Convert food waste to plastic materials is a brilliant sustainable biotechnology. With that core technology, Genecis builds business strategies to achieve their goal.
About the Episode
A typical misconception is “Everyone can be a successful entrepreneur, provided they have a great idea”. When a startup comes into the market with an excellent idea, they must set up the boundary of the company strategically. One choice is to be vertically integrated. Which requires not only R&D team, but also the production line and management team. Another choice is to partner with existing players and license your technology to them. This requires an agile team and heavily focuses on R&D.
When facing difficulties, Genecis gave up the plan to vertical integrate the company. Genecis build partnerships with companies in waste management, food, and plastic circular areas. Genecis is added to value chains in those areas and successfully pivoted. Listsen to the episode and find more about Genecis’s funding and management strategies, and the entrepreneurial skills of Abdul.
Learn more about Genecis on their website.
Want to build partnerships or license out your product? Learn more about Intellectual Property and Legal Issues of IP in Altitude’s event!
About Host Patrick McGuire
Patrick is a creative entrepreneur, team leader, and Altitude Accelerator board member who has focused on the sales and success of companies including: HR tech, fintech, sports tech, Software-as-a-Service, cannabis (CBD / THC), nutrition, health and wellness, fitness corporations, and business of all sizes with a love for helping business grow and scale from $500k to north of $50m. With an entrepreneurial mindset focused on team-building, his ethical leadership delivers win-win solutions for his companies and clients.
Patrick McGuire (00:00)
Hey, it’s Patrick. Before we start, at the time of this recording, we went through a bit of a name rebranding from RIC Centre to Altitude Accelerator. With that in mind, we hope you enjoy the following interview. Welcome to the Startups Transform Podcast. I’m Patrick McGuire, your host, board member and advisor at Altitude Accelerator, where we help startups scale to new heights. We chat with phenomenal tech business leaders who climb their way to success within their industries. Our guests delve deep into the lessons they’ve learned along the way so that you can get a head start on your next big idea. This is going to be really neat. This gentleman, Abdul, we’ve got in contact with from our ecosystem that we’re networked with. And let’s just say he’s doing really cool and healthy stuff that has implications beyond what the first thing is that you think of right now. I just want to give a quick introduction to Abdul. Hey, Abdul, thanks for joining me, buddy. I appreciate it.
Abdul Khogali (01:06)
Absolutely. My pleasure. Thank you for having us.
Patrick McGuire (01:09)
Genecis is I mean, you think of that. It could be so many things. It is all about high performance bioplastics. What the heck is a bioplastic? Well, Genecis converts food waste into biodegradable, plastics and other high value materials. Now, Abdul, can you tell me really what it is that you guys are doing?
Abdul Khogali (01:29)
Yeah, for sure. So essentially the simplest way to look at it is we take in organic waste or food waste, really? And we convert that material into a form of birgetable plastic known as PHA, or PHA’s, for short. Now, the special thing about the plastic that we make is it’s actually made as a fat storage mechanism in bacteria. So they use it as metabolic energy in their cellular processes. So you could think of it almost like glycogen or fat in humans. Imagine the fat that we develop in our bodies were to be having properties of a plastic material. That’s kind of the way we look at PHAs and how it’s made in these bacterial cells. So essentially we grow it in these cells, we wait until they’re at the right level of maturity, and then we take out that material and we can use it in a wide variety of applications.
Patrick McGuire (02:22)
Crazy PHA. So is that fat? You know, we’re talking about fat. I mean, I’ve got enough to go around, Abdul. Okay, so what are these PHAs? The fat? What does it actually become? What are you guys making out of it?
Abdul Khogali (02:37)
That’s a great question. So we’ve actually developed a proprietary platform that allows us to make a wide array of items and product applications, and they could be from flexible materials all the way through to rigid materials. So we work with customers right now to make plastic products where the PHA is actually the substrate used to make the product itself. But we also work with other clients where it’s just a component of the bigger product application, whether it just be a piece of the packaging or one of the layers on the multi layer film application or whatever it may be. But yeah, we work with clients to do a whole lot of things with our plastic.
Patrick McGuire (03:13)
Where are you playing? I mean, you’re playing in the waste management space, you’re playing in the food space, you’re playing in a plastic circular economy. Am I getting that? All right, you’re kind of in all spaces and you bring them together, in a sense.
Abdul Khogali (03:26)
So we work in the waste management industry, kind of on the upstream side where we take in the material and we’re able to convert into the plastic, but we also work on the plastic side. And really, when it comes to a lot of these consumer product or packaging goods companies, they’re really looking for a sustainable material that has the right functionalities, sustainability profile and price point that they could use to replace a Petroleum based substance. And that’s really kind of where we fit in on the plastic end.
Patrick McGuire (03:53)
Amazing. And just to recoup that you’re talking about waste product that you’re facilitating, you’re converting, typically it’s a food source item, like a vegetation or otherwise. Is that right?
Abdul Khogali (04:06)
Typically, yeah. But it can actually be any form of organic material. And we worked with a wide array of organic material. So anything really that has carbons easily accessible to our bacteria to work with.
Patrick McGuire (04:19)
Amazing. Absolutely amazing. I think it’s so cool because we talked about this just before the podcast session started. But hey, we’ve got bad plastics that are out there, and I’m concerned about leeching and toxins and things like that. We’ve got food that’s out there being wasted. It’s sitting in. Well, not that composting is a bad thing, but perhaps it’s composted when it could be so much more using the Genecis process. So tell me, some awards, some partners, some of the cool accolades that you guys are getting from Y Combinators and even the government of Canada. So help us all understand what have you got going? What awards are you getting and what are some cool honorable mentions for sure.
Abdul Khogali (05:00)
So I think one of the simplest ways to kind of describe that is we’ve raised a total of about ten and a half million dollars cumulatively. But out of that ten and a half million dollars, seven and a half of it came from non dilutive funding sources. So that’s from the government. That’s from a bunch of awards that we’ve won and just other kind of things that we’ve been able to kind of achieve on our own. Just to speak to some of those, we got SDTC, which is Sustainable Development Technology Canada. They funded us to essentially scale our technology to the demonstration scale. We’ve also gotten another government grant just recently. I can’t talk about it publicly, but they’re giving us a couple of million dollars to do some work with the waste management partner as well. And yeah, we’ve won competitions with BASF Mondi Unilever, the Entrepreneurial World Cup XTC. The list kind of goes on. And we have this one guy on our team, Rob. He’s just amazing. He finds all these competitions and he really does a great job betting them and applying for them and pitching where needed. And yeah, he does a great job.
Patrick McGuire (06:07)
That is fantastic. Hey, Rob, if you’re listening to this one, Congratulations. And thanks for putting the effort in for the Genecis team.
Abdul Khogali (06:14)
Patrick McGuire (06:17)
When you guys are getting into these contests and into these grants and programs, are they looking for companies like Genecis or do you have to go and position yourself and say, hey, guys, we’re going to change the world and we want to be part of your program. How does that work out?
Abdul Khogali (06:34)
Yeah, that’s a great question. So a lot of the programs that are out there now are actually focused on sustainability or some aspect of a circular economy. Some of them are about abatement of plastic materials. And really we just apply to ones that are relevant to us that have kind of stakeholders that we could work with in the future. And we find that a lot of these events are really good for cultivating good partnership potential with some clients and otherwise. And one of the most recent ones that we’ve actually done was an innovation competition that we did with Novo Nordisk. And Novo Nordisk is one of the largest insulin providers in the world. Through that competition, we were able to really kind of show them what we could do. And it’s been a very interesting relationship since.
Patrick McGuire (07:16)
Yeah, that’s not exactly a small opportunity to work with a company like that. Right. That’s a big opportunity. I love it. So who came up with the idea of this thing? Where did it come from?
Abdul Khogali (07:28)
Yeah. So that goes back to Luna. Luna, our CEO, was looking to make ways to unlock value from food waste and organic waste in general. And she looked at the process originally and found that one of the advanced technologies that deals with organic waste that’s available on the market today is a form of waste management called anaerobic digestion. And she found that in that process, there are specialized fermentation bacteria that do a lot of this work. And she realized that you can actually optimize the bacteria in a different way to make a different product rather than biogas.
Patrick McGuire (08:04)
That is awesome. I can’t say it any other way than that. So I’d like to know maybe something about your background, something that happened early on in your career or childhood that perhaps impacts the way that you do business today and why we’re on this call.
Abdul Khogali (08:20)
Yeah. So I would say one of the things that had somewhat, in effect, was reading The Autobiography of Malcolm X. Reading that book inspired me because I know you might be a polarizing figure, maybe not the best in terms of controversialness and all that. But what was really inspiring about him was he was able to take his innate skills and Hone them to a very high level and be able to present himself in a really good way. And he went from being a two bit hustler, a criminal, so to say, all the way to a very respected member of the social movement. And just by talking and filling his ideas and others, he was able to make some change. And I found that to be a very effective way of just honing the skills that you have innately and using that in your business, your personal life, whatever it may be. And I find that everyone has that natural gift or that natural talent that they do have. And it’s all about just working on it enough so that you’re able to Hone it and use it to a high level of productivity.
Patrick McGuire (09:23)
I’m going to take something out of that, actually, and maybe didn’t say it, but did say it in a roundabout way, is we have to remember that you can always reinvent yourself. You can always strive to be better and to make a massive impact. And as entrepreneurs, as startup founders, as early adopters and partners in startup companies, that’s really what we’re doing. You came on Abdul to a team, and you made it better, and so did each one, including Rob, as you mentioned. But it was Luna’s idea. She couldn’t do it without this team. And even if we cycle it back to Malcolm X, you could go from and I’m going to use your words, not mine. The two bit hustler to a global impacting, super intelligent, incredibly respected figure. You don’t have to be the same guy today as you are tomorrow envision where you’re going to be an hustle in a good way. Curious. You guys founded in 2016, is that right?
Abdul Khogali (10:16)
So, yeah, it was founded in 2016, but actual company operations started in 2017, so it was founded, and then there was a lot of thinking behind the idea of what it could be. And then a team was formed with some of the original employees. Shout out to Marcos and Hass. There are two directors on our team right now, very gifted guys. I’ve actually known Hass for a very long time. He’s been able to do a lot on the R and D side, and Marcos has been able to do a lot on the engineering and scale up side. And yeah, it’s been amazing what we’ve done in such a short amount of time.
Patrick McGuire (10:48)
So initially, I mean, things change from the time that I was in the Ideation Incubation stage, if you will, to creating and developing. And even now today we all go through some little pivot points. Was there a pivot point in the company’s life that has put you guys where you are today? And could you explain that?
Abdul Khogali (11:07)
Yeah, for sure. So the way I look at it is almost like a continuous path of evolution. Originally, we were looking to distill volatile fatty acids, which are a certain chemical from food waste or organic waste in general. But what we found was you can actually make much higher value products from them. And that’s actually one of the really interesting things that we’re looking to do in the long term. Even though we’re focused on biodegradable plastics right now, we know that we can make a variety of chemicals and materials of the future using volatile fatty acids in the platform that we’ve developed so far. So I would say that was one of the original pivot points, moving from volatile fatty acids to a more specialized, higher margin product. But another one was kind of moving from Capex Heavy type of business more to a Capex Light business. And the way that we’ve done that is rather than looking to build our own plants, which would be quite expensive, not really VC or investor friendly, we’ve moved on to a model where we can actually work with waste management companies and piggyback onto their existing infrastructure to produce the materials that we make at a fraction of the cost when it comes to scaling the technology to deliver that material at scale, but also realizing a lot of synergies that exist with these waste management partners to better their business and better our role.
Patrick McGuire (12:27)
Excellent. And how are you doing that? I mean, partnerships, licensing, what do you guys do to make them or empower them to use your technology?
Abdul Khogali (12:38)
It’s exactly as you described the partnerships and licensing. But really, it starts off with working closely with one partner for a little while and taking a lot of the technical and economic risks away from the picture and then scaling that to other partners over time.
Patrick McGuire (12:53)
Very cool. I love it make it cheaper and easier for them to get involved, making it cheaper and easier for you guys on the Capex Heavy, as you mentioned, it’s good to know that, especially for those VC that are out there listening. And actually, while we’re talking about it, I mean, anyone that’s listening, anyone that loves green tech, the economy and the environment, these guys are actually raising funds. They’re going for their series A right now, and they’re going to close end of season, end of the end of the year, definitely. It’s a 2021 initiative. Is that right, Abdul?
Abdul Khogali (13:25)
Correct. So we’re looking to complete the round by the end of the year. And we’ve just recently begun this process. So, yeah, that in itself is definitely an interesting endeavor.
Patrick McGuire (13:36)
And how much are you looking to raise in this series?
Abdul Khogali (13:39)
Yeah. So we’re looking to raise about $8 million equity and then pair that with a variety of non dilutive funding sources. And we found that this model where you pair diluted capital and non dilutive capital allows us to protect our investors, but it also allows us to take the technology further on less resources.
Patrick McGuire (13:58)
Wow. I think every company needs to have an Abdul and a Rob to be able to figure out this strategy because it is a big deal. And just a reminder, they initially raised up to about $10 million, 7 million of that was coming from nondilutive strategic grants and funding sources to leverage and partner with those that are investing in the company and the success. So, you know, if they did it before with 10 million, you know they’re going to do it again with another eight to $10 million. So check them out, get on board, and maybe you can.
Abdul Khogali (14:28)
That’s what I’ve been telling.
Patrick McGuire (14:32)
You guys are doing is awesome. I love it. Just changing things a little bit. That pivot point from the volatile fatty acids, who made the decision to start looking at the VFAs versus what you’re currently doing and who sort of led the change on that pivot in the business as well.
Abdul Khogali (14:48)
That actually predated my time at Genesis slightly. But I know from the history of the company, which is commemorated in great detail amongst my colleagues. That was Luna, Hass and I think a couple of other members on the team who just realized that it isn’t the highest margin product, distilling it down to a certain kind of stable compound also might take a little bit of effort. So really, there was a bunch of factors that pushed us in a different direction, and they were able to kind of see the bigger picture and make that transition great.
Patrick McGuire (15:23)
And what might have been a bad decision that the company ever made because we can’t just tell the glory story we have to tell about the struggle.
Abdul Khogali (15:31)
Yeah. Honestly, I don’t mean to be a cop out or anything, but I don’t really look at any of the decisions that have been made at this point as really bad decisions. There’s times where we could have made a more optimized decision, for sure. But the learning that you get from that opportunity is quite significant in itself. It might be too early to tell in terms of big mistakes. So hopefully we don’t have any in the near future. But I would say we’ve definitely learned a lot along the way.
Patrick McGuire (15:57)
Fair enough. Abdul and I will call that one out for the startups and entrepreneurs and those that just like to sweat and hustle and suffer. If you can learn from anything, then it’s never a bad decision. As long as you’re failing forwards or finding a bad decision with a silver lining. What may have led to the most important thing that you think leads to the company’s success today?
Abdul Khogali (16:22)
Yeah. So I would say one of the really important things that we’ve done in the recent past was focus on customers despite our early stage. And a lot of times when you’re building out these hardware technologies or technologies that require a lot of infrastructure to get that manufacturing capacity to sell your product. It may take some time, but we found that working with the customer up front is actually a very good way of doing business, because not only are you able to really Hone in on the customer’s needs, you’re able to develop a relationship with them over time that speaks to your ability to deliver, and it builds that trust so that when they need you to come through on a big purchase order in the future, they know that your team has been able to deliver on several technical and economic milestones in the past. So, yeah, transitioning to working with customers right now and generating revenue immediately despite an early stage has been, I would say, one of the more beneficial decisions that we’ve kind of made over the last little while. And a lot of props to Luna. She definitely is the one that led the charge on that way of thinking.
Abdul Khogali (17:26)
Luna has built two startup companies in the past. She’s actually got both her Masters in undergrad at a relatively young age, and now she leads a team of almost 25 individuals. And I think she’s doing a pretty good job.
Patrick McGuire (17:40)
I would say so. And that definitely qualifies as a beast in business.
Abdul Khogali (17:45)
Patrick McGuire (17:46)
Let’s just sort of think about that. And you can think about the corporate answer, or you can think about your own personal answer in this one because you’ve been successful here in the business and growing the company with everyone. But what are three things you might have told your past self, whether it’s looking for the position that you want to have in life or whether it’s growing the company.
Abdul Khogali (18:05)
Yeah, great question. One I can think off the top of my head is having more empathy as a leader. Sometimes understanding the people that you work with really allows you to make better decisions. And I definitely got to give a shout out to one of my mentors who really taught me about this concept in more detail. His name is Carlos. Carlos is actually CEO of three companies somehow, and he does a lot of great work in the clean tech side of the Canadian ecosystem as well. But he really kind of pushed this idea on to me, having more empathy as a leader and understanding how your employees work, what kind of styles that they have and why they’re doing what they’re doing.
Abdul Khogali (18:48)
There might be a lot more to it than you initially think based on a result or based on why something is done the way it is. Another thing that is really important is just continuous learning. Even though we learn over time, when we get better at whatever it is that we’re doing, there’s always an opportunity to learn more. And having people like Carlos that I mentioned as my mentor or just other people in general who can kind of guide you and advise you on decisions along the way just so they can share their perspective allows you to learn continuously. Classes help, talking to different people, executive coaching, all those kind of things definitely help as well. Maybe I’ll leave those two for now, but if you want a third one, I’m sure I can think of one.
Patrick McGuire (19:30)
Good. So for the entrepreneurs and the start up spirited in you express empathy, understand what everybody else is going through. It’s not just software and hardware. It’s not just Genecis. It’s not just bio degrading stuff. It’s people that make this thing work. So I really like that. And two, for those listeners that are startups and entrepreneurs spirits, even the experts are still trying to figure it out. So keep learning. It’s an evolution of education forever. I’ve got three kids. They’re online schooling right now. And I keep reminding them that I’m still learning. I’m still learning to be a better dad, a better podcast host, a better business entrepreneur, a better everything. Heck, I’m still trying to figure out how to cut the grass better. So where do you see the future of the company and the success of the company? Where are you guys going? What’s got you guys excited to keep doing this?
Abdul Khogali (20:26)
Yeah. So a couple of things. I alluded to it earlier, but just developing a platform that allows us to really capture value from waste materials and make a variety of products with a course focus on PHAs first is definitely something that we look forward to in the future. And we really do believe that biotech space has a lot of room for advancement and potential when it comes to manufacturing of products and materials. And we really are excited to play a role in that space. But for the more immediate future, I’m really excited to see how we can capture more value from food waste and tackle the plastic pollution problem here in North America and hopefully expand it throughout the world. But of course, we’ll just focus on our own backyard for now.
Patrick McGuire (21:09)
I’m keenly aware of that. You got to focus on our backyard to start, but the vision you guys have for global impact is massive. There’s something on your website that I love. I love this line, but it says plastic without pollution. That’s exciting to me. And I can see how long does it take for you guys to go through your process with fully degraded products? One year. What if we go with these PLA bottles, if you will, that’s those plastic bottles, the single use and even other ones. But how long do they take to fully degrade 100 years? The zero ones and five. When you look at the recycling images on the bottom of your bottles, you’ll see that. Okay, fully degraded folks. 1000 freaking years. This is not good. And Genesis is making it go from 1000 years. Maybe it’ll break down. And what’s that leaving in our environment? What’s it leaching into our food system and just drives me nuts. One year fully degraded into a non toxic product. I’m in. I love it. What these guys are doing changes the way you think about the plastic that you’re going to drink from if you’re going to use it once and throw in a landfill somewhere, man, don’t get me started.
Patrick McGuire (22:26)
You got to call these guys up. And for manufacturers, Abdul, they can contact you, they can license technologies, and they could make a better plastic bottle or straw, is that right?
Abdul Khogali (22:38)
Absolutely. And I know that biodegradability is super important to a lot of consumer companies right now, but PHAs that we make have a lot of amazing other qualities, too. Excellent barrier properties like heat resistance, UV resistance. One of the really interesting ones is it’s actually biocompatible, meaning it does not cause any toxic effects in humans when ingested. Not sure if you know, but we actually have a lot of bacterial cells within our own body. They would be able to recognize PHA and break it down into the components that it breaks down into, which is carbon dioxide and water system. There’s a lot of benefits to using PHAs, and we’re excited to talk about them.
Patrick McGuire (23:22)
This is huge. Very excited. And I hope that all companies start to adopt this, especially as much as we all love to grab our on the go coffee. I won’t drop any brand names in here, but some of them have switched to some papers, which is good, but they’ve lined it with sort of a plastic thin coat, which is toxic, and it’s leaching into our bodies whether you like it or not, especially if it’s a hot drink product. We need a better choice. And I think that’s what we’re solving here with Genecis. So going back to when you first got this opportunity to join Genecis or perhaps even just any company to start up and be part of this entrepreneurial journey, would you do it?
Abdul Khogali (24:05)
Absolutely. I think it’s always kind of spoken to me, the entrepreneurial aspect of work. And I like working at smaller companies in the past just because I can feel my impact is going a little bit further towards the company’s goals and direction. And I feel in entrepreneurship that’s one of the best ways to do that. Happy to do it now, I’m probably going to be doing it for a while.
Patrick McGuire (24:28)
Yeah, absolutely. And most people that get that weird entrepreneurial bug DNA, whatever it might be, they’re always into it. And when, you know, you can make a big impact in the business, in the company, in others, but also with what you guys are doing at Genesis. But in the world, most people will say yes, and they’ll do it again and again and again. As long as you’re making a difference and you’re happy, even though it sucks for a period of time, you know, the outcome is worth it. So thanks for the honest answer. I appreciate it. And it’s awesome to have you on this session.
Abdul Khogali (24:59)
Thanks for having me.
Patrick McGuire (25:01)
How do people get in touch with you or with the company if they want to do business? If they want to talk about your seed series, how do we get in touch with you?
Abdul Khogali (25:11)
Yeah. So you could go to the website Genecis.Co spelled with G-E-N-E-C-I-S dot C-O. But Alternatively, you can contact me through LinkedIn and I’m sure we can get what you’re looking for. I have a pretty unusual name, I would say both first and last. So kind of hard to miss.
Patrick McGuire (25:32)
Yeah, absolutely. And for anyone that’s about to search him right now, the Abdul part, you probably got easily and spelled out pretty quickly. All right. But the last name Khogali K-H-O-G-A-L-I. Abdul. Kogali Abdul. I want to say a huge thank you. I give you great thanks for sharing your insights with us. Also, those stories and insights of Luna and the company. I love the vision and the future you guys have. So a huge thanks for joining me on the podcast today.
Abdul Khogali (26:04)
Absolutely, anytime. And I just wanted to say from my end too, a lot of the guys at our company, Luna, Rob Haas, Marcos, Patrick, the list goes on and on and on, but so many of them are doing so much great work and we definitely couldn’t be where we’re at today without the hard work and efforts of everybody on the team. So shout out to the whole Jenny team. We call it Jenny.
Patrick McGuire (26:27)
Excellent. Here we go. We got a Jenny team going on. So on behalf of Startups Transform to everybody listening today. I’m Patrick McGuire with Startups Transform podcast and we’re talking with Abdul and Genesis. So thank you so much, Abdul. Thank you, everybody, for listening and I look forward to telling your next awesome story on Startups Transform. Have a great day. Thanks again. I’m duel.
Abdul Khogali (26:51)
Patrick McGuire (26:54)
Thank you for joining us on Startups Transform podcast. You can subscribe to the show wherever you get your podcasts. If you enjoyed the conversation, a rating or review goes a long way. Recommend the show to a friend. Find us Altitude Accelerator.com, where we can help you begin your startup journey with access to our workshops, advisors and mentorship opportunities. Be sure to tune in for our next episode. Bye.