276 | Disrupted Agriculture in a Disrupted Climate with Eddy Badrina
Our guest this week on the pod is Eddy Badrina. Eddy is the CEO of Eden Green Technology which, through it's vertical farming stack, is changing the way we farm our produce and feed our communities. They are a great example of an economically viable vertical farming company.
And a special thanks to members of the Awarepreneurs Community for sponsoring this episode!
Resources mentioned in this episode include:
Lessons from a Leading Vertical Farming Company: Interview with Eddy Badrina
NOTE: While it’s not perfect, we offer this transcription by Otter.ai for those who are hearing impaired or who don’t find listening to a podcast enjoyable or possible.
SPEAKERS
Paul Zelizer, Eddy Badrina
Paul Zelizer 00:02
Hi, this is Paul Zelizer, and welcome to the Awarepreneurs podcast. On this show, we dive deep into wisdom from some of the world's leading social entrepreneurs. Our goal is to help you increase your positive impact, your profitability, and your quality of life. Before we get into today's topic, I have one request. If you could hit subscribe and do a review on your favorite podcast app that helps more people learn how to have positive impact or values based business. Thank you so much. Today, our guest is Eddie Badrina and our topic is Disruptive Agriculture in a Disrupted Climate. Edie is the CEO of Eden Green Technology, a leading vertical farming company. They are changing the way we farm our produce and feed our communities through their vertical farming tech stack. Edie, welcome to the show, Paul, thanks for having me. I'm so excited to do this. I don't know if I told you this before we hit record, but I'm a raving mad home gardener and permaculturist. And it's so glad to hear that. Yeah. So like, and I live in Albuquerque, New Mexico. And this summer was a really hard growing season here because it's so hot. And now, here we are November 1, you know, as we're recording this, and things are actually starting to grow again. And it looks pretty good out there. But this summer, our garden didn't look very good. So this is a very close to home conversation, and you're the right person to help us help us have it. So thank you for being here. Yeah, you know, you you're experience of just the extremes of weather is really a micro microcosm for what the entire ag industry experiences now on a regular basis. So if you can imagine as difficult as it was to grow on your end, just for your own personal garden and your personal consumption, maybe your neighbors around you imagine what it looks like on a commercial scale, when millions of people are relying on your on your harvest, and it doesn't come through because it's extremely hot or extremely cold. That's really the challenge that that the modern agriculture industry is facing. So really, the only one is why you're saying it the only people who really need to pay attention to this episode, are the people who don't grow 100% of their own food. Is that what you're saying?
Eddy Badrina 02:19
Pretty much, pretty much. You know, if you do that, then more power to you share it
Paul Zelizer 02:24
with your neighbor, right, high five. I'm not quite there yet. So anyway, I'm really excited to have you. Before we get into this specific topic about agriculture, disrupted climate and your vertical farming company, Eddie, that give our audience a little bit of your backstory, like, you know, what's been your professional experience? How did you get excited about sustainable ag?
Eddy Badrina 02:47
Man, my entrepreneurial journey is pretty sorted and circuitous. So I like to divide my career up into three stages. The first stage was government. So I was an analyst in the State Department for about four years pre and post 911. So I've got all sorts of stories on Middle East foreign policy. And then I was two years with President Bush as his Asian American spokesperson. So that was my first chapter, which is a pretty interesting chapter and of itself. But then I moved back to Texas. And my second chapter, after a couple of years in career wilderness was actually starting a company from scratch, I bootstrapped a digital marketing agency back in 2010. And my business partner and I were fortunate enough to grow it successfully for six years. And we actually sold it in 2016. And then we bought it back 11 months later. So that's my second chapter. And it's an entrepreneurial chapter, just bootstrapping something from scratch. But during that time of call it around 2018 2019, I really went through just sort of this personal crisis. And it was it was one where I knew I wanted to be doing something more. Not necessarily better. I mean, it was a great company that I was running, and I love the people on the team and what we're working on, but I just wanted something more meaningful out of my life, and my vocation. And so this began a year long, probably more than a year long journey to figure out what I wanted. I would say the, the big thing, you know, for entrepreneurs, especially, but just professionals in general is very few people can openly and articulately state what they want. For whatever reason, right? You may be afraid of what other people think. You honestly may be afraid of what that means for you and where you want to go and maybe was you know bumps up against your prior dreams of you know, what's your what's your career should look like. But once you can actually state what you want in life, it really opens you up to a whole host of opportunities. And you're not operating out of fear anymore, you're really operating out of a clear, concise focus and vision for what you want to do in life. And not just vocation, but just your life in general, right. So for me, personally, I had to articulate what I wanted. And the three things that I over that course of time I was able to articulate was one, I wanted to run a hardware software company. So I had been there done that gotten an m&a t shirt for professional services. The second thing I wanted to do is I wanted to have a an exponential impact, sort of for every one unit of effort. I wanted to see a 10 to 20x Return on culture and society around me. And then the third thing I wanted to see is I wanted to run a redemptive organization. So practice labs out of New York City, espouses this redemptive framework for organizations, both nonprofit and for profit. And it's one where employees are treated generously, not just fairly, it's where leaders are sacrificial, and not just ethical, if you will. And it's where society is not just a net positive, it's not just advanced, but it's actually renewed and redeemed to something. Maybe that's even better than what was originally intention. So those three things redemptive organization, exponential impact, and then hardware software kind of led me to eating green. I've talked with some investors, and even green, they needed new leadership, took a look at the company. And it checked all three of those boxes that I had previously defined some months ago. So it was a very easy, I call it the the easiest hard decision I had to make to jump from my marketing agency called Buzz shift over to even green
Paul Zelizer 07:05
deployment that was around 2008. That was 2019. I meant to that. Yeah, okay, doesn't make great. And we'll put a link to Praxis Labs. I hadn't heard of them before. So listeners, if you're new here, we try to put as many resources as we can in the show notes. So one of the things that you said, Edie that I really just resonated with. And you said before we hit record, when it comes to the Ag tech, sustainable ag space, you said, there's a lot of hype, and also a lot of fluff. So help us understand if listeners like Alright, give us all a not so hyped not so fluffy, you know, version of like, what's happening in ag tech? And how are people in ag thinking about growing food in a disrupted climate?
Eddy Badrina 07:56
Yeah, so it's probably good to state the problem at hand. And then and then get to Okay, how are people solving for that problem, right. So the big challenge at hand is at least in the leafy greens part, as well as herbs, fruiting crops, but let's just go with leafy greens for hot second 90% of all leafy greens, and like 95% of all lettuce is grown in two spots in the United States. One is Salinas Valley, California. And the other one is Yuma, Arizona. So you've got a literal desert. And then one that because of water restrictions and labor issues, gets pretty close to being very, very much like a desert terms of water. So that's where if you were living on the East Coast, if any of your listeners are in Boston, or New York or Philly or anywhere else, nine times out of 10 You're eating a 3000 mile salad that is economically and environmentally unsustainable for America. Right? Even if you could afford it, it still doesn't make sense. So that's the big challenge that we're trying to solve. We're actually not even solving so much of a produce issue or solving a distribution issue. So in the controlled environment, AG, industry, CA as it's known in the CEA industry, there are really two solutions right now. One is greenhouses. So flat tray, greenhouses. They're very common in the Netherlands and France and Spain, Portugal, all over Europe, and they're becoming more common here. And those are economical, if they're at scale, like if they're huge, 1530 acres 60 acre facilities under roof. So that and those will make up I'll call it 15% EBIT da right earnings the For an interest, tax, depreciation, amortization, those are those are great if they're at scale, and I'll tell you right now, if you try to find 15, 30, 60 acres, remotely near a population, good luck, it just won't pencil into the project. So they solve for the produce problem, but they're still far away from population centers, they don't solve fully for the transportation and display the distribution issue. On the other end of things, you've got vertical farming companies, in their indoors in warehouses, maybe new buildings, but they've got hundreds of 1000s of lights in them. And that is really a problem as well. Because while you have the density and the verticality to be able to put closer to population centers, the capital expense for all of those lights is extremely high. And then the operational expense of running all those lights in the electricity. Not only is the expense high, but the ESG components of it are it's a pretty thin veneer, because then you ask like, Okay, where are you getting all that electricity? By our estimates, and not just ours, but industry estimates will say, for every acre and a half of vertical farm, you're probably using four to 5 million kilowatt hours a month. That's like a data center.
Paul Zelizer 11:29
And like give us like, what, what would a typical house or a neighborhood use? There's so many like, I don't know, it sounds like a lot, but I don't know what that means.
Eddy Badrina 11:36
Oh, gosh, a typical house would use 2000 kilowatt hours a month, yeah. 1000 kilowatt hours a month. I mean, it's, it's significant. Right. So when you're using that much light electricity, and you're using that much electricity to control your H fac, what you end up getting is you have to sell really expensive things. And so you'll see all these vertical farms, a lot of them have already made the switch. So they have they've gone bankrupt. Fifth Season, as we're recording this fifth season just went out of business in Pittsburgh, fantastic greens, great produce great skews in the marketplace. But the reality is, they couldn't sell enough to make ends meet. So you'll see a lot of these vertical farms switching over to microgreens, mushrooms, and strawberries. Those are all great. But Paul, let's be super honest, the vast majority of everyday Americans aren't surviving on mushrooms and microgreens. They need the basics. So vertical farms don't solve for that. Because they're too expensive. So those are the two spectrums of CEA. So then you're asked, okay, how do you solve for that, and that's, that's where we come in. That's where eating green comes in. So we've combined the verticality and the density of vertical farms, with the economics of greenhouses, so we're vertical, that within a greenhouse that sounds really easy. But it's insanely difficult, so difficult, that we actually have a patent on how we grow things, and what we grow them in. So literally, no one else in the United States can do what we're doing without infringing upon our patent. Like, if somebody
Paul Zelizer 13:31
hasn't seen the go to the website, and I did a bunch of homework and watched a bunch of videos and but we're an audio only podcast, if so many, like what does this greenhouse look like? Like, like if I walked if I if we walked in together, and you're kind of pointing out important features? What would we be seeing?
Eddy Badrina 13:52
So if you walk in the doors, one, you can go through this full on food safety protocol. It's not as clean as a cleanroom like for, you know, microchips and the semiconductor industry. But it's pretty stinking clean for having organic material in it. So you go through this full food safety protocol, and then you walk in and you'll see this long aisle about, you know, an acre and a half right down. And on each side of the aisle, you'll see rows and rows of 18 foot vines. We call them vines, their grow towers. Each of these grow towers have 36 plant spots in there all space like 11 inches from each other. You put all that together, and what you end up is with 328,000 plant spots in an acre and a half. Those will produce at optimum levels will produce probably anywhere from 13 to 17 harvests a year depending on the variety. So what you're really pushing out there is around 1.8 to 2 million pounds of leafy green In a year, sounds like a lot as because it is, it's equivalent to 45 acres of conventional row crop farming in terms of volume over the course of one year.
Paul Zelizer 15:11
And this can be done in the space of maybe a fairly decent size, but not extraordinary commercial warehouse, right, that's part of
Eddy Badrina 15:19
the it's, it's a, it's a greenhouse. So I want to sit in. And what you mentioned there is very common in when people I talk to people automatically or their minds get to some sort of warehouse, that you have to then light up with a bunch of lights. That is what vertical farms indoor vertical farms are doing. And it's too expensive, you actually have to put it in a greenhouse, and a 24 foot tall, acre and a half greenhouse.
Paul Zelizer 15:49
And that kind of size plot of land is available in most environments, right. So that's part so you all aren't 300 miles from the place where the people are eating the food, you all might be two miles or 10 miles from the place that people are eating.
Eddy Badrina 16:05
So we're actually adjacent to, and in some cases, co located to distribution centers. And so when we, when you think about the supply chain for food, not just produce, but any type of food, to a grocery store, to a restaurant, to some sort of food service facility, it really starts with a distribution center. So all the different producers, suppliers, they all go into one distribution center. And that distribution center then distributes out to stores. So for instance, the largest largest retailer in the world, Walmart, one distribution center of theirs will distribute to 150 of the Walmart stores. So if you can be co located or adjacent to distribution centers, you basically cut the supply chain from 1500 miles, or 3000 miles all the way to zero miles from, you know, to each of those grocery stores, because Walmart's already priced in and they've already figured out the logistics from distribution center to grocery store. We place our vertical farming company right next to where the food is already shipped from.
Paul Zelizer 17:18
2 million pounds of food, that's a lot. I know we grow in our home garden, and it's not 2 million pounds of food.
Eddy Badrina 17:27
Yes, if you look at the USDA, sort of average serving, that's around five and a half to 6 million servings of grains. Right.
Paul Zelizer 17:36
Now, inputs, this is one of the big things about, you know, growing under cover. And anyway, and thinking about changing agriculture inputs is such a big conversation. So for instance, as I was doing my research, I saw that this technology, the whole stack of what you're doing, at Eden, green for spinach to get one plan has been EJ, according to your website, if I was reading correctly, it said normally would take about 35 gallons of water over the course of you know, the lifecycle of that plant and the process that you're using. You're telling us that it's about point seven gallons over the lifecycle of the plants. Is that about right? And like that's a pretty severe reduction of water usage, right.
Eddy Badrina 18:22
Yeah. So, you know, all plants drink water. It's called transpiration, right. And they use water plus a sunlight to engage in photosynthesis. And then and then carbon dioxide, right. So when you when you start comparing open field farms to greenhouses to vertical farms to folks like us, the question you ought to be asking is, how much water do you waste? If everything was equal in every plant, and each one of those environments drink the same amount? How much water do you actually waste? And the answer will vary from a row crop farm. 45 acres of row crop farming will probably waste around a million gallons of water a year. And not only is that water wasted, it's full of synthetic fertilizers full of insecticides, pesticides. It's full of runoff from other areas. It's full of the stuff that came from the rain, right. So million watt million gallons of contaminated runoff. By comparison, one of our acre and a half greenhouses for the entire year, Paul will only waste 90,000 gallons of water for the year. And you think Man, that sounds like a lot of gallons, but actually it's not. Your house in my house. On average, the average American household will waste 45,000 gallons of water a year. So let me repeat that in two households worth of water waste. We can produce just under 2 million pounds of produce in a year
Paul Zelizer 19:59
and we Living here in New Mexico, the state with the least amount of surface water, and of any state in America, that means something to me, I understand why this is important and where we're going as climate is shifting. In general, we're getting warmer and drier, the warmer we get the more evaporation like, you know, I'm I'm very, I'm deeply understanding why this is important. Now, one of the other inputs that Ian is energy, and you already described the energy of transport, and by locating buddy, having the ability to grow food in such a way it's close to where distribution happens, it's quite a big decrease in energy there. Many other forms of growing and some sort of structure, whether it's greenhouse or warehouse or whatever, there is a lot of energy that's going towards lights especially right, there's, there's a number you know, heating, cooling and light. So talk to us a little bit about there, because that's one of the places that some of the more hyped up version of new agriculture kind of break down for me there as somebody who's like, also really concerned about what's going on with greenhouse gases and other things like that. How does your technology, you know, how does it How does it impact in terms of energies?
Eddy Badrina 21:28
Yeah, that's, that's a great question. So a lot of what vertical farms did, and they're doing is in order to control plant growth, and to optimize plant growth, they're trying to control for all the variables, the biggest variable of which is light. And so when you try to control light, and you block out all the lights in a warehouse, using a warehouse, and then you put artificial lighting in there, what you end up doing is you grow plants really well, but you end up expending a lot of energy. Right? So really, the question is, how can you use as much sunlight as possible in greenhouses and in us, with our vertical greenhouse, have have figured that out, right, use as much sunlight as we can, and then complement where you can for cloudy days for seasonal patterns, right? To to get consistency of produce to the consumer. So there's really a trade off. And it's and it's really the trade off is, hey, you know, greenhouses even use US electricity, we use electricity to to help complement the sunlight? You know, isn't there? You know, there's a cost for that. And in our, our responses, yes, there's a cost for that there is electricity costs, there's electricity usage, but the trade off of not having a truck that in from 1500 or 3000 miles away with all the diesel, all the infrastructure cost, all the rotting and the waste in that long supply chain, that trade off is totally worth it. It's not even a question of whether it's worth it. Right? Because when you think about an open field farm, on average, on a good day, good harvest will waste 20% of its harvest just on the field. So right from the get go, you'd get 20% waste on the field, then you get into a truck that then travels across the United States, or to your town, wherever that may be whether it could be hundreds could be 1000s of miles in that trucks Bersih burning diesel along the way. Oh, yeah. By the way, in order to harvest all that row crops. What are you using? Well, you're using tractors, well guess what tractors use diesel too. So no tractor that I know is powered by the sun. So you've got energy usage right there. That's not even being metered or measured. So you got energy usage to harvest, you got waste on the harvest, and you got energy usage to transport that harvest to the distribution centers across the United States. There's waste along in that supply chain as well. And then they sit in the distribution centers before they go out. So you tell me, is the trade off worth it? I think so.
Paul Zelizer 24:19
So let's do this in a moment. I want to come back at the end here where Eden green is now as a company got some very exciting things are really significant farm in North Texas I want to ask you about and some other questions. But before we do that, I want to take a quick break and hear a word from our sponsor. Do you have a business that's about making the world a better place and you want it to grow both in terms of your impact, helping more people and your income so you could live a good quality life? If you do. I'd like to talk to you about some research for a second. When scientists look at what actually contributes to humans reaching their goals The single biggest predictor, whether it's a wellness school, or it's a business school is what they call social support. In other words, a group of people who are on a similar journey, who can help you with specific strategies that work on that journey at the time and point of development that you're on, as well as emotional support for the ups and downs of that journey. Being a social entrepreneur has highs and lows, right? If you like that kind of support, but we're printers has a community called the AWARE printers community, over 270 really generous and really skillful social entrepreneurs. And that's what we do with each other. We share concrete strategies, as well as emotional support for the ups and downs of the journey. If you'd like to find out more, you can take a look at aware printers.com. Forward slash community. And thank you to everybody in the world printers community who helps sponsor this podcast. So welcome back, everybody. Eddie, in the second part of the show, we like to joke about right let's let's we got the concept. Now we got the big picture, let's put on our social entrepreneur glasses and get into some of the granularity. So we're talking three years since you came on as part of a new leadership and like, where's the company now in terms of like team, and if you comfortable sharing overall sales, etc?
Eddy Badrina 26:25
Yeah, so we are, we're in a really good spot. So in the midst of the pandemic, we built our second facility in just around 12 months, which is shockingly fast for the industry, whether or not you're in a pandemic, whether or not you have extreme supply chain bottlenecks, but we pulled it off. And happy to say three weeks after we opened it, we are already contracted out of the entire greenhouse. So now we need to build more. And so that's where we are right now I'm in the middle of a capital raise, and we're in our series B. And, you know, we're, we're looking to raise around $100 million, and that we'll build quite a number of greenhouses in North Texas, but then also starting to expand our network. And the vision for it is to have a mesh network of greenhouses all across the United States. So I speak a lot in software terms, and it's just, it's just where I came from in the technology sector. So a mesh network of greenhouses call it 40 of them in five years. 80 of them in eight to 10 years, will, you know, at the end of the day, be greenhouses infrastructure, providing affordable produce to everyone. I call it nationally, local. And when you have that mesh network of greenhouses, and it's decentralized, growing and it's local, what you end up doing is you ended up changing the landscape for how produce is consumed, right, because all of a sudden, it's affordable, and people no longer have to choose. If you're on a budget, if you're just the average everyday American, you don't have to choose between produce that's gonna go bad in your refrigerator in three or four days, or the processed foods that you put in your pantry that lasts for a couple of weeks, three weeks, four weeks, you can actually get produce that tastes great. It's locally grown, and it'll stay in your fridge for two to two and a half weeks. That fundamentally changes the game. And that's the vision that we're trying to try to achieve.
Paul Zelizer 28:39
Talk to us about the people part of the business like we walk into in your greenhouse, how much of it is some technology involved? And how much of it is humans touching the plants or adjusting lights or things like that?
Eddy Badrina 28:53
Yeah, so each one of our greenhouses can employ up to 25 full time employees. That sounds like a lot, it actually isn't for the amount of produce that we're growing. So it's a combination of tech and people in We're farmers, right? We've got scientists are inventors or engineers. But at the end of the day, we're farmers. And so we know and we understand and we believe that a human touch with plants is always going to be useful, it's always going to be beneficial. So where we can automate and have some of the mundane things, you know, automated and done with robots will do that. But at the end of the day, we always want to have human touch involved with the plants in some some way or fashion.
Paul Zelizer 29:43
And how many people work for the company so far?
Eddy Badrina 29:46
So we've got 56 employees right now.
Paul Zelizer 29:48
Congratulations. Thanks.
Eddy Badrina 29:51
It's exciting and it's growing. So with each greenhouse, we add 25 more workers 20 Five new farmers in this industry that's just growing, no pun by leaps and bounds. And so we're excited to be training this new generation of farmers, we actually would prefer they would come in at the entry level. And we can teach them the way that we grow, we can teach them excellence and diligence at their job. And then we can prepare them for career development, whether they stay with us, or they go to another CEA provider, my, my mantra, my mission really is to train up the next generation of 21st century farmers. And so we welcome folks at the entry level point.
Paul Zelizer 30:41
And I know when I talk to impact oriented young people, they're like, I wish I knew how to have a career in sustainable food, whether it's at the farmers market, hanging out talking to people or talking to people who reach out because of this podcast, such a huge hunger for that. And we have done such a horrible job historically, of caring for the people who grow our food and young people. Yeah, really feeling a longing and not in, in a more industrial farming arrangement. It's not fun to be a farmer. But some of these new arrangements, it's really fun, to be a farmer is really meaningful, and you can have, you know, quality of life, not. It's hailing, and you're like biting your fingernails at three o'clock in the morning, because your entire years, income could literally get crushed by hell in the space of an overnight hailstorm. Right. So so what I hear you doing is making the ability to feed other people, both very meaningful, but also a little, you're taking some of the risk out for the individual who's choosing this as a career path? Is that fair to say?
Eddy Badrina 32:00
Yeah, that is, and I would say the other thing that's meaningful is that they don't, they don't need to live in a rural community, right? They can live where they live now. And work in one of these greenhouses, right, that's the goal is to have these in urban or Peri urban areas, which, by the way, that's, you know, the companies that have built these distribution centers in these retail retail stores, they've already done the homework for us, they know where the population is, they know how far they're willing to drive, they know what the rates are for, for, you know, hourly, and salaried workers. And so we just, we don't want to reinvent the wheel, we will, we'll draft off of their homework and go place it adjacent to their distribution centers. So it really does provide a whole new set of population that the urban and the ex urban and Peri urban with opportunities they never had before.
Paul Zelizer 32:58
So in three years, you've got to really thrive and greenhouses kind of sounds like you're selling as much as you can grow. And now you're in a race, trying to scale that. So like, look ahead, like five years from now, where do you think Eden green is? And what does the company look like?
Eddy Badrina 33:19
I think five years from now we'll have, we'll have upwards of 40 Greenhouses all across the United States, I think we'll definitely be out of Texas, will will be in the Midwest will be in the southeast will be in the northeast, possibly the west coast. But really what we see is the beginnings of this mesh network of this, this infrastructure of greenhouses in five years. And I think that's that's just the beginning. It's just the beginning.
Paul Zelizer 33:48
Don't forget your neighbors in New Mexico. And so like, what's happening in the space of sustainable ag in general? Like, are you all feeling part of an ecosystem? And you're one innovator that's doing well, among many? Are you seeing other companies? You know, you mentioned one that had a business model that wasn't viable? And I've heard of a number of those, like, are you an outlier in this space? In that you're doing well? Or are there a lot of companies in the, you know, growing food in the new ag let's call it the new ag world that are thriving?
Eddy Badrina 34:29
Yeah, I would say, man, there's been a lot of hype around our industry. Back in the the easy money, the free money days of even last year, right. The last seven years has seen just from a macro economics trend, the last seven years has seen very, very cheap money. All of that's coming to a close and people are really starting to focus on profitability now. And I think a lot of folks in our market in our industry have unfortunately got caught up in that easy money era. And they were focused on kind of growth at all costs, and these big huge visions, but they no one hardly anyone was talking about unit economics or profitability. Well, when you go from that easy money era, to all of a sudden your investors are saying shift to profitability, Something's gotta give. And it's either going to be your budgets, or it's just going to be your company in general. And or it's going to be your your pace of growth. And then obviously, if your pace of growth slows, it doesn't match up with the expectations you gave to the investors about growth. So a lot of you will see a lot of consolidation. And unfortunately, the number of companies that won't make it in the next call it 12 to 18 months, simply because they ran out of cash, and they couldn't shift to a profitability, a profitable model. quick enough. There are a couple of there are a couple of companies that are doing it well. And those those companies are actually flat trade, greenhouses. There's not a vertical farm that I know, indoor vertical farm that I know, that's that's doing well, unfortunately, they just haven't, they haven't really thought about the profitability piece long enough. And now they're now they're in a heap of trouble. So we felt for the last three years since I came on board, we felt like we were sort of profits in the wilderness talking about unit economics and profitability and cashflow positive nature on one of our greenhouses. Well, that's, that's come to roost. And it's actually put us in a much better position than most of our most of our colleagues almost actually almost all of our colleagues in the vertical farming space. And we're one of the few in the greenhouse space, who's actually, I think we're going to make it on a commercial scale on a really, really large scale.
Paul Zelizer 37:01
Great place to be going into theories be raised. So congratulations on the Thank you. Do you have any? Do you have any suggestions, we have a lot of, you know, about half of our audience or newer social entrepreneurs who haven't necessarily found product market fit and haven't yet dive too deeply into the unit economics, like any suggestion for somebody who's really passionate about their impact area is up and running, but is, you know, less refined? And where they are in that in that aspect of their business.
Eddy Badrina 37:38
Yeah, I mean, you mentioned something product market fit, which I think is the, I mean, that is the goal, when you first start out, yes, you want to have social impact, but there will be no impact. If you're not profitable, there will be no impact if you don't have long term sustainability as a company. So focus on product market fit first, it took us a year and a half to find product market fit to be super honest. And so it's not overnight, and you're going to have to try a lot of things. But the goal should be product market fit to try those things. And also to you know, from a startup perspective, you want to spend the least amount of money at the beginning, because that's when you're going to make the most mistakes. So in the in the free and cheap money era, people spent gobs of money chasing seven different directions to find product market fit, instead of being very focused and saying, Hey, we're only going to focus on X y&z Right. And that is borne out in our company, I can only speak from our experience, but I'll tell you, I have no problem focusing on lettuce and leafy greens, and some, some people may poopoo it and say it's commoditized and everyone's doing leafy greens. Well, no one's doing leafy greens like we are in terms of profitability. So I will absolutely dominate that market and be fine with that. You know, Amazon spent probably the first 810 years on books alone. They built up their infrastructure, they built up their distribution system, and then they started ramping up, they invested every single dollar they could back into r&d and back into the infrastructure. And that's when they started to expand so very rapidly after a lot of years of focus just on books. And so we're doing the same thing. So I would say Man, if you're an entrepreneur out there and you're struggling to find product market fit, don't give up. But also don't give up on product market fit before you expand to anything else.
Paul Zelizer 39:44
Great suggestions, Eddie. One of the things we talked about a before we hit record, we were talking about like you have these great greens right and are you private labeling them? In other words, are you selling them under the Eden green brand or Are you white labeling somebody else can whole foods like slap a whole food sticker or whatever company or grocery store or a local farmer who's had a rough season and says, Oh, here's some greens, and I'm gonna buy him and put them under my brand? That's a
Eddy Badrina 40:15
great question. So, because we focus so much on unit economics, and because our margins are so good, it allowed us to have a wider view of Channel Sales, right, it opened up more opportunities. So most of our competitors, because their margins are so thin, or because they're in the red, they had to make the choice, they were forced to make the choice of having their own retail brand. retail brand brings higher margins, but it also brings higher costs. And more importantly, it brings longer timeframe. Building a brand is one of the most capital efficient things that you can do your investing in something that's ethereal, right, and you don't snice there's nothing to hold on to until the brand is of a sufficient size. So you, you can't lend against a brand like you can't against a hard asset, or you can't against inventory, right. So if building a brand is time intensive and resource intensive, and you're a startup. And those are the two things that you have limited amounts of time and resources, if you can, why not bypass building a brand, or at least build it at a slower rate than you're building the other aspects of your business. And so that's what we did, we chose, because the margins were so good, we actually chose to bypass the brand route and go directly to wholesale and private label and white label. Again, most companies can't do that, because they don't have the margins at that level, we do. And so that's why we chose to chose to go that way. So you won't find our labels on any produce in the stores. But pretty soon you'll find them. And if you check on our website and get on our email list, you'll be notified when when we're in stores, or when we were able to announce that we're in stores under private labels. And that's what we want to be in I give the analogy of power plants. Probably you any of your listeners myself, we all know the distribution of our power, right to inherit Texas, we have power to choose. And you can choose constellation or Tsu or reliant or in the northeast, you got Con Ed and in California, you've got, I've got Pacific Gas, or whatever it is. Everyone knows the distribution, no one knows the name of their power plant. And that's all right. And so that's where that's how we want to be, we want to be as ubiquitous as power plants, to supply greens everywhere. And we're not necessarily care, we don't necessarily care about claiming the brand of the distribution source.
Paul Zelizer 43:07
It's very different than most of our guests on the show, like so different. And I love showcasing a wide variety of how people answer common questions in their business models and their positioning. And just Yeah, I just love how you think about it. And just want to say to our listeners, you might notice it's really different. And so please take in the why. And the amount of homework that you and your team have done at it like this is not a random decision, you really crunched the numbers and track things and experimented you said for like a year and a half to get to what was working for you. And I love the way you're thinking about it. And I'm sitting here, we published episode 271 This morning, and I'm trying to remember if anybody we've had in those other episodes have ever answered that question the way you just answered it and I don't think so. So that's that's a really interesting and I You're making me think and a really good way, how you how you approach that.
Eddy Badrina 44:13
I appreciate it. You know, it's a, it's a testament to my team to be as creative as possible, but to be as focused as possible, right. I come from a music background, I played piano growing up and I played guitar and I played saxophone I played in band for eight years. And the thing that I enjoyed the most was actually jazz. Well to an outside just you know your common listener of jazz, who doesn't have any music theory. It can sound a little bit all over the place, right? You get the lead trumpet guy Miles Davis are you know are John Coltrane and they're kind of all over the place, but somehow they seem to stay, you know on time and stay with the band. Well, if you know jazz, you know that there are specific constraints, jazz is actually very tightly constrained in the baseline in the time, you know, the, the timeframe, the rhythm, the melody, the harmony, right, it's very constrained. And that allows those constraints allow the soloist to go all around all he wants to, as long as he stays in the chord structure, he stays in the timeframe, right. And he stays in, in the key. And so there's a lot of creativity when you have constraints like that. And so I really challenged my team to be as creative as possible, but stay within the constraints of the business that we have outlined. And I think the product of that is thinking very critically, like you have perceived, thinking very critically, but very creatively about how we go about our business and how we're successful.
Paul Zelizer 46:03
at it, I can hang out and talk to you all day, you're making me think in a gray way. And I know you're busy, and our listeners are busy. If there was something you were hoping that we would get to today, and we haven't gotten to it yet, or there's something you want to leave our social entrepreneur founders with, as we start to say, Goodbye. What would that be?
Eddy Badrina 46:25
I think for your audience, I would say, expand your expand your thinking of what sustainable means. Right? Now sustainability means environmental sustainability, right? It means it just it has a narrow definition to it. And my challenge to the listeners, and to just focus in general is, hey, if you're environmentally sustainable, but you're not economically sustainable, and you're not there for the long term, are you really sustainable at all. So I would encourage the listeners as much as they think about sustainability and impact, to think about product market fit, and long term business sustainability of of, you know, the thing that they're trying to build.
Paul Zelizer 47:16
A thank you so much for being on the show today.
Eddy Badrina 47:18
Thanks for having me. I really, really appreciate it.
Paul Zelizer 47:22
So thanks, everybody, for listening. And in the shownotes, we'll put the in green site, a video, what does this actually look like a walkthrough, they have a great video on that. Hopefully, Edie will be able to find a link if somebody wanted to talk to you about your raise that's coming up and had some ideas for that. Please get a hold the very love to see this business grow practice labs and some of the other things we talked about. Before we go I just want to let you know that we love listener suggested topics and guests. If you have an idea for a show, please go to the AWARE printers website. And right there on our contact page. We have three simple guidelines, we try to be really transparent about the kinds of stories we like to tell and if you look at those, you have an idea and you say Check, check, check, please send it on it. So for now, I want to say thank you so much for listening. Please take really good care and these intense times. And thank you for all the positive impact that you're working for. In our