment funds will cover the bulk of the work you are doing?
I think it's a mix. We've talked to a lot of funds who don't even invest in seed rounds. I know if we're going to get someone to fund us for a Series A and potentially beyond, they need to know us for a while and to see us operate. I feel fortunate that we're having those conversations now with VCs who are aligned on hard tech and climate, and whom we think would be great partners. We've been fortunate to talk to a number of family offices, too, where there is more flexibility on the types of deals they can do. We are in a space where our vision is to solve climate change and to revolutionize construction, but we are not software and we're in North Carolina, so we're not in the obvious geography for venture funding. I think we have to be as flexible as possible.
Could you say more about your own path as a serial entrepreneur and an executive at larger companies before arriving at this spot?
I wasn't raised as an environmentalist. I went to China in my 20s, back in the 1990s after college. I was thinking about a career, perhaps in diplomacy or foreign service. While I was there I ended up working for Kryptonite, a bike lock company. We were focused on selling into China because a billion people were riding bikes, and I was really excited about that opportunity. But I later realized that the future was not bicycles; it was cars. I didn't know anything about global warming, but I knew enough to know this was going to be problematic on a lot of levels. I came back to the US, went to business school, and worked for some bigger companies. But I couldn't shake what I'd seen and that led me on the path towards sustainability.
After starting my own companies and working for a few other companies, I got recruited to run our startup community in Asheville to build up infrastructure, mentor programs, an angel investor group, and all that fun stuff. Then I spent some time running a climate venture hub called The Collider, which is also housed in Asheville. Most folks don’t know this, but Asheville has the largest repository of climate data in the world at the NOAA facility. Our mission was to help scale up climate analytics startups that would be using that data to help cities, companies, and corporations understand their risk and exposure to climate change, and how to build resilience into their planning.
One of my startups, a high-design furniture company, eventually led me to Plantd. The journey has definitely been nonlinear. I have always felt that if you want to build a career around sustainability, you have to be extremely flexible in what you do and where you are willing to go, and just seize those opportunities when they present themselves.
Are there any habits or routines that help you uncover new insights, stay focused, or stay healthy?
Probably the biggest thing that I've adopted over the last couple of years was that I started doing meditation twice a day. I practice transcendental meditation. I had felt that professionally and in my personal life, I wasn't present enough. I'm someone who's definitely in my head a lot, so anxiety can be something that I contend with. I found that meditation helps ground me, it helps me creatively, and it helps my energy level.
Are there any books or podcasts you would suggest to our listeners?
The Interchange has been a great podcast for me to understand what's going on broadly in cleantech. I also really like the MIT Energy Initiative podcast. When I'm looking for great stories, I love This American Life. That's probably my favorite podcast of all time. These days, I also spend a lot of time in fantasy football podcasts so I can one day beat my 11-year old, who’s very good at it.
Is there a group or some type of person you'd like to hear from?
We have a ton of interest in talking with people who are in this industry, whether they're builders, architects, or contractors on both the residential and commercial sides. We are strong on building hardware, but ultimately, the technology that we're building is going to have an important software layer. If there are people who come from the point of view of meeting software and hardware, that's going to be really important to us.
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THE TORCH is an interview series from Entrepreneurs for Impact. We profile CEOs and investors mitigating climate change. Our goal is to highlight their work and inspire others. As we deal with multiple crisis, from Covid and racial injustice to climate change and economic recession, we need some of this positive light in what seem like dark times. Onward and upward.