Largest Forest Carbon Project in the US. — Max Nova, Co-founder of NCX
Led by Co-founder and COO Max Nova, NCX is a VC-backed net-zero pioneer using AI, remote-sensing, and robust forestry science to map all forest assets in the US, create the largest forest carbon project in the US, and build a marketplace of high-quality carbon offsets.
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Could you share the story of NCX and talk about what you guys do?
At NCX, we connect big corporations that have made climate pledges with landowners all across America, and we use AI technology to monitor every acre of forest in the US. At this point, we're the number one provider of forest carbon grants in the US, running the biggest forest carbon projects that have ever been in the States, and it's all based on this technology that we've developed.
To what degree are the interim goals around the net-zero by 2050 targets relevant for corporations transacting through NCX, and who's making the decisions to transact through NCX?
There are these net-zero commitments that go out to 2040 or 2050, but we have to start making progress now because the scale of the problem is enormous. We see our role at NCX as helping bring scale to take on this challenge by being able to engage every landowner in the country.
Forestry is an important part of the solution, and it's something that we can start working on right now and get to scale pretty quickly. But it can't be the only tool in the toolbox.
Your question was about the corporate buyers, and what's fascinating is most of these Chief Sustainability Officer positions did not exist until recently. Everybody is trying to figure this out, and there's tremendous diversity in how this is set up in corporations across a bunch of different sectors. Sometimes the Chief Sustainability Officer reports to the marketing lead, sometimes they're part of the supply chain logistics group, and sometimes they report directly to the CEO. It's fascinating to see how this position fits into different companies because it reflects the organization's priorities and why they're making these commitments. There's not just one reason.
What is NCX’s approach to bringing landowners on board?
From a landowner's perspective, the alternative before was to do a traditional forest carbon project which could take two years and $200,000 to set up. Then the landowners had to promise not to cut down trees for 100 years. People don't want to sign contracts that long, and I think it's a real sign of hubris to believe that we can predict the future 100 years in advance.
Our approach at NCX is to take things one step at a time and then reevaluate every year as we learn. As the world changes, we want to make sure that every year we're making the best incremental decision we can with the best information that we have.
There's no upfront cost for the landowners because we've been able to do all this remote sensing satellite stuff to bring the costs down to get these projects set up. Instead of a 100-year performance period for their contract, it's one year. Every year they can look at the price of cutting timber and the price of carbon, and do what operationally and financially makes sense for them.
We're giving landowners more options. It doesn't cost that much money on a per ton basis to pay landowners to defer their timber harvest by a few years. The trick is the further you push that out, your ability to optimize for net present value curve gets trickier. At some point, the price of carbon won’t be high enough. It's an economic decision, and I think one of the errors that a lot of people make in the climate space is to think that forests don't exist in an economic system.
Forests are part of the economy just like anything else, and they’re the biggest financial asset for hundreds of thousands of families in the US. Carbon programs that don't get the economics right are never going to work.
Can you say more about how NCX combined forestry and AI to arrive where you are today?
Zack Parisa, our CEO and Co-Founder, and I met up when we were both at Yale University. When we started the company over 11 years ago, our goal was to commercialize this technology that Zack had developed to take satellite imagery paired up with a small number of field measurements to develop high-resolution, high-accuracy forest maps.
The first 10 years of the company were all about selling that data to big timber managers in the United States, so we got good at measuring efficiently and economically. At NCX, we measure every acre of forest in the US every year. I think we'll probably never get away from having to install some number of field measurements on the ground because these systems are complex. A lot of our job is to figure out how to optimize that so we get the maximum information for the minimum cost.
So, you all are currently mapping and measuring carbon on every acre of forest in the US?
Yes, one of the big unlocks for us was partnering with Microsoft and their AI for Earth program because it's computationally intense to measure every acre of forest in the United States. They are awesome partners for us. They bought some of the first carbon from our pilot project and they invested in our Series A capital raise.
Could you tell the story of NCX’s development over the last 10 years or so?
We were always focused on using data to change the way forests are valued and managed. Five or six years ago we started using our data to help conventional forest carbon project developers, but we started to feel like the way that a lot of these projects were set up felt outdated. Now that we have the technology to measure every acre every year, we felt that there had to be a way to run these projects.
The secret was realizing that selling data isn't a great business, but fundamentally changing how forests are valued and being able to take a part of that upside has enormous value. With the parade of climate pledges that have come out recently, there's been a tsunami of demand for forestry-based carbon offsets. We were written up in the Wall Street Journal and then we landed our Series A in May.
We've gone from 10 people up to 40 people, and we just got our first C-level executive out of a public company. Things are moving along, and we've continued to crank out large-scale forest carbon projects. It has taken off, and now we're in every state in the lower 48.
What inspired you to be so excited about this idea to work in forestry that you heard as an undergraduate student at Yale?
There was a summer internship job in the School of Forestry, and I took it. I ended up in this lab with Zack who ended up being my Co-Founder at NCX. I've never met anybody else like Zack. To develop solutions that work in forestry, you have to pull together so many different fields of human expertise like statistics, operations, ecology, politics, economics, and more.
I was drawn into his ultimate vision for what is now NCX. Zack was going to publish some of his work as his master's thesis, and I told him it sounded like a potentially great business. We sat down and did the math and realized it could be a hell of a business. Now here we are 11 years later, and it's been a fruitful partnership.
We're extremely different people on all sorts of different levels, but it makes us an effective team as we build this thing from nothing. We started off by getting into Zack's truck and driving South to talk to people that had a bunch of timber and that was how the business got started.
Is there any advice you would give to your younger self?
That's a tough one because I'm not even sure it's a good idea to start a company. When I look back over the last 10 years, I'd say maybe six months was solid thinking brain work, and the rest was pain tolerance, blocking and tackling, and doing all the little things right all the time.
There's no guarantee of success, and that's a really scary place to be. There were times over those 10 years where Zack and I got pretty close to the edge of the abyss. I think that one of the benefits of going into a more established institution is that they have structure and frameworks built up for you, so you're doing something that already has traction and it's a much more efficient use of time. It’s tough to give advice because so much of my success here has been riding the lightning and getting lucky.
The one piece of advice that I continue to think about a lot is from one of my college roommate’s father. At graduation, I asked him if he had any advice, and the one thing he said was this: "You just got to hang around the basket. You just never know. Sooner or later you're gonna get a chance to just dunk it, and then you dunk."
Right now we're dunking, but we were standing under that basket for a long time until all the factors came together to make it possible. It's tricky to give advice because we could just as easily have never had the chance to dunk.
Do you have any personal habits or routines that contribute to your success?
I'd say there are two big ones. One is that I'm a book maniac. I read all the time, normally around 100 books a year. I tend not to read business books, but rather biographies, histories, and other random topics just to understand how the world works. I'm a very different person now than I would be if I hadn't read all those books.
The other thing is that I have no shame about reaching out to people. The book thing goes a long way here too because I have a 100% hit rate on getting meetings with people. The way the email goes is like this: "Hey, I'm Max. I'm the founder of this company. I read 100 books a year, and I read this book that I thought you might be interested in. Here's a link to my review and summary of it. I'd love to meet up with you for coffee at some point and talk about it."
To see a few years of my book summaries, you can check out my site: https://books.max-nova.com/
People get that email and they're like, “Well, this is weird, but I actually should read the book.” There's some art in choosing the book because it can't be in their field; otherwise, they probably will have already read it.
What books would you recommend?
I will list a few of the books that have been very influential to me. In terms of personal productivity, I really like the book Getting Things Done. Some of my favorite biographies are Endurance, The Wright Brothers, and The Power Broker. One of my favorite environmental books is Seeing Like a State. And a few fiction books I really like are Lord of Discipline and Dune.
Who are the kinds of people that you want to hear from?
For us, the next few years will be all about growing both sides of the market. We are looking to sell to corporate sustainability people, and on the other side, monetize forest carbon for landowners. Right now we are very focused on how we can bring our approach beyond the US, and we are looking to find people with interests and expertise overseas. We are also always looking for introductions to new investors.
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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.