Eben Bayer appears to have struck on a truly remarkable solution for more environmentally friendly materials, with massive potential. His startup has already raised over $150M in capital.
On the Dealmakers Show Bayer shared plenty about his journey. Including quitting your first job, on the first day, landing your first investor, spinning off businesses, and the three critical elements needed to have a successful business.
Listen to the full podcast episode and review the transcript here.
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Eben Bayer was born on the floor of a farmhouse in Vermont. He grew up on a real family farm. They had farm animals, chopped wood, swam in ponds, and made their own maple syrup, from their own trees. Then they took it to sell.
Bayer says his parents were opposites. His dad loved nature and working the farm. His mother was in publishing, and much more into technology.
Thanks to his mom they were among the first to have a Mac at home. At 3am he’d be heading out to chase the cows on the farm. Then when he was done with his farm work, he’d be back inside, asking his mom if he could play games on the computer.
At 18, Eben came out of the woods to further his studies at a Polytechnic Institute in the city. Seeing how people lived in this highly industrial way was a bit of a shock to him.
He began working towards a dual degree in both mechanical engineering and product design invention. Halfway through the first year he decided he made a mistake. He discovered “the most advanced and beautiful technology in the world isn’t a jet engine; it’s a chicken.” He realized biology as a beautifully complex technology that could be used for people to live sustainably.
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At university, he began working on the problem of if it was possible to grow glue to bind things together.
He had already seen mycelium growing wild back on the farm.
Mycelium is the root structure of mushrooms. It is the underground network that acts as nature’s recycling system. He and his friend and now cofounder began growing mycelium under their dorm room beds. Today, Eben uses mycelium as a material, which they grow into things.
It was actually their professor who suggested they drop out, quit their jobs, and work on this as a business. In fact, he called Eben on his way to his first day at work, and told him that he found $5,000 in the school budget that they could use to live on through the summer while working on this project. Eben arrived at the office, and promptly quit that same day. Their professor ended up becoming their first investor, and put $25,000 into the venture.
Storytelling is everything which is something that Eben Bayer was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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The 3 Critical Elements Of A Successful Business
Eben shared with the Dealmakers audience that he has learned that there are three vital elements to a successful business.
The first is to be sure you are solving really important problems. In his case it has become largely about industrial agriculture and plastic pollution.
Secondly, the timing works best when it is in alignment with cultural megatrends. Not only for consumer adoption of your products and technology, but also if you hope to get your startup funded.
The third is making sure that what you are working on is uniquely applicable to the problem you are solving. That’s your differentiator, and what enables you to build a defensible business.
Initially his startup Ecovative didn’t seek to raise a lot of outside money. Several years in, as they began to scale, they needed the capital. So far they’ve raised close to $160M. Though he reminds entrepreneurs that you investors are going to expect big returns, so make sure you can put that money to work in proportion to that.
The world has changed a lot since they started on this adventure. Today, the culture is much more in tune with the need to do better for the planet and our health.
Spinning Off Businesses
Founders often find themselves debating on growing everything in house under one umbrella, or to splinter off with separate brands.
Ecovative’s flagship product was Mushroom Packaging. A blend of hemp and mycelium grown together in a mold, which replaces polluting plastic based packaging. When you are done with it, it breaks down by itself.
Things really started to take off for Ecovative in 2018. They had hit profitability. Even as a small team. Then they chose to split up the business. A move which Eben says enabled them to attract the best talent in each area, and to be much more focused.
So, Ecovative has transformed into a material research platform, with the world’s largest mycelium IP portfolio.
MyForest Foods was spun out to commercialize a fungi-based bacon. Forager is growing leather for clothing.
They’ve faced their fair share of challenges on the way, but Eben has absolutely refused to give up and quit. Today, they produce a million pounds of products around the world, and are working on a factory which will triple that.
Listen in to the full podcast episode to find out more, including:
- Sticking with it on the tough days
- Getting help with fundraising or selling your business
- The books you should be reading
- How to get a 30% discount on the tools to set up your own podcast
- Wine as an investment