Rethink Real Estate. For Good.

Visionary

Amped Kitchens.

In 2015, Mott Smith pivoted his development focus towards commercial food prep and co-founded Amped Kitchens. At the time, Los Angeles’ food industry was expanding rapidly and he saw an opportunity to provide turnkey food production space to both new startups and existing food companies. It took two years, working with the L.A. County, the Department of Public Health, food business accelerator Food Centricity, and even Southern California Gas Co for Amped Kitchens to complete their first building, a 56,000 sf facility in the Lincoln Heights neighborhood of LA. With 54 pre-licensed wholesale kitchens for lease the building opened 50% pre-leased, and they quickly had a waiting list. Clients included brand name companies like Beyond Meat, Soylent, Blue Bottle Coffee and Applebee’s as well as startup companies who had outgrown their hourly, incubator and home kitchens.

Of note, this $18 million project was complex, involving seven financial partners, tax credits, loans and equity investments. They’ve opened a second building in Chicago since and have plans for more.

Mott founded his development company, Civic Enterprise (CE), with Brian Albert in 2003. CE’s goal was to specialize in projects that added value to emerging neighborhoods while leveraging innovative regulatory tools. Before embracing the role of developer, Mott served as acting director of planning at Los Angeles Unified School District, and was director of special projects there for four years. This followed his role as founding executive director of New Schools‐Better Neighborhoods. Mott also has taught ‘urban infill’ at USC, is a founding board member of the California Infill Builders Federation, and served on the boards of affordable housing developer Restore Neighborhoods L.A. and L.A. Más. He is also, wait for it, the former bassist of L.A. area rock band, All Day Sucker.

Read the podcast transcript here

Eve Picker: [00:00:13] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad. Rich or poor. Beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone. If you haven’t already, check out all of my podcasts at our website Rethinkrealestateforgood.co. Or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:10] Mott Smith is not a big box developer, at least not the big box that might spring to mind. His company, Amped Kitchens, rebuilds vacant warehouses into turnkey food production spaces. Think of it as an apartment building for commercial food producers, says Mott. This might sound straightforward to you, but it took two years working with the L.A. County, the Department of Public Health, Food Business Accelerator, Food Centricity and even Southern California Gas Company to get the first Amped Kitchen building off the ground. It opened 50 percent leased and quickly had a waiting list. Clients included brand name companies like Beyond Meat, Soylent, Blue Bottle Coffee and Applebee’s, as well as startup companies who have outgrown their hourly incubator and home kitchens. And this first facility was quickly followed by a second in Chicago. Mott’s plans are big despite the complexity of these projects. I’m fascinated by his approach and I’m sure you will be too. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast and go to Rethinkrealestateforgood.co, where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.

Eve: [00:02:44] Hello, Mott! I’m so happy to have you on the show. You sound like a developer after my own heart, and you’ve landed in such an interesting place.

Mott Smith: [00:02:54] Yeah, thank you for having me, Eve. It’s a pleasure to be here.

Eve: [00:02:58] So I’m most interested in your career pivots, which sound interesting and pretty nimble from planner to founder to teach to developer. What’s the common thread there?

Mott: [00:03:12] Well first of all, I mean, we can call them pivots, but the truth is I’m doing all of them simultaneously, even now. I think like you, I have always loved cities. There’s that, that magic of generativity that you get when you put a bunch of people together and you let them create stuff organically. And there’s this emergent quality that was just, it’s like the best, it’s the best thing. My wife is an ocean person in a nature person. And she describes the feeling she gets by looking at the ocean and this feeling of possibility and endlessness. And that’s exactly the feeling that I get when I’m looking at or better in a city, you know? And I knew from the earliest times that I can remember that I wanted to somehow be involved in bringing that life force to more places. I grew up in the suburbs of Washington, DC in the 80s, and at that time D.C. was not so lively a place. And I remember going with my family to visit places like New York and thinking, oh boy, like this is where it’s at. Like, we need this, we need to recreate that type of environment. And I just kind of became an informal like fanboy student of urbanism and, you know, took it from there. That was that’s how I got my start.

Eve: [00:04:43] That’s a lovely story. So, what’s risen to the top in 2020 / 2021?

Mott: [00:04:51] As well, so, you know, I guess now I still describe myself primarily as a real estate developer, I’m very fortunate that I get to teach in the Master Real Estate Development Program at USC, which I’ve been doing for, I think, the past 10 years or more. I also graduated from that program and that keeps me sharper. It introduces me to students who always have such great ideas and gives me an excuse to talk about things and reflect on things. But I’m also involved civically. You know, I’m on the Small Business Commission here in Los Angeles. I was a founding board member of a group in California called the Council of Infill Builders, which advocates for better and more sustainable infill policies. And so, all those things take up a lot of time. But my day job is I’m Co-Founder and CEO of a company called Amped Kitchens. And you know, we are much more than a real estate development company, but we are real estate development company. We buy properties and we build multi-tenant commercial kitchen complexes and we run them. And so, I feel a little bit more like a kind of, a regular business person than, I think, I did when I was doing primarily development or things that were more recognizable as development. But I’m still a developer.

Eve: [00:06:22] So Amped Kitchen sounds like a really interesting idea. I want to know, I suppose, first and foremost, why you started doing that.

Mott: [00:06:33] Sure. So, you’re going back to the, you know, to that big idea that the thing that gets me going is this, you know, the life force of cities and the creative force of cities. And when I moved to Los Angeles, which I did with my family in 1987, when I was a teenager, I had this really palpable sense of all of this potential here. So much creativity under the surface. So, you know, this huge immigrant population. People were flocking here in droves. And it, you know, there were parts of the city that really felt like a creative, generative city. But a lot of it felt like it was just kind of sputtering. And I was fascinated with why that was. Like what was it that allowed that fire to kind of catch in a place like New York, but not really go anywhere in a place like L.A.? And I, you know, I started diving deep into the city’s planning policies and redevelopment agency practices and the politics and all that stuff. And you know, if you ask the typical person that you’d meet, why is it that New York is great and L.A. doesn’t have that vibe and the typical person, their response to that question or really any question about the city as well? The planning in L.A. sucks. There’s just not enough planning. And what I slowly came to the conclusion of was that there was actually the opposite problem that there is way too much planning and that if if something tried to happen here, like somebody wanted to open a restaurant or somebody who wanted to convert a building from commercial use to residential use, they would get 25 percent of the way there and then something in the bureaucracy of the city would stop them. And I saw this happening again and again and again, where people had these just fantastic ideas and wonderful projects, and they would just continue to hit like a regulatory brick wall because the way we regulate development in L.A. and I think in a whole lot of the English-speaking world, to be honest. If what you’re doing doesn’t match what was, you know, what was written down in some plan, it doesn’t count and should probably be stopped. And unfortunately, you know, if people’s creativity, you know, kind of natural creativity doesn’t line up with what people wrote down on a plan 20 years ago, then it generally doesn’t happen or doesn’t happen without great difficulty. And so that was kind of the diagnosis that I came to. So, my business, which I co-founded with my business partner Brian Albert back in 2003, actually under the name Civic Enterprise, Civic Enterprise Development, which still exists. Our thing has always been doing projects that create the opportunity for that kind of creative generative flow to happen better. And that’s meant is doing new product types, generally innovative product types that increase the opportunities for people, particularly at the entry level of the economy, to kind of express themselves either commercially or residentially or whatever it might be. So we were the first development firm to bring a tracked, map to market under what was called the City of L.A.’s Small Lot Subdivision Ordinance. The Small Lot Ordinance.

Eve: [00:10:30] Oh yes, I know it.  Yes.

Mott: [00:10:32] We got town homes and we had a great time with that. And we at the time, in 2007, we brought the most affordable, unsubsidized, single family turnkey homes to market in the Silver Lake neighborhood out here. And so, that was really fun. We’ve done a lot of work with parking policy, actually, helping the city of West Hollywood, for instance, rewrite its parking code to turn what was your previously, you know, a 12-to-18-month process for new restaurants and bars to go through a zoning process that did little more than costs, you know, hundreds of thousands of dollars…

Eve: [00:11:14] Yes.

Mott: [00:11:15] Offer sacrifices to the zoning gods. It turned that into an over-the-counter process, which helps enliven countless storefronts that had been vacant on Santa Monica Boulevard and Melrose Avenue and Sunset Boulevard, et cetera. We got into the food business because when the last recession hit, we were very lucky that we’d gotten out of our last deal with our, you know, with our shirts. And so, we had a little bit of cash and were excited at all the opportunities to buy up urban properties at bargain prices. And then after about two years of trying to do that, we realized that even in the depths of recession, there were, really, no great urban properties that we could find at bargain prices. The recession seemed to have the effect of causing the kind of the bad stuff to lose all its value, but a lot of the good stuff was still highly sought over and, in some cases, even more so. We were fighting with companies like Lennar and KB Home and DR Horton over these tiny little properties like 12- and 14-unit properties. It was very, very strange time. And so, Brian and I were having one, we’d go out to dinner and, you know, brainstorm about what was next. And we were at a friend’s restaurant in Hollywood. He came over and sat with us and started complaining about how he knows all these great bakers. But he couldn’t for the life of him, get bread for his restaurant because none of them could get their wholesale permits. None of them could deal with what was at the time, like a one to two year and two to $30,0000 process to go from being a just a regular commercial baker who sells at farmer’s markets to one who can legally sell to restaurants. And the light bulb went off and we said, All right, well, if there are people out there trying to do that business and they’re hitting a one to two year, two to $30,0000 regulatory wall, that’s something that we would like to address through development. And that’s where Amped Kitchens was born.

Eve: [00:13:18] Interesting. You work on projects that is just absolute brain damage for other people.

Mott: [00:13:25] That’s our value proposition is we’ll take the brain damage, so you don’t have to.

Eve: [00:13:28] Yes, I like that. It’s it sounds like a lot of fun to me, too. So, how does Amped Kitchens work? What does Amped Kitchen look like?

Mott: [00:13:40] Yeah, yeah. Ok. So, we’ve got three locations now. Two in Los Angeles and one that we recently opened in Chicago. We’re actually having our grand opening celebration on October 14th, which we’re very excited about. So, there are 50 to 60 plus kitchens in a building.

Eve: [00:13:59] Wow.

Mott: [00:13:59] That we’ve engineered. We have finished up to the point of having utilities, connections for equipment. They’ve been pre inspected by the local health department and we’ve got an operating team on site that makes sure the facility stays clean and sanitary to the highest industry standards and that we’ve got logistics support. You know, our team drives forklifts and things like that. And when you sign a lease with us and we operate very much like an apartment building does for residential uses. You sign a one-year lease, you bring your equipment in, your sign goes on your door. And instead of spending one to two years in many hundreds of thousands of dollars getting ready to get your permits, you can start selling five-dollar loaves of bread. Generally speaking, within a matter of weeks, you have your permits and you’re in a very supportive, very communal, vibrant environment where you can run your food business and get lots of support. So, when you get a life changing order from Whole Foods for 10,000 units next month, you can say yes to that without having to worry that there’s going to be a problem.

Eve: [00:15:17] So it’s a little bit of an incubator as well.

Mott: [00:15:20] You know, it’s funny. We bristle at the idea of calling it an incubator. And that’s for, it’s for three reasons primarily. One is it doesn’t accurately describe our tenant base. Because we’ve got everything from local mom and pops to very well established corporations who are just looking for innovation space, or, you know, for instance, the Beyond Burger was piloted out of one of our facilities for about a year, and it was sold at every Whole Foods in the nation. And Beyond Meat was a public company at the time with its own major manufacturing resources. But they, when you’re launching a new product like that going from the so-called benchtop in the test kitchen or the lab to the scale of a factory, that journey is a very fraught one, and nothing ever comes off the production line at a factory tasting or looking or feeling like it did in the test kitchen.

Eve: [00:16:20] Yeah.

Mott: [00:16:21] And so if you’re going to be spending millions of dollars to outfit a production line, you want to have an excellent idea that you’ve nailed your formula and process.

Eve: [00:16:28] Interesting.

Mott: [00:16:28] And so companies like Beyond Meat come to us so they can nail the formula and process in an environment where the cost of iteration is very, very low by comparison. So again, I wouldn’t call this an incubator, one because of that, and two, because it’s just been our experience that a lot of incubators have a kind of event evangelism about them.

Eve: [00:16:50] Yes, I know what you mean. Incubation seems to be a rapidly growing industry, doesn’t it?

Mott: [00:16:56] Yeah. And there’s a remedial quality to it, also. Like, you know, you come learn from us, you can one day be like the big boys or big girls. And I’ve gotten, I don’t think I have any of the answers. I just want to provide an environment that’s really supportive. And if you’ve got the answers or if you can find the answers, it’s not going to be, you’re not going to hit a brick wall of regulation, you’re not going to hit a brick wall of facilities capitalization. You’re going to have lots of opportunity in front of you and lots of support. But informal support.

Eve: [00:17:31] So maybe let’s call it a community rather than an incubator.

Mott: [00:17:34] Yeah. Sure.

Eve: [00:17:34] So do you do things that sort of encourage community or does it happen naturally?

Mott: [00:17:40] Yeah, it’s a great question. We do. I mean, we’ve, you know, there’s an online platform kind of like a Slack. It’s not quite a Slack, but people use it to ask questions of each other, and it’s really practical stuff. It’s exactly the sort of stuff that you need to develop a networked business community. Like, for instance, when we started out, our first tenant wanted their organic certification. And most of the agencies out there that do certification for organic prefer to work with, you know, big multibillion dollar companies. And so, they couldn’t find somebody who was willing to work with little old them. They put up a post on our online platform and somebody said, oh yeah, I’ve got a friend who does this and they love working with small companies.

Eve: [00:18:23] Oh, that’s great. That’s perfect.

Mott: [00:18:25] And now they’re doing everybody in the building. Same thing with kosher and halal, you know, having the people who come by and certify them. People start to know the buildings. They know how we operate, and it just creates that. There’s that goodwill that comes from that community that you’re describing, Eve.

Eve: [00:18:40] Yeah, that’s really great. So, these projects you’ve got like 50 or 60 kitchens in three locations now, that’s a ton of tenants.

Mott: [00:18:49] Yep.

Eve: [00:18:50] These projects can’t be inexpensive to build. Are they ground up? Or are they renovations?

Mott: [00:18:57] So the three that we’ve done and, right now I think we’ve got 180 kitchens total, the three of them have been renovations. They’ve been adaptive reuses of existing warehouse structures.

Eve: [00:19:10] So yet more impact.

Mott: [00:19:13] Yeah, yeah. And we love the adaptive reuse because we love reusing the old buildings. There’s generally a zoning advantage to that because if we were to build ground up, we could never comply with any city’s parking requirements. It’s just, you know, which are totally absurd and frankly anti-business. But in an ideal world, we would build ground up for our next project in a city that doesn’t have strict parking requirements.

Eve: [00:19:40] Really?

Mott: [00:19:40] Just lay all the lessons learned. Well, because it’s such a building systems intensive development…

Eve: [00:19:48] Yes.

Mott: [00:19:48] That kind of weaving your air conditioning system and your plumbing, and all that, onto an existing platform could be very challenging.

Eve: [00:20:00] Interesting, and do you have the next city planned? It’s going to be a big metropolis?

Mott: [00:20:06] You know, we used to think that we had to be in really foodie places. What we’ve discovered is that a lot of our tenants are really just, you know, workaday food companies that are feeding people in their communities. And I think any metropolis of sufficient size needs at least one or two or three of these.

Eve: [00:20:28] Interesting.

Mott: [00:20:28] So yeah, the slate is pretty open.

Eve: [00:20:33] Ok, so I mean, how much does it cost to build compared to a residential building or commercial building? And how do you finance that? Because, as you said, this is an innovative project. Banks won’t have seen these before.

Mott: [00:20:48] Yeah.

Eve: [00:20:48] How do you tackle all of that? You know?

Mott: [00:20:51] Yeah, it’s funny. When we had our first anniversary celebration at our first location in the Lincoln Heights neighborhood of L.A., one of our financing sources, a company called Genesis LA, it’s great, my favorite bank.

Eve: [00:21:04] That’s right. They work with RNLA as well, don’t they?

Mott: [00:21:08] They sure do.

Eve: [00:21:09] I think, yeah, you know, we I did a crowdfunding project with them on Small Change.

Mott: [00:21:15] Oh nice.

Eve: [00:21:16] Oh yes.

Mott: [00:21:16] We’ll have to talk more about that.

Eve: [00:21:18] Yeah, yeah.

Mott: [00:21:19] Yeah, right. I mean, I am on the board of RNLA and Genesis LA has done a lot of great work. And really, they are my favorite non-profit bank. And I say that with great love for many non-profit banks. But when we were looking for financing for our very first deal, they were the first ones to say yes to us. They gave us a very small, relative to our need approval. But they did it strategically, saying that when they said yes to us, that would be the signal for other banks that they can say yes as well, and it completely worked out that way. But the joke that we had in our first anniversary celebration was that we were, you know, our pitch to Genesis was that we were two developers without deep balance sheets, building a project, without comps for tenants, without credit. And they said, yes.

Eve: [00:22:11] Isn’t that amazing?

Mott: [00:22:12] Yeah. Yeah.

Eve: [00:22:13] I think I’m in love with Genesis LA.

Mott: [00:22:18] Well deserved.

Eve: [00:22:18] Because, you know, think about all the rest of the money floating around this country that really doesn’t think that way. You know.

Mott: [00:22:25] Well yeah, and you know, when we used funds, is what we use new markets, tax credits for all of our deals so far.

Eve: [00:22:30] Mm hmm.

Mott: [00:22:31] And one of the funds that we pulled from was one of these funds established to address food deserts. And we feel that our project is legitimately addressing food deserts through a variety of means. But it’s funny that a lot of, you know, the funds like this are often established with relatively lofty goals. And then you look at what they’re actually putting their money into and quite often it’s, you know, paying for a corporate supermarket that was going to locate in the neighborhood anyway and just giving a more favorable financing. And again, one of the things I absolutely love about Genesis is that, is not how they do business, they really look to make an impact and change. Move the Overton window, I guess, of what’s acceptable in a way that really sticks.

Eve: [00:23:21] Yeah, that’s really fabulous. So back to the cost per square foot. What does that look like in a building with, you know, 60 kitchens? It’s a lot of plumbing runs, right?

Mott: [00:23:32] Yeah, you know. So compared to what residential is costing these days, I don’t know that it’s terribly different. I mean, I would say that to take an existing structure and convert it to our use is going to be somewhere in the 250 to 275 dollars a square foot range.

Eve: [00:23:49] Okay, so that’s pretty similar.

Mott: [00:23:51] Yeah.

Eve: [00:23:53] The kitchens. How big of the kitchens generally? Or are they different sizes?

Mott: [00:23:56] Yeah, they range from as small as 150 feet, all the way up to 4,000 feet.

Eve: [00:24:02] Okay. Interesting. So, I have to ask this question. How has the pandemic affected Amped Kitchens? What does the new kitchen economy look like?

Mott: [00:24:17] Well. Yeah, so okay, so there is an explosion now of what are known as ghost kitchens or dark kitchens some people call them.

Eve: [00:24:27] Um hmm.

Mott: [00:24:28] This is this idea of a building full of virtual restaurants, where the delivery apps like Uber Eats and DoorDash and others can come and grab multiple orders from multiple brands and ship them off. And in fact, some of your listeners will probably know that Travis Kalanick, the founder of Uber, left Uber and started a company called Cloud Kitchens, which is specifically geared towards making these complexes. And he based his first building on, actually, our first building. Sort of a scaled down version of it. So, the pandemic has accelerated what was already a boom in that, and that idea of ghost kitchens. And I’ll be honest with you, Eve, that I’m not very long on the idea of ghost kitchens. You know, our complexes are really production oriented. They’re not delivery oriented. Although we do have some tenants, who do that. Most of our tenants are doing, you know, they’re selling to customers all over the country, all over the world, as opposed to people within a 10-minute drive. And the theory behind cloud kitchens was that, you know, one day everybody is going to be ordering food from their homes and, you know, it’s good to kind of aggregate these resources. And again, during the pandemic, that actually really started to happen. And I think it created a bit of a bubble in the cloud kitchen, in the cloud kitchen where there’s so much product coming online.

Eve: [00:25:59] Uh hmm.

Mott: [00:25:59] But what people are starting to discover is that cloud kitchens or ghost kitchens are really just retail locations, and there’s nothing magic about them. The fact that they don’t have seats or a front end for customers doesn’t make them, it doesn’t make them not retail. They still have to be close to the consumers geographically. And the truth is, if you’re going to be that close to consumers geographically, you probably should have a place for the customers to come, sit down and enjoy themselves and get an experience also.

Eve: [00:26:30] Yeah.

Mott: [00:26:30] So I think we’re going to see a bit of a shakeout in the industry where you know, the Domino’s pizzas of 2021, as it were, will survive and a lot of others will probably move into more traditional brick and mortar that might have certain optimizations for delivery, but it won’t be exclusive delivery.

Eve: [00:26:49] I certainly hope so.

Mott: [00:26:51] So that was a very long way to say that. There’s, yeah, so there’s been a boom. I think it’s going to contract a little bit. That was a very long answer.

Eve: [00:26:58] So it doesn’t sound like it’s really impacted your Amped Kitchens either way.

Mott: [00:27:07] Yeah, I mean, it has, I guess, a little bit. Probably positively from, you know, as a property owner perspective. About a year ago was the peak of uncertainty, I would say, and we did lose some occupancy. A lot of our tenants were struggling just because of the uncertainty about where we were going to end up.

Eve: [00:27:31] Um hmm.

Mott: [00:27:31] A certain portion of our tenants are commissaries that service retail restaurant locations. Like, you know, maybe you’ve got 10 locations in L.A. and you want one place where you cook your potatoes, you know, and ship them out every morning. So, we’ve got. We have a portion of tenants who do that. And while the restaurants were shut down, those tenants were struggling, but they’ve all bounced back. We’ve had a huge boom of meal delivery companies, people that’ll give you a subscription or you’ll buy a subscription for weekly delivery of chef driven meals. Huge boom in that. And so, given the fact that food has remained an affordable luxury that people, I think, need in terms of being able to kind of treat themselves more than ever, and the fact that meal delivery is really booming, those two things have been great for our tenants.

Eve: [00:28:27] So are most of your efforts focused on this or do you have any other projects in the works that you can talk about?

Mott: [00:28:33] My business world is exclusively focused on this, but I have very active civic life as well and have been active in the movement to end parking requirements universally in California and some efforts to make housing development more affordable and more, you know, increase the supply of housing in places like Los Angeles. I’m very active in the civic world with respect to those two issues.

Eve: [00:29:06] So, and are there current trends in real estate development that you’re following that you think, sort of, give hope in other ways?

Mott: [00:29:14] Yeah, for sure. I think that new product types and new regulatory opportunities, I mean, this is what we based our business on was what you might call regulatory innovation, where you get something legalized that hasn’t been allowed recently and go build it and be the first one to do it. That’s been our business model for since we started in 2003. And I would say that strategy still is a very rich field to mine. And there, you know, I think people who’ve got somewhat contrarian insights into various kind of micro markets in big cities are doing great and will continue to do great. You know, people who want to build, say, parking free or parking light projects in San Diego, let’s say, where they’ve for the past two years have been legal near transit. That’s starting to happen with great success, you know, for people who want to live car light or car free lifestyles. There are, you know, with the shakeout in retail, I think there is going to be a lot of interesting stuff to happen in Los Angeles, for example, the, for the next one to two years, all of the rules that constrain converting retail space to restaurant space are, or many of the rules are, being suspended. And so again, what would have been a one to two year, very expensive process to turn a shuttered retail store into a neighborhood cafe is right now basically an over-the-counter process. And so, I think they’re going to be lots of opportunities here for people to help neighborhoods rapidly respond and kind of reposition their resources in a way that’s good urbanistically and good business wise.

Eve: [00:31:16] So my last and favorite question is what’s your big, hairy, audacious goal?

Mott: [00:31:23] I think I’ve already hinted or more than hinted at them…

Eve: [00:31:27] But like a hundred kitchens all over the country, you’re going to take over the world like…

Mott: [00:31:35] Yeah, I mean, ah, I’ll give you two goals. My big, hairy, audacious Amped Kitchen’s goal is, within the next five years we’d love to have one to two facilities in the top 15 metros in the U.S. and have a, you know, a robust network of management resources that make them by far the best places to launch a new product or grow a brand. That’s my big, hairy, audacious business goal. And then my big, hairy, audacious social civic goal is the one that I’ve already mentioned, which is, I’d like to see parking requirements eliminated everywhere. It’s happening city by city. Recently in Minneapolis and, also, St. Paul. I’d like to see it happening everywhere to, kind of, unleash some of the potential that is sitting there waiting to happen in cities across the country.

Eve: [00:32:36] I’m with you on that. Well, I can’t wait to see what you accomplish. I have a feeling you’ll get pretty far.

Mott: [00:32:43] From your mouth to God’s ears, as my grandmother would have said.

Eve: [00:32:47] Thank you very much. I enjoyed the conversation.

Mott: [00:32:50] Me too, Eve. Thanks for having me and keep doing what you’re doing. I really appreciate it.

Eve: [00:33:12] You can find out more about this episode or others you might have missed on the show notes page at our website, Rethinkrealestateforgood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Mott Smith, Amped Kitchens

3D printed houses.

3D printing is the construction of a three-dimensional object from a digital model, and it’s now being used in a multitude of applications — from aircraft components to running shoes, cars to orthopaedic implants and prosthetic limbs. And one of the latest to come to market is houses. You can now live in a home printed out by a computer.

There are some big advantages to 3D printed houses. These include:

  • Environmental benefits. When you print a house there is very little material waste. Prefabrication also reduces building site waste as well as transportation needs. This will lessen the heavy carbon footprint that the construction industry.
  • Faster construction. According to McKinsey, the construction industry has struggled to improve productivity over the past 20 years and has grown at a third of the rate of the world economy. 3D printing is fast and could double the speed of production.
  • Cost savings. Automation can bring huge cost savings by reducing labor needs on a building site and speeding up production. The construction industry has been slower to digitize than most other trades and is also facing shortages of skilled labor.

3D printed houses are popping up all over the world – in Malawi, Mexico, The Netherlands, Canada, Germany, Dubai, Saudi Arabia, India to name a few. And NASA is exploring 3D printing for use on the moon and Mars.

In California, Mighty Buildings, co-founded by Sam Ruben, is collaborating with Palari Homes to build a solar-powered community of 3D printed houses. Components such as walls, ceilings and eaves are printed from a composite paste, then cured and hardened with ultraviolet light. The pieces are then put together on a prepared foundation using simple tools. Each home can be erected in less than 24 hours and may cost 40 percent less than conventional homes. Mighty Buildings offers printed studio units from as little as $115,000 and a 65-square-meter home for $187,250. Listen in to my conversation with Sam Ruben to hear about the progress Mighty Buildings is making.

3D printed houses are just getting started. It will be interesting to see if this idea takes hold and delivers some of the desired outcomes.

Images courtesy of Mighty Buildings

Greater mass.

Mass timber is a catch-all name for a range of engineered wood products. Smaller, non-structural pieces of wood are glued together and engineered in such a way that together they become much larger and structural elements. Mass timber has many attributes. Speed of construction is a major benefit. Panels are pre-manufactured and pre-cut before delivery. These panels can be fitted and screwed into place by a small crew. An entire floor of a large building might be made up of only five or six panels. And an 8-storey building might be constructed in as little as two weeks.

A familiar mass timber product is Glued Laminated Timber (glulam), made of layers of dimensional lumber (lumber that is cut to standardized width and depth) bonded together with durable, moisture-resistant glue. These days the most frequently used mass timber product in construction is cross-laminated timber (CLT). This product, which looks like a giant butcher block, is made using dimensional lumber, cross thatched with glue on a giant press and placed under extreme pressure. CLT panels can be as large as 12 x 40’ and 12 inches thick. They are structurally stronger and lighter than both steel and concrete and have been widely adopted in Europe, East Asia and Japan. Other variations include Dowel Laminated Timber (DLT) which uses wooden dowels to connect boards together, and Nail Laminated Timber (NLT) where the boards are nailed together.

The biggest drawback of these technologies is that they use a lot of wood, making them susceptible to market fluctuations. Just recently, prices soared by almost 200%.

New mass timber products are in development and Scott Ehlert’s cassette system is one of them. Scott, co-founder of Fabric Workshop, is designing a proprietary hollow core mass timber plate column and wall system that uses 50 percent less wood fibre and will cost 10 – 35 percent less overall than a CLT structure. The box-like panels consist of two outer layers with a hollow core and an internal membrane to retain structural integrity. The advantage of the cavity is that what would normally be exposed in a CLT building – mechanical, electrical, and plumbing systems – can be integrated right into the panels. Insulation, acoustic, seismic and fire safety materials can also be added.

Fabric Workshop is based in California and while it hopes its product will help address the state’s housing affordability challenges, the company also sees an opportunity to impact California’s wildfire crisis. In 2020 the state’s fire season was 75 days longer than just 20 years before. Removing excess unnatural growth out of forests would help to reduce the severity of those fires. Right now, those small and medium diameter trees have no value but Fabric Workshop wants to create a market demand by using them in advanced cassette-based plate systems. Instead of dimensional lumber, they are focusing on another sub-product of mass timber known as laminated veneer lumber, or mass plywood, which is made from peeled timber sheets glued together.

Scott hopes that forestry industries, which have reduced by 70 percent in the last 45 years, will return to California with a much greater technological, environmental, and ecological focus. Timber is an environmentally friendly building product which offsets the carbon and environmental impacts of concrete and steel. Sourcing it locally and preventing wildfires are the icing on the cake.

Image from PxHere

Spacehive.

Chris Gourlay is founder of Spacehive, the world’s first crowdfunding platform for projects that improve the civic environment. Spacehive aids local fundraising efforts by matching them with funding sources from civic councils, companies and foundations. Over 45 of them.

What makes Spacehive so unique is that it can positively impact a community far larger than just those who donate on the platform. It has been used by community groups, charities, schools and local businesses, mayors, corporations and foundations – all to collaboratively improve local places, both big and small, momentary and lasting. It has the highest campaign success rate of any crowdfunding platform in the UK. And since the pandemic, the platform has seen a 300% increase in people helping to fund improvements to their local area.

Chris cut his teeth as a journalist at The Sunday Times where he led on coverage of Boris Johnson’s mayoralty and the architecture and planning brief. He also ran international investigations for the award-winning Insight unit. Chris has been interviewed by many TV and radio programmes, newspapers and magazines – Sky News, BBC’s Today programme, WIRED, The New Scientist, The Guardian and more – about the power of technology to transform communities.

Insights and Inspirations

  • 10 years into building his unique civic platform, Chris is not nearly finished.
  • Technology can make everyone a civic change-maker.
  • With communities in the drivers seat, locals can shape their own civic environment, making everyone happy, proud and prosperous.
  • What’s in the name SpaceHive? Take civic and community SPACE, add a good dose of collective effort (like a bee HIVE) enhance it with technology and you have the ability for people to shape their own environments.
Read the podcast transcript here

Eve Picker: [00:00:06] Hi there. Thanks for joining me on Re-Think Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo, in order to build better for everyone. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co or you can find them at your favorite podcast station. You’ll find lot’s worth listening to, I’m sure.

Eve: [00:00:41] Today, I’m talking with Chris Gourlay, the founder of Spacehive. Chris launched Spacehive, a civic crowdfunding platform, almost a decade ago. It came to him through his work as a journalist where he focused on architecture and planning. He was frustrated by the lack of investment and creativity in public spaces, and so he took a very bold step and launched Spacehive, a crowdfunding platform giving communities the power to shape their own civic environment. And he has succeeded. Spacehive is a testament to Chris’s passion and his vision. The platform claims to have the highest campaign success rate of any crowdfunding platform in the U.K. Hundreds of place-based projects have been created throughout the country, including urban parks, community centers and public gathering spaces. Restorations of historic buildings, collective artist and entrepreneurial hubs. Parking space makeovers. Public WiFi and more. I love what Chris has created, and so will you. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate to learn about special opportunities for my friends and followers and subscribe if you can. Hello, Chris, I’m such a fan of yours and so happy to get a chance to talk to you today.

Chris Gourlay: [00:02:25] Hey, Eve, great to speak to you again, thank you and likewise been excited to follow what you’ve been doing with Small Change over the years.

Eve: [00:02:33] I think you might have been my inspiration. Some years ago, I remember when you launched Spacehive, how fabulous I thought it was. So, tell us a little bit about Spacehive, which I love.

Chris: [00:02:48] Well, so you know, Spacehive is a crowdfunding platform for projects that improve local places, the civic environment. So this is our streets or green spaces, the community buildings we all share, heritage, sports facilities, all the stuff that kind of makes up our public realm, if you like. And what Spacehive does is to provide a springboard for local people who’ve got ideas for improving that area, to be able to start projects and then attract the money they need to pay for them from friends and neighbors, but also local businesses, the local mayor, the municipality government, big brands, corporations, developers all through the same portal so that these things can get done. And the idea is it makes it much easier for a much wider range of people to be involved in improving that area and local places and local communities benefit as a result.

Eve: [00:03:48] So you started life as a journalist, right? So, I’m wondering how someone with a journalism degree ends up at the helm of Spacehive and I’d love you to take me on the journey.

Chris: [00:04:02] Yeah, sure. Well, I was a journalist, as you say, for four years before I started Spacehive. I worked at the Sunday Times newspaper in London. I covered the architecture and planning beat there and was also the London correspondent. So, I worked with the then mayor, Boris Johnson, who’s actually now prime minister, on various different stories. And that experience at that time there did help to shape my idea. I got to know how local government and civic improvement works with property developer’s eyes and planner’s eyes. But to be honest with you, the kernel of the idea came about 10, 20 years ago. On a trip to Cuba, I met a guy there in Havana, were chatting in the city about his neighborhood, sitting in a park on this little bench, and he was this amazing guy, super enthusiastic about his community and full of ideas for improving things. I mean, Cuba, as you may know, is a place where things the pace of change can be slow, shall we say. And and there’s a lot of beauty and elegance in the built environment because of that. But its civic involvement is not, if you like, the fastest paced in the world. And he was like lamenting various kind of, you know, broken benches, including the one we were sitting on and the state of the park and this ice cream parlor. He wanted to improve nearby. And I remember thinking, wow, this guy is basically a social entrepreneur. He’s full of ideas, and he talked about how difficult it was for him to change things. You know, you have to go through the centralized structure, the party, the state. And it was a pretty sclerotic system and basically not much happened as a result. And I remember thinking at the time it just sort of started sparked this idea, this image in my head of people like him and this idea that in communities all around the world, really, there are people like him, like you and me, if you care about the area and you’ve got ideas for improving things. It struck me that he and others would be willing to to give time and money to make an improvement happen if it was an easy way to do that. But here was the civic environment, which was inadvertently blocking out his ideas and actually blocking out capital because there’s just no way for people to be able to propose a project. There’s no way for people to be able to chip in to make a thing happen easily. And the result was that not much did happen. And of course, if you think about places like the U.K., the United States is not Cuba. You’ve got a thriving civil society. It’s a very different, very different system. But actually, fundamentally when it comes to the civic environment, similar. You know, there’s this system that is very top down and you really, traditionally have to be sort of a municipality or property developer to be able to change things or a seasoned community development professional. So at that time, I didn’t really do much with that thought, but I just it sort of something bothered me about this. It felt like there was this huge untapped opportunity or this creativity, all this energy and goodwill amongst people like him to be able to improve places and the system that just didn’t allow it to happen and unintentionally so. And it was years later when I was a journalist and I think got to know how all this space works better. And an opportunity came up because we had the recession off the back of the 2007 crash in the U.K. and all over the world. And at that point it became pretty clear that if you like the business model, the financial model for the civic environment was in trouble. The ways that municipalities have relied on to pay for playgrounds and high street and street markets, you know, green spaces and so on. Looked like it was going to be in long term decline budgets and people were scratching their heads as to how they’re going to make things work with the crisis. Funding crises which took years to play out and at the same time, everyone was talking about localism, the idea that you should push power down as far as possible to community level. This was a sort of fundamentally good thing for society, but they didn’t really know how a lot of the time. And then we had the rise of Kickstarter in the U.S., and that was the, sort of, first really popular modern crowdfunding platform.

Eve: [00:08:16] Um hmm.

Chris: [00:08:17] And it inspired me because, you know, here was this place where people with entrepreneurial ideas could host projects and kind of act as a springboard for their projects to get off the ground. They could attract capital across the internet, cobbled together all these little contributions to make that project happen and to get ahead. And I remember thinking, is this vehicle or something like it? What we need in the civic environment? And does that solve the Cuba problem? Because I could see how you could have local people who’ve got ideas, you know, if there was a way that they could put forward a project and we knew that that project was viable, we knew it could be delivered and local communities could show their support for it by kind of rallying behind it, pledging small amounts en masse. The sight of that, the spectacle of that of everybody getting behind this idea to start the street market or create a new community garden or whatever it is they wanted to do, that would be so powerful because you’d have these time limited campaigns. It had to happen. Otherwise, it will fall apart. And if you were a mayor or property developer or big supermarket with a bunch of customers in your community and you were looking at something like this and said, Well, here’s this amazing project. People are clearly passionate about it. They’re behind it. They’re actually voting for it with their wallets, and we’ve got an opportunity to make this thing happen. I sort of felt to me that it would be sort of politically irresistible to get behind that if it was affordable for people to do that. And if you could combine those two things channelling the kind of energy of the community behind an idea that somebody wanted was a good idea and a viable, deliverable idea. The money that was needed to actually pay for it, to go ahead. And then the sort of pressure that that created on the state and other kind of institutional players to get behind it, that you could actually make that happen. And on the surface of it, it would look like Kickstarter, you know, crowdfunding platform like any other. But underneath you’d need complex sort of machinery because the civic environment is complex and the experiences that people face are very challenging when it comes to doing projects. So that’s sort of became the exam question for me. And it took many years of working with very lucky to work with people like the mayor of London and other sort of stakeholders in this space to sort of figure out how to make that actually work, you know, how to create that spectacle and make it scalable and durable. And so that was that became our focus with Spacehive to the early years is testing and validating and iteratively building towards that vision.

Eve: [00:10:50] So when did you launch? Was it 2010? Is that right?

Chris: [00:10:54] 2012

Eve: [00:10:55] So and how does it work? Like, tell us a little bit about, you know, who comes to the platform and how much they’re generally raise. And I mean, are you regulated? All of those questions.

Chris: [00:11:10] Yeah, it’s not a regulated space. We’re not dealing in repayable finance. So legally speaking, people are making donations, whether they’re pledging £10 or £10,000 towards a project. They didn’t get their money back. They didn’t get a share. What they get is the playground or the high street improvement or the street market or whatever it is. So it’s a different place. Equity crowdfunding, lending, lending platforms. Our typical project is £11,000. So just over $15,000. And you get a very broad range of project types. I mean, the most common category is green space, but not by a huge margin. You know, we’ve had people restoring lidos, you know, old heritage lidos that the community would love to bring them back to life. People can go out and swim and hang out at Community Café. We’ve had people painting murals and spotting opportunities to convert old disused railway lines into public gardens or turning toilet blocks into community restaurants or starting giant water slides down a steep high street. And can, you know, get their swimming costume out and slip down in front of all the shoppers. Or launching festivals, pedestrianizing streets. You know, in some cases, repainting entire high streets give them a lick of paint, a new lease of life, amazing natural nature reserve projects, you know, creating new habitats for wildlife and so on. And then economic type projects, you know, improving trading conditions so street markets can thrive. Or we have an amazing project up north. In York, there is an old medieval town where the business community got together and put snow cannon on top of the roofs and pumped fake snow into the Tudor streets below so that shoppers could pan around and have the authentic white Christmas experience.

Eve: [00:13:04] That’s lovely.

Chris: [00:13:05] All sorts of, you know, weird and wonderful and creative ideas. And I think the bottom line with all of it is, these are things. These are ideas buying for communities. They are generally distinctive to the local area and kind of reflect the character of the community. And you know, they have a wide range of benefits from environmental improvements to the place that they’re delivered in, but also these, sort of, social impacts, you know, making people healthier, happier, less lonely and sort of giving them people a stronger sense of belonging and ownership in their community.

Eve: [00:13:39] Yeah, I think that’s probably the big one, right? That people can point at something and say, I help make that happen. I think that really matters to people.

Chris: [00:13:47] It does. It does. And it’s, you know, you’re right, and it’s an unusual feeling, actually in the kind of civic or region space. Because if you think about like, you know, the traditional, shall we say, ways of the opportunities for the public to be involved in civic change, regeneration, you know, it can be it can feel pretty arm’s length. Maybe you get to respond to a consultation or come and vote on a design for a new building or whatever it happens to be. But generally, I don’t think people feel that they have a hugely powerful voice. And also, things take ages usually to change.

Eve: [00:14:24] They really do, don’t they?

Chris: [00:14:25] That was a huge thing for me was just the ages thing. The fact everyone takes super long time. It’s just not in the public interest. And, you know, Spacehive is not a panacea for that. But there’s a tier of activity that we’ve got relatively small-scale projects, you know, $15,000 up to about $750,000 worth of project where you can get stuff done much faster. And I think for communities, whether you’re creating a project or backing it, the experience is exciting because, you know, you vote for this thing with your wallet, doesn’t matter how much you put towards it. And then a few weeks later, a month later, you get the thing. You know that tangible improvement. It is a visceral experience, actually, and very, very different to your normal involvement in the region space.

Eve: [00:15:09] Well, I think you’ve been pretty ahead of the time because, you know, top-down planning has been the way we’ve been doing it. And so over the last over the last year or two, I’ve been hearing more and more people talking about sort of bottom up community planning and in fact, platforms like Spacehive have been encouraging that to happen for a long time, so it’s interesting to watch. Yeah, yeah, but how does it actually work? Like so they raised 15,000. You are not for profit or for profit?

Chris: [00:15:44] Yeah, well, a for profit company. We are in social business. But yeah, the journey is that… So, the usual route is somebody in a community will generally spot an offer of funding from one of our partners. So we have integrated into the platform lots of different funds, matching funds from different municipalities, foundations and companies. And so say, you say you live in Leicester, where we have the mayor of Leicester offering money to support local crowdfunding campaigns and space from time to time. You would probably hear about a call for new ideas from the mayor, and the mayor would say, Look, I’m offering cash to help people be successful with their local crowdfunding campaigns in Spacehive, and I’d love you to create a project and I think it’s going to help to make the city better. I’m going to back it alongside the crowd. And so people would often come to a kind of online workshop, then to find out a bit more about what the fund is looking for, but also how civic crowdfunding works. And then they come to the platform. They create a project page, which obviously explains what their idea is. They want to spruce up a local playground or paint a mural, or maybe create a statue to somebody that they admire. And what we then do is we match that project based on data like its geography, its projected impact and so on to relevant funds. So you’re likely to get matched to the mayor’s fund, which you heard about, but also others. And then you have an opportunity to pitch your project ideas simultaneously to your community through the platform, but also through to these institutional funds. And sometimes these institutional funds want to know a bit more about your project. They want to know about your financial records or a bit more detail about the impact you think it will have, so you can answer those questions and provide documentation through the platform. We have technology that prevents you having to repeat yourself and shares impact data across different funders. This sort of thing, the various ways in which we try and streamline the experience for people to make it easier.

Eve: [00:17:46] Wow.

Chris: [00:17:47] And when you’re in need of help, you can put out a wish list of things you want to help with, perhaps skills from people who might want to join your team or in-kind contributions. And that helps you to shape your project plan. And at some point they’re going to. People are going to feel ready, and they will then submit their project for verification. We’ve got some experts to look over the project, make sure that it feels deliverable. And of course, that check is crucial because depending on what you’re trying to do, turn a railway line into a park or improve a playground or paint a mural, the kind of permissions you might need to do something like this vary considerably, as you know. So that’s a key check. And once you get the stamp of approval on the back of that check, you’re good to fundraise. And because you then pitched to the community and the institutional funds as you raise, this is how it plays out. Basically, your community back you first, so your friends, your neighbors, etc. get behind your idea, and that kind of creates this visible mandate for the idea. So you have hundreds of people endorsing it effectively and that then triggers the kind of support from the bigger funds. And it’s that handshake, if you like, that takes the project to the finishing line typically and delivers very high success rates. So it’s the combination of the streamlined processes. I think the verification and then this mixture of crowd and institutional money, which gives the platform the highest campaign success rate of any crowdfunding platform in the U.K. And means that people are more likely to succeed when they use Spacehive than fail. And so, you then hit your target and you’re going to deliver your project. And then the final step is you share the impact of what you done as a tool, which allows you to do that. And we then pump out the metrics and the stats and all the lovely press coverage and your pics and videos and so on to everyone who supported your project. And if you’re the community, of course, you’re going to enjoy the mural or the playground.

Eve: [00:19:42] So tell us, like, how much have you raised and how many projects have been on your site and you know…

Chris: [00:19:48] Yeah. So we’ve raised so far 22 million pounds and delivered 1,750 projects.

Eve: [00:19:59] Oh, that’s a lot of projects.

Chris: [00:20:01] Yeah, well. So, in the first years, we had a big focus on the model and we were just testing a handful of projects. We didn’t really have many delivered at all. And then about three years ago, once all the different elements of the model sort of fell into place it really started to scale. And last year, I think partly because of the pandemic, actually, you know, it really started to accelerate. So we had a fourfold increase in projects and we expect to have the same again this year.

Eve: [00:20:27] So wow, that’s fabulous. So finally, success, it takes a while, right?

Chris: [00:20:33] It does.

Eve: [00:20:35] Can you share an example of a notable project that you love that found success on Spacehive? Just a couple of examples.

Chris: [00:20:45] I mean, I’ll give you a couple. There was one we had the other day, actually in London, and there was a big focus coming out of the pandemic at the time on just reimagining local areas. I mean, in the U.K., like countries all over the world, people spend a lot more time in their neighborhood and we’re starting to look at the local high street and just the amenities they might have on their doorstep in a slightly different way. And there was this particular project that felt very, sort of, that moment. And it was an idea that a local group of kind of artists had had. They go around painting murals. They are a collective in East London and they teamed up with this French artist, Camille Walala, and came up with this idea to repaint this entire high street in East London. It was one of these sort of famously drab shopping parades, and it kind of shattered concrete and just not something that lifts the spirit, shall we say, and kind of pretty typical mix of shops, retail units in that area. You know, a little restaurant, Kwik Fit, Engineer’s Workshop and so on. There’s a fairly ordinary high street, but what they saw was the opportunity to give it this really bold lick of paint and just lift the spirits of the neighborhood, really. And it has become probably London’s or certainly one of London’s largest public artworks. I mean, it’s an enormous piece of art which stretches this entire kind of block and is sort of bright cubist kind of colors. And it’s just an amazing thing to look at. And, you know, obviously attracts people to the area, supports local businesses with footfall. But it’s the kind of, I think for a lot of people who saw it, it is sort of a bit of a light bulb moment because, you know, it’s the sort of thing that you can do a lot of places. This is a lick of paint, really. It doesn’t cost you much, about 40,000 pounds that project and you had local people getting behind it businesses, but also the mayor of London and bigger companies and people were very excited about it because they felt like that was an optimistic and simple and effective piece of kind of regeneration that could be replicated in other places.

Eve: [00:23:02] That’s a great project.

Chris: [00:23:05] Yeah. And then I think so thinking about sort of other areas as well. I mean, we’ve had this lovely idea in a little town called Frome, which is in Somerset, and actually there’ve been a few like this. Converting municipal toilet blocks. And in this particular case, they turned it into a community café, and it was about 11,000 pounds and it was obviously comprehensively fitted out, given a proper clean, but became this amazing hub for the community and it was brightly painted. They filled the square outside with tables. They have this tiny little art galleries, you know, you’d sort of peek through the doors, and you could go and look a bit. They would take from the local community, and they had a bar where you could get served, your cappuccino or whatever, and it just became a really, really, well-loved and well visited hub for the community. And again, you’re talking really small amounts of money…

Eve: [00:24:02] 11,000 pounds is not a lot of money.

Chris: [00:24:04] It’s not a lot of money, and that thing has gone from strength to strength, the community as a community business, and it’s just a real asset for the community.

Eve: [00:24:11] That’s fabulous.

Chris: [00:24:11] And it attracted again local people, local businesses. The parish council there put some money and then there was the local celebrity as well. So a nice, nice kind of mix of backers to make it happen.

Eve: [00:24:25] So are there other platforms like Spacehive in the U.K. or anywhere?

Chris: [00:24:30] There were other civic crowdfunding platforms in the world. Yeah, so and since we started, the platforms have popped up in France, in Germany, in Italy, in Spain, in Brazil and in the U.S. as well, Patronicity up in the northwest.

Eve: [00:24:48] Ah, yes.

Chris: [00:24:49] So, I think the idea is definitely moving around in different places. I mean, the fundamental proposition is civic crowdfunding is that there’s an opportunity for people to have more power to start projects. It makes sense to collaboratively fund stuff. And that is an opportunity that’s obviously not just present in the U.K. A lot of places. In Britain where the only dedicated civic crowdfunding platform, but there are other platforms that of course do projects which are community, nature and so on. But yeah, it’s this specific focus on, how do you, at scale, create a way for people to improve the civic environment with all the complexity and the political and cultural sensitivity that goes with that. And how do you integrate all the different sources of funding that are available for these sorts of projects so that you can have these quite short, focused and successful campaigns? And that’s our particular focus. But other people have different spaces and obviously they overlap.

Eve: [00:25:43] So has Spacehive met your expectations, so far?

Chris: [00:25:47] Not yet. I think it’s met my expectations in the sense of the validation for the idea is stronger than I expected in the sense of in the areas where we’ve deployed it. Communities and actually in particular municipalities and bigger companies of sort of really got behind it with a level of excitement that I didn’t expect to see so quickly. And I don’t know the willingness of government in particular, I suppose, to really quite fundamentally change the way that it works to support this different dynamic, community led, collaboratively funded. That requires sort of fundamental changes to everything from comms to process to governance. And this is why it takes time, of course. But people have been willing to do it, and it’s been amazing working with pioneers in this space, like the mayor of London, mayor of Liverpool, as well as smaller kind of parish councils, developers, foundations and so on to get all this right. So, their willingness to step up and try different things and make changes early on has been an amazing surprise. And I think the other thing that surprised me is just the diversity of projects that people come up with and the diversity of communities that do it. I mean, if you if I’m honest, you know, you harbor a bit of a fear when you launch something like this, you’re just going to get a particular sector of society.

Eve: [00:27:11] Yes.

Chris: [00:27:11] Perhaps a part of society that likes technology.

Eve: [00:27:14] Yes.

Chris: [00:27:14] You know, and the tools. But we haven’t had that at all. And it’s been most successful in communities where there’s just a strong sense of community and whether by coincidence or otherwise, that tends to be in more deprived areas. So it’s been popular everywhere. We know we’ve had it in some of the wealthiest neighborhoods in London, places like Mayfair, and also some of the most deprived wards in the country. But it tends to gravitate towards slightly more deprived communities where the strong social capital, where the strong sense of neighborliness.

Eve: [00:27:46] Right, right, right.

Chris: [00:27:47] And that has been hugely exciting for me because it shows the long-term potential of it. And obviously, you know, the social mission of this has been crucial for me. I want this to be an inclusive way of doing things that genuinely gives the widest possible audience of people a chance to feel that they can change the area. So it’s got to be for everyone. And so seeing that diversity has been really exciting to me.

Eve: [00:28:17] So what do you think, I can hear you’re not bored with this business yet, which is amazing. So, what do you think could be better?

Chris: [00:28:26] Well, I think the next milestones on our journey are going to be, so we’ve built these very strong regional hubs, where crowdfunding works well. Places like Liverpool, London, Leicester in the U.K. and so on. And we’ve done that by teaming up with the powers that be, if you like the key stakeholders in that space and then helping them to move over to this model. And chief amongst them are the municipality, but also others, universities, local businesses and so on. And where we’ve done that, we’ve managed to produce this positive experience for change makers. You know, people find it very rewarding. They’re able to get projects done. As I mentioned earlier, you’re more likely to succeed if you get involved in this stuff than fail, and that’s just a huge paradigm shift vs the experience people have before. And then if you’re the municipality, you know, it’s just a very financially efficient and sort of politically attractive way of doing civic improvement. So, I think we’ve shown the potential at regional level and the opportunity now is to kind of replicate those powerful ecosystems of support for local projects at a national level. And so, I think we’re going to get to a point where we start to have national government, where we start to have major national companies, foundations, the big beast funders, if you like. Recognizing the opportunity to move to this collaborative way of funding people powered ideas. Ideas that communities demonstrably want and are getting behind. And I just think that’s a matter of time, and we’ve had amazing conversations with all of these people already, and I think things are moving in that direction. But when we get to that point, it will be exciting because we’ll be able to replicate, if you like, the power of the offer to be able to say to communities, if you’ve got a good, viable, deliverable idea which your community supports, it’s probably going to be successful. We’re probably going to be able to get you the money you need, and it’s probably going to happen. To replicate that offer around the U.K. will be really exciting. And we’re in about 10 percent of communities, at the moment. So, there’s a huge scale up opportunity still ahead of us in that sense. And I think the national ecosystem will be a big milestone. And then the other one is just going to be really pushing on accessibility because although the model is much more inclusive than I think the traditional ways of doing this stuff, that’s always going to be a focus and always going to be a concern and making sure there’s no part of the community, part society that doesn’t feel for whatever reason, that these tools are for them. And so, we’ll want to continue innovating to make sure that everyone feels engaged and involved. And that’s going to be a long, long tail of activity that I’m sure we’ll continue over time.

Eve: [00:31:03] So this is your baby. And recently you stepped down as CEO. And I’m wondering why and what your role is now?

Chris: [00:31:13] Well, I’ve been running the company for 10 years, and I think for me, the main focus of what I wanted to do was prove that this model worked, and I feel like I got to a natural moment where we had demonstrated the viability of this model. We had a really strong case studies, the kind of core metrics of the company as performance metrics, including that kind of that success rate that I mentioned to you, were tracking along really nicely. And there was a lot of goodwill and a lot of feel-good factor towards what was going on in Spacehive, like the kinds of projects that people are doing and the impact it was having. And I think this is a complex space. The civic environment is not something you can change overnight. And I think like most CEOs, you look at what’s the right moment to hand over its more normal for founding CEOs to do that than to stick the whole hall. And I think for me, I felt there were other people out there who would be better placed than me to lead this second phase of our journey, and we found somebody really fantastic, Misha Dhanak, who’s going to be taking the company forwards and who I’m really excited to work alongside. I think for me, it gives me the opportunity to sort of come back to if you like some of that sort of strategic thinking that kind of fed into getting the business going in the first place. And whilst knowing that I’ve got somebody who’s absolutely focused and really brilliant at the challenges that you’re going to face us as we turn are still relatively small company into a big one and really increase our impact.

Eve: [00:32:53] So then what keeps you up at night, Chris?

Chris: [00:32:58] Well, like every company, you have growing pains and challenges that relate to becoming big. I think though in our space, the thing that I think about a lot is that for Spacehive to be really successful, we’re going to have to remain super thoughtful about the kind of incredibly sensitive and privileged position that we’re in here, as a platform. Sitting at the intersection between what communities want to change in their community and the area, the capital that’s needed to actually make those projects happen, you know, in the range of stakeholders that come together through Spacehive to get behind these projects. It’s a very exciting place to be. But we also have a lot of responsibility to act in a way that promotes the public interest and delivers genuine impact. And I think, you know, we’ve seen in many cases in recent years how technology companies can start with the best of intentions and some sometimes end up causing, shall we say, unwanted side effects, social side effects. So I am very mindful of that, and I want to make sure that that we remain mindful of that as a company. I think Spacehive is overwhelmingly a force for good and has good answers to some of the challenges that people rightly raise about this model, about any new model. And we need to we need to continue to be mindful of those and address them. But you know, as you get big, as you scale and as this becomes a new normal way of doing things. Of course, the sense of responsibility you have to get this right and to act in a proper way that promotes the public good is key.

Eve: [00:34:42] Well, Chris, I can’t wait to see what’s next and I want to say this, the door is always open for a Spacehive Pittsburgh hub. If you get to that point.

Chris: [00:34:54] I would be very delighted.

Eve: [00:34:54] Because it’s a fabulous model, and I think you need to find partners who kind of know the local, I suppose, movers and shakers, right?

Chris: [00:35:06] Yeah, absolutely. I mean, you know, I mean, honestly, that it’s something that I’ve always been obviously really excited about doing, expanding space in the U.K. and just, and bringing that kind of model to other communities across the world. We’ve had some amazing conversations and you’ve been part of some of them. We connected at different international conferences and so on with different mayors in different cities and so on. So I think the opportunity is obviously there. But don’t underestimate the importance of really understanding and being sensitive to what is distinctive about these different cultures and countries and making sure that you, that you’re able to adapt and get it right. I want to make sure that as and when we do that, that it’s done right. And so, it may be a little while yet, but ….

Eve: [00:35:58] That’s okay.

Chris: [00:35:59] It would be a wonderful thing.

Eve: [00:36:01] Yes, it would be. Well, thank you so much for joining me today, and I hope we can do it again sometime.

Chris: [00:36:06] It was lovely to chat. Thanks, Eve.Eve: [00:36:19] That was Chris Gourlay. Spacehive is a testament to Chris’s passion. And it took just 10 years of his life. He has lots more to do. I can’t wait to see what the next 10 years holds. You can find out more about this episode, or others you might have missed, on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Chris Gourlay and Spacehive

Rent an (AgTech) Robot.

Mark DeSantis is a Pittsburgh-based serial technology entrepreneur, policy wonk and educator. He is also CEO of Bloomfield Robotics, a new Ag company out of the CMU Robotics Institute that uses AI and computer vision to measure the health of agricultural crops on plant-by-plant basis, or in their parlance … “crop estimation technology.”

Mark knows venture capital and financing, and how technology gets commercialized. In the last 15 years Mark has co-founded and run three other companies: RoadBotics, an AI-based product that monitors and manages roadway infrastructure; kWantix, an energy hedge fund; and kWantera, a GE Ventures-backed energy predictive analytics company. Mark also served as CEO of Think Through Learning, an online tutoring company, and was U.S. managing director of ANGLE Technology, a UK-based venture capital firm and consultancy. And as if that wasn’t enough, he also ran as the Republican mayoral candidate in the 2007 Pittsburgh election.

On the policy side, Mark served as director of government relations for Texas Instruments in Washington D.C., and operated in a number of positions in the Federal government during the first Bush Administration, including as a Senior Policy Analyst in The White House Office of Science and Technology Policy and the Department of Commerce. He was also on the staff of the late U.S. Senator John Heinz. Mark has sat on a number of boards and served as a consultant for a variety of technology companies throughout his career.

Mark’s robots are for rent. All over the world. And he believes, as do his customers, that his company’s robots will help us to produce more food on the finite amount of land we have available to us.

Insights and Inspirations

  • AgTech robots will help to maximize crops on the finite land that we have.
  • Bloomfield Technologies is renting “inspector” robots all over the world.
  • Mark’s startup is based in Pittsburgh. A few years ago that was unheard of.
Read the podcast transcript here

Eve Picker: [00:00:11] Hi there, thanks for joining me on Rethink Real Estate. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone. When I’m not hosting the show, I’m running my real estate crowdfunding platform, SmallChange.co, where you’ll find impact real estate investment opportunities open for everyone. Or you can learn more about me and catch up on some podcasts at my website, EvePicker.com.

[00:00:20] Today, I’m talking with Mark DeSantis, serial entrepreneur and past Pittsburgh mayoral candidate. You might wonder how these two things come together and we talk about how. Right now his talents are focused on a startup called Bloomfield Technologies. They build robots that inspect valuable crops like grapes, helping to predict crop outcomes and helping to manage crop disasters before they happen. Mark’s robots are for rent all over the world. He’s certain they will help to produce more food on the finite amount of land we have on this earth. And so are his customers. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate and support us for the price of a cup of coffee.

Eve: [00:02:27] Hello, Mark.

Mark DeSantis: [00:02:29] Hi.

Eve: [00:02:29] It’s really nice to have you on my show. It’s been a while since we talked.

Mark: [00:02:33] Yeah, you bet.  Happy to be here.

Eve: [00:02:34] So you’ve been called a serial entrepreneur and you’re on to your next venture. And this one is an agricultural technology or what we call Agtech. Right?

Mark: [00:02:48] You bet.

Eve: [00:02:49] So, what is Bloomfield Technology all about?

Mark: [00:02:52] Yeah. So we inspect plants and we determine their health and performance one plant at a time. And we do that for the world of specialty crops. So, if you think of all of the, you know, the world’s largest industry as agriculture, as many, I’m sure your listeners know, and within that industry, there’s a category of plants and crops called specialty crops. And those are all the things that you and I buy when we go into a Safeway or a Giant Eagle or a Whole Foods. So think of fruits, vegetables, ornamental flowers. But it also includes things like trees and even cannabis, all those things that are not wheat, rice, corn are speciality crops. That’s the world, two trillion-dollar market. Those crops require a lot of love and attention, specifically from inspection. So there are people who are trained to walk among those crops, whether it be in a greenhouse or a vineyard in Napa, to look at those plants. And they’re highly trained, typically viticulturists, botanists, agronomists, and they walk among those crops, and they examine them. Periodically looking for things that could damage the plant, water stress, disease infestation. But they’re also looking at the health of the plant, determine whether or not that grape is the size they expected it to be at that time of the year. Or those tomatoes are as large and red as they should be given this time of the year and these treatments. And if they see a problem, then they can tell the grower to provide a remedy, whether it’s more water, more light, more nutrients or what have you.

Eve: [00:04:21] So kind of what I do in my own garden, but on a huge scale.

Mark: [00:04:25] Yeah, absolutely. Bet on a massive scale where you’re talking about tens upon tens of thousands of acres. Well, we do that with machines and A.I., with specifically with cameras that are mounted about the size of a toaster and they’re cameras, not unlike your cell phone, they use the same kind of imaging, except they have the stereo lens and their own light source. And you put it on anything that moves. Our growers, we are in 15 vineyards in four countries, as well as a blueberry grow in Peru. And all of those customers have vehicles of various sorts. They mount the cameras on, and they just drive up and down the rows. Image, take pictures of those things and of the crops and the A.I., the artificial intelligence in the cloud does the rest. So they take those images and go through them at the pixel level. And basically the A.I. has been trained to look for all the things that that human viticulturist or agronomists is looking for when they look at the plant, believe it or not. So A.I. has now reached a point, this is my third A.I. startup and that technology, I should say, to give a shout out to Carnegie Mellon was developed over a decade at Carnegie Mellon. Little known secret about CMU is that they’ve been making ag tech robots for 30 years.

Eve: [00:05:36] Oh, that’s interesting.

Mark: [00:05:37] Yeah, little-known fact. So yeah. So that’s what we do. Eve, I’ll tell you one interesting tidbit. Your, listeners may find this particularly, I think it’s cool, but so we do this for vineyards. Some of the vineyards are some of the best known vineyards in the world. So, one of our customers in Bordeaux is Chateau Palmer, which makes the famous Chateau Margaux one of his. You know, we have vineyards in California and elsewhere, but one of the most interesting customers we have is NASA. So we recently got a grant. There is actually a greenhouse, small greenhouse about size refrigerator, inside of the International Space Station.

Eve: [00:06:18] Oh, so interesting.

Mark: [00:06:20] Yeah, they’re growing leafy greens and spices and what have you. And it’s actually a program in NASA called Space Crops. So, think of Matt Damon in The Martian. That’s a real thing. They actually want to grow plants on the moon, on Mars, but also in the ship going to and from Mars because you can’t carry enough food to make the journey. It’s too long. So you’re actually going to have to grow your food on the way to and from…

Eve: [00:06:50] We’re talking x, x, x x, urban, right?

Mark: [00:06:53] Yeah. This is what I was joking with somebody, you know, they call the greenhouse world and the vertical farm world controlled environments. And I was telling somebody other day, we’re doing controlled environments a little different than a greenhouse. It’s one in space. So we’re within two years will be all goes well, you know, we’ll be sending one of our cameras up to the ISS, where it will be in the ISS monitoring the crops in the space station. So pretty exciting.

Eve: [00:07:24] Yeah. So back on Earth. Tell me about like a success story, you know, some crop your robot saved.

Mark: [00:07:33] Yeah, well, I don’t know if we’re there yet. We’re two years old, but we’ve, generally the feedback we’ve gotten and from the growers that, you know, as I mentioned, we’re in France. We have a customer in Italy. Peru and across four states in the U.S. The response is, is the following. The good news is the problem with using people to inspect on plants is twofold. One is, there just aren’t enough of them. You know, you’re talking about, I’ll use an example, a viticulturist, the person who’s highly trained to go look at grapes and vines and everything on the vine, you know, he or she can inspect about a tenth of an acre in a day. And that’s about one hundred and fifty vines, you know, so you’re talking about a very small fraction of of the total vineyard, whether it be a vineyard or apple orchard or orange grove. The other problem with using humans, and this one’s a little bit more, a still larger problem is that, you know, you’re using humans. And you know this from from your world, Eve.  If you gave five inspectors and had them look at the same thing, you know, you’ll get probably five opinions and they’ll probably be different enough to make any one opinion a little bit suspect.

Eve: [00:08:58] So it’s really about consistency, right?

Mark: [00:09:00] Exactly. So you really want to be consistent. And that’s where the machine, the machine intelligence, the A.I. really makes its benefit. So many of our growers have said repeatedly, you know, I now know the condition of my crops, my plants. I you know, I never really knew the condition because you’re imaging in many cases where imaging every single vine on the entire vineyard and knowing its condition as of Tuesday, that’s huge. Yeah, it’s big, big. And so, it’s new and different. No one’s doing this. This is you know, drones are a solution sometimes, but drones have been around. You know, farmers have been flying over crop fields, using sensors, various types for years. And the problem is when you’re up in the air, you can’t see through the canopy and all the fruit and everything. So we are the boots on the ground for the farmer. And growers have had higher yields. They’ve had better yield predictions. You know, that’s a big, big part of farming, as you know, is your…

Eve: [00:10:06] Yeah.

Mark: [00:10:06] And your grow. You want to know how many tomatoes you’d like to have a sense of, you know, how successful this is going to be and and so on. So all of those things are, you know, knowing what the yield is going to be, protecting the crops from damage from disease and infestation, a big one for citrus, particularly knowing when to harvest. That that cannabis is an example that we don’t we don’t do cannabis now. But we did previously some time ago when we first started the company and when I learned about cannabis is if you missed the harvest window by a day. By a day, you can lose 20, 30 percent of the value of the crop.

Eve: [00:10:47] Oh, wow.

Mark: [00:10:48] Yeah, and that’s a plant, by the way. That’s a crop where you’re talking anywhere between one and six million dollars an acre.

Eve: [00:10:58] Wow.

Mark: [00:11:00] Yeah, farming is changing dramatically and A.I. and robotic technology are driving that. It’s happened in the past, Eve. There have been waves of technology advancement in farming. You know, when you think of I always tell people this when you think of technology, the kinds of things that that allow humans to do more things, most of the advances up until the 19th century were in farming. You know, if you think of all the marvellous inventions that have helped humans do more with less and all those wonderful technologies, the vast majority of them been in farming over the last millennia or two.

Eve: [00:11:46] So interesting. Yeah. So this is a really mundane question, but I want to know what the robots look like. Did they look a little different than Rosie on the Jetson’s?

Mark: [00:11:57] Well, you would be disappointed. I can tell you that right now, anybody that’s imagining you know, like the robot butler.  No, no. You would be you would be incredibly disappointed, Eve. It looks sort of like a toaster, maybe more like small microwave with two eyes and a rim around the edge of lights of LEDs. So no arms, no legs that’s provided by the ATV or the tractor. There’s a little antenna sticking out of the side. It does look like a techie thing. I mean, when they show up on the farms, people look at that. And their first question is, what in the world is that thing?

Eve: [00:12:42] So they must be designed, designed to go over a whole variety of grounds, like rocky flat, mushy, buggy.

Mark: [00:12:51] Yeah. These things are, I call it farm hardened. You know, anyone has been on a farm, knows it’s a rough it’s a, you know, it’s a rough place. So we’ve built these things. It’s very robust, you know, pieces of equipment that have been dropped and kicked and gotten dirty and rained on and and so all that’s been sort of designed in.

Eve: [00:13:17] Cool. So I have to ask, how much does it cost to deploy one of these?

Mark: [00:13:20] Yeah. So we charge our growers anywhere, somewhere in the range of two thousand dollars per month.

Eve: [00:13:27] So they don’t buy them, they rent them.

Mark: [00:13:28] Nope. Rent.

Eve: [00:13:29] Ah, rent a robot.

Mark: [00:13:32] Yeah. And that’s, believe or not, there’s a, you know, when people, your, some of your listeners, are in the software as a service phrase that probably a lot of people have heard that. Well, there’s now a whole industry called robots as a service. You’re not selling the technology. You’re just giving them access to it. There’s even something called FaaS now. It’s called farming as a service where you actually have a piece of land, and you think there’s a way to earn some money. A company will come in and be the farming entity on that piece of land. So you’re the owner, you reap the share, the profits from…

Eve: [00:14:16] Kinda like you’re renting a building, but you rent land instead.

Mark: [00:14:18] And exactly.

Eve: [00:14:19] It’s interesting.

Mark: [00:14:20] It’s exactly that. Yeah.

Eve: [00:14:22] So I have to ask, is there a plan for tiny robots, for urban gardens?

Mark: [00:14:27] Maybe someday. I mean, it’s funny you say that. So, what we’re probably going to do someday when we get to enough size, we will make a phone app version of this that will be free. So what will happen is we have cameras, as I mentioned, the hardware that’s to do it at scale. You’re talking about farms of one hundred to twenty thousand acres. But if you want to use it in your backyard, you know, you’re not going to go buy a bigger machine. You’re what you would want, though, is access to all of the smarts. And because cameras have pretty good lenses for small scale data collection, what will probably do is will make the app freely available to anyone who can, you know, wants to download it. And then they can use their cell phone camera and they can benefit from the analytics. So if you have tomatoes and we’ve done, you know, vast tomato grows around the world, we now have, because of the way A.I. works – it’s learning, we now have all that wisdom from all those tomatoes from all over the world. Well, you can get access to that for free through your phone app for your own tomato garden in your backyard.

Eve: [00:15:42] So, you know I, over the last year, I became an avid gardener, something I thought I would never do in my life. It’s a great, great hobby when there’s a pandemic going on. But I’ve been using a plant app to identify plants in case I think they’re weeds and I’m going to pull them out. Extraordinary, pretty extraordinary. So can I be the first one to test your app?

Mark: [00:16:05] Absolutely, Eve. I hereby, I’ll go on live and just right here publicly say you will be the first.

Eve: [00:16:13] I mean, It’d be fantastic because you’re dealing with all sorts of, you know, mildew and moles and bugs. And it’s hard.

Mark: [00:16:22] You know, there’s a. you know, I’ve been in this ag tech now thing for two years, so I know, you know, a very limited knowledge, dangerous amount of knowledge, which is a very little bit. But one of the statistics I learned that really kind of stayed with me is, you know, for those listeners know your population and the world’s about seven billion, it’s expected to grow to 11 billion in the next 30 years. So that’s a 40 percent increase in population in 30 years. And somebody has done the calculation on food production. And what they concluded is that we will need to grow, we will need to grow more crops in the next 30 years than we have since the beginning of agriculture ten thousand years ago.

Eve: [00:17:13] Wow.

Mark: [00:17:14] Yeah, but it’s an even bigger challenge. And the bigger challenge is we’re going to have to do it on less arable land. So, there’s no Iowas or Ukraines left in the world with dense, rich soil left. So we’re going to have to do it on probably less arable land than is available now. And with fewer of the tools that currently are common to farming. The fertilizers and what have you are with all of the requirements for sustainability that are increasingly the case around the world, those tools will be less available. So somehow or another, we’re going to have to get more with less if we’re going to feed the world. So that’s really probably what’s driving this Agtech revolution I commented on earlier.

Eve: [00:18:03] Mm hmm. Interesting. So who thought up this robot?

Mark: [00:18:08] Well, I ,you know, I was fortunate to have met two people, one of Dr. George Kantor and who is a 20 years researcher at Carnegie Mellon, very well known in the Agtech space roboticist and one of his grad students, Tim Mueller-Sim. Tim and George had spent years developing variations of this technology in the field at Carnegie Mellon. In a literal sense in the field. And they had built all the robots that you’re imagining that you want to see, they’ve actually built those. So, the ones that crawl around or can pick a cherry without crushing it, all that, you know, they developed a lot of those things, field tested them and pretty cool stuff. But one of the lessons they learned is, you know, farmers don’t want to buy robots, yet. And that’s, you know, for people that love robots and build robots, that’s tough stuff. But they concluded, hey, look, we still want to help farmers. So what we’re going to do is we’re going to carve out the perception piece of that robot, the eyes and the brains, if you will, the A.I. in sensing and we’re not going to sell that to them. We’re going to sell a service. And we know that crop inspection, especially in specialty crops, is an essential routine in every specialty crop, just the way it is in your own garden. And so they said we’re going to carve that out and sell that as a service. So it was pretty, pretty thoughtful of them to kind of you know, it’s played out that way that the growers have resonated. So, you know, it’s probably the classic example of academic researchers transitioning to entrepreneurs. And, you know, that’s hard to do.

Eve: [00:19:59] And that’s where you came in, right? Because you are a serial entrepreneur.

Mark: [00:20:04] Yeah, yeah. And so when I met them, I came in as an advisor. And I think, Eve, I was like, I don’t know, 20 minutes into their first presentation and I, you know, I said to myself, OK, I’m just going to advise, see what. 20 minutes in, I’m like, oh, I’ve got to do this. So I just like, you know, I just can’t help myself and I don’t regret it for a minute. The two years it’s been I have flown by and I’m thoroughly enjoying this.

Eve: [00:20:35] So how do you hope to scale this company?

Mark: [00:20:39] You know, great question. So that’s the challenge every tech company has when they think of the all the benefits they could bring to the world, but then they don’t necessarily think through how everyone’s going to access this this wonderful tool. And for us, you know, for a lot of entrepreneurs like us, our strategy has been initially to knock on doors. The good news is because this technology had already been sort of field tested, we had a few leads with some vintners in California that led to them trying it and then them telling other vintners. And before, you know, we’ve got 15 vineyards in four countries,

Eve: [00:21:18] So no Facebook ads.

Mark: [00:21:20] No, no Facebook. You know, it’s funny. I think that it’s interesting how sometimes that PR is a startup and I’ve been guilty of this as you can almost get too much. And what happens is you get too much too early. And then when you meet investors or customers, they find out that the hype, you know, of your business is way ahead of what actually is there. So we were careful not to sort of get ahead of ourselves. But one of the things that we’re starting to do now, which is working is, is, you know, people use this phrase partnering. There are entities right now that buy large marketers that buy crops and then resell them to package them and sell them to the Whole Foods, Safeways and Giant Eagles of the world. And they have an interest in several things. One is in knowing that what the yield for that farm is going to be, if the sooner they know that, the better they can price it to the Whole Foods of the world. They also want to ensure that the crop that they’re buying at the beginning of the year is of a sufficient quality at the end of the year as to make that worthwhile. So they have an interest in knowing the condition of the crops, knowing the yield and various other things of the person from whom they’re going to buy those crops. So they came to us and I can’t name them yet. Someday soon, a big, big entity, global entity, and said, hey, we want to pay you to give your service to our growers. They can have access to all the analytics. They can get all that for free because we’re going to pay you and we get the benefit of knowing what the yield is going to be and the quality is going to be from that same data and then we resell it. But then there’s another addendum you’re going to find interesting. And this is new and different. This is very new. So what they’re telling us with this marketer is saying is people like you and me, when we go into Whole Foods or Giant Eagle or wherever we shop, we are increasingly want to know the history of that apple or that pepper, in other words, we want to know, OK, is that pepper really organic? We want to know where it came from. And when we say where it came from in this, believe it or not, this is where it’s going. The grower, the seller, the Whole Foods of the world wants to know what tree that apple came from.

Eve: [00:23:55] You’re kidding.

Mark: [00:23:56] I’m not kidding.

Eve: [00:23:58] I mean, is there a move towards buying more local in supermarkets as well as farmer’s markets?

Mark: [00:24:05] There is an attempt to do that. The challenge with buying local is, and this is some of the issues around some of the larger issues that people are struggling with is it’s pretty hard to compete with a Driscoll’s. You know, which is a massive grower when you’re trying to reach that quality level. There’s just a point at which a small grower just doesn’t have the scale.

Eve: [00:24:28] Yes.

Mark: [00:24:29] To match the quality of a massive grower like a Driscoll. So so there’s that. But there is a desire by the to grow the grocery stores, the places where we shop, to try to at least incorporate some local production. And so you’re seeing that play out. The challenge is we as consumers still demand our quality. As much as we want to buy local, as much as we have a desire to help keep that local ecology sort of functioning business, ag ecology functioning, we still like our quality apples. We still want to want to get the best quality we can for the price. And so there’s a bit of a challenge there for the you know, for the local growers. What’s seemingly happening is and I think this is another feature of just our own preferences as people are fussier and fussier and fussier about the quality of their produce, which is great. And so where there’s an opportunity for the local grower is rather than try to compete at the low end, they compete at the high end.

Eve: [00:25:43] That makes sense.

Mark: [00:25:44] So they go after the really premium crops, the kind that, you know, that I’m not, you know, five-dollar tomato or whatever.

Eve: [00:25:56] Yes. Yeah, interesting, so you must have done the math, because this is what I’m thinking, if everyone deployed one of your, every farm, deployed one of your robots. How much more food could we produce?

Mark: [00:26:09] Yeah, good question. You know, if you do the math conservatively, if you can increase yield just on believe it or not, I mean, the farming is it is a challenging business, whether you’re a giant grower or small. As you know, a lot of resources go into farming in the margins are pretty thin. So that means if you can increase yields, say two or three percent, you can dramatically improve the profitability of that farm dramatically. But that yield increase of two or three percent over time, in other words, you can do that on a fairly continuous basis, can add up to a lot. And that’s where food production is. It’s at the margin. You know, it’s at the margin of getting more with less. And by more with less, I mean, not just with less arable land, but with a lower resource base, less water. Water is now one of the big, big challenges in farming in, say, California, where a huge amount of our specialty crops come from. In the U.S., water is a big challenge. We as citizens of the Northeast United States, believe it or not, ultimately subsidize fresh water availability in on the west western United States. We are in our taxes and in the subsidies that are provided by the federal government to farmers. It allows for fresh water practically from being places like the Columbia River and other places out west to provide water on a massive scale, fresh water to farmers. And that is increasingly becoming expensive. Now there’s issues around the water table and you know, people that are much more expert at that than I am knowing about the depletion of of fresh water in the United States. But fresh water is now increasingly a constraint. So if you can increase yield with data and as a result, target my use of water and even nutrients by and have me use less of those and get higher yields, you not only improve the quantity of food, you reduce the resource cost. And that’s just data, Eve. It’s not, you know, we’re not talking about the labor costs or anything. We’re just talking about the simple use of the data. And that’s really our goal is not only to increase the productivity, the production, absolute production, it’s to reduce the resource base required to produce that.

Eve: [00:28:52] Yeah, interesting. So I’m going to shift gears a bit.

Mark: [00:28:56] Yeah.

Eve: [00:28:57] You know, you ran for mayor in the city of Pittsburgh a few years back, and you, and I know you’ve really been involved in the city, in the startup community. And I want to know what you believe the relationship is between a healthy city and startups.

Mark: [00:29:12] Yeah, that’s a good question. And I’ve thought a lot about that. Eve I don’t think there’s a city in the world that thinks that economic growth is necessarily inherently a bad thing. However, I do believe that a community like Pittsburgh, where there is now, I think, for the first time, I’ve been here 20 years, Eve, and I tell you what’s happening in the last three, three to five years is unlike anything that’s ever existed before. As long as I’ve lived here. It is really exploding. I mean, you have your first big IPO.

Eve: [00:29:47] Yes, Duolingo, right?

Mark: [00:29:49] And you have a few more in the queue. Yeah, that’s insane. So you’re going to see an explosion of millionaires living in the city. You’ve already seen that people who are now have suddenly are flush with wealth. There’s a concern by every city that, hey, is that going to be shared? Is that going to prosperity going to go to just a handful of people or a small elite community in this city? Or is it going to be our other citizens going to enjoy the fruits, the fruits of that?

Eve: [00:30:18] That did not play out well in San Francisco, right?

Mark: [00:30:21] Not at all. And I’ve been there with anyone who’s been there sees the disparity in peculiar San Francisco. You’ve got a beautiful, magnificent city with huge pockets of poverty.

Eve: [00:30:33] Yes.

Mark: [00:30:34] Disappointing. But I think in the case of Pittsburgh, I think it’s thoughtful leadership that doesn’t create a antagonistic kind of, you know, regressive. I don’t believe what’s happened. And I’m not pointing fingers at any politicians here. I think it’s just maybe just a natural outcome, you know, is this tech community grows is increasingly another community or other communities in this city are saying, hey, they’re getting all the attention and we’re still poor.

Eve: [00:31:04] Yes.

Mark: [00:31:04] We still have crappy roads, and our institutions are not working. Our crime is. And so I think that the kind of leadership that that needs to happen is that somebody sort of bridges that that doesn’t create an us versus them mentality, because then when the tech community says, oh, the city doesn’t like us because we’re successful now, they want to make us a scapegoat for their failures as local government. So there’s two sides to that. And that you end up creating, you know, you probably see it for the listeners nationally play out this way is, you know, when it’s really easy to point the finger and say it’s, you know, they’re the source of the problem. And I don’t see it that way. I think it’s a function of quality leadership, Eve, that I sound like giving a speech here.

Eve: [00:31:51] Oh, I completely agree with you.

Mark: [00:31:54] It’s the quality of leadership

Eve: [00:31:55] That, I mean, it’s actually played out that way with the health industry in Pittsburgh, which is really absolutely first class. And there’s been constant friction politically between that community, each other, and the city. And, you know,

Mark: [00:32:14] Needlessly, I think needlessly, I think both care about their community, both want it to succeed. Both have a desire to have everyone as much as possible enjoy the fruits of what’s happening. But I think that is in the details where it gets lost.

Eve: [00:32:30] Yeah, I mean, how did you get here? Like, what’s your background in a nutshell?

Mark: [00:32:35] Yeah, in a nutshell, it’s going to be a big nutshell because it’s crazy, but I’m trying to fit it in a tiny nutshell. OK, I spent the first 14, almost 15 years of my life in Washington, D.C., professional life in Washington, D.C., in and in and out of government, in and out of the federal government. I worked I was fortunate. I worked for initially two then congressmen, one guy named Tom Ridge, which any of your listeners in Pennsylvania would know to me became governor and secretary of homeland security. And fortunately, I worked for him. And then another guy named Mike DeWine, who is actually, now, the governor of Ohio, and that those two experiences were sort of fundamental. I then managed a political campaign in Maine.  A guy we ran for Congress and a fellow named Rollin Ives. That’s a great New England name. And we lost. But I learned a lot about campaigns and came back to D.C. I worked for a Beltway bandit, Booz Allen, that’s the phrase in Washington for anyone listening. So I don’t mean that in a negative way. So big, big consulting firm. Worked for the Justice Department, the US Justice Department, briefly as a policy analyst, and then ultimately got a job working for John Heinz. Senator Heinz, up until tragically he passed away in 91. When the senator passed away, the new senator came in and brought his own staff. So I was again in the market and I was fortunate. Just dumb luck really, got a job in The White House. Got a job working in the Office of Science Technology Policy and under the first Bush administration in the early 90s, so I got a chance to work with an interesting group of people, the science adviser for people who don’t know something called the Office of Science Technology Policy was formed formally became a White House office staff when Eisenhower was President. But but every President since John Quincy Adams actually has had some kind of science adviser. So did that for two years. And President Bush lost. I was a political appointee. So when the President loses, you also lose a job. And so I was out the door and back on the street again. But I am fortunate to have all those wonderful experiences. And I ended up getting a job with Texas Instruments. So, Texas Instruments was looking for a lobbyist, somebody to help run their government affairs in D.C. And at that time, Texas Instruments was a Fortune 60 company in 48 countries and had a lot of business all over the world. So I had to travel, got a chance to travel around the world and had a lot of interesting assignments and it’s a wonderful company. I cannot say enough good things about the generosity of the Texas Instruments. I learned a lot about technology and policy and funny thing when I left, Eve, for your listeners who don’t like corporate lobbyists, they all enjoy this. I had a going away party when I decided to leave that world and moved to Pittsburgh. So I kind of finished that stint when I was about thirty five. I had done all that stuff and I was ready to kind of move on. And they had a party for me at my favorite watering hole in D.C. and they someone gave me a bumper sticker and it said, and these are other corporate lobbyists too, they give me a bumper sticker and it said, “Please don’t tell my mother I’m a corporate lobbyist. She thinks I’m a piano player in a brothel in New Orleans.”

Eve: [00:36:30] That’s great.

Mark: [00:36:31] So anyway, so I got that and then decided I was done. I had done a lot of what I wanted to do there. It was wonderful, but I was done. So I came here right around 2000 and didn’t really have a job. I actually was able to pick up some consulting work locally and then kicked around, got some work done. I was did a little bit of consulting work for Free Markets, back in the day. And I did a little bit of consulting there and that gave me a little taste for entrepreneurship and then really kind of dedicated myself to the starting companies over the next, you know, 15, 16 years here.

Eve: [00:37:15] So, what’s interesting about that is, you know, when people think about startup, they think about some young 20-year-olds starting a company. But you have this amazing wealth of experience that you’re bringing to this company.

Mark: [00:37:33] You know, Eve, I will tell you, the statistics share. I’m also an adjunct professor, at Carnegie Mellon that’s said I want to shout out to CMU. I’ve been teaching here since I moved here and they’ve been wonderful to me. But people if the statistics for those listening or prospective entrepreneurs, statistics are, most startups are started by people in their late 40s, early fifties, believe or not vast majority. It is the, there’s a small fraction of people in starting new businesses that are in their twenties or early thirties. That’s a rarity when it comes to starting businesses. And everyone thinks of the overnight success and…

Eve: [00:38:14] And overnight success is ten years, right?

Mark: [00:38:16] Oh, yeah. I mean, this is it’s a, this isa brutal, I tell people who are contemplating starting a business and, you know, you’ve done it, you’ve done it more than once, and, you know, it’s a brutal taskmaster. It is unforgiving. And it’s…

Eve: [00:38:34] I think I’m about halfway through that ten-year fix, that success on my latest business. And it is completely brutal.

Mark: [00:38:41] Yeah. And it just, but, you know, it’s funny. It’s the kind of thing where as tough as it is. I have a friend, he’s a retired Navy SEAL officer and he’s also an entrepreneur. And he said to me once, you know, he is, you know, being an entrepreneur is sort of like being a Navy SEAL and that you just have to get comfortable being uncomfortable.

Eve: [00:39:04] Yeah. Yeah. OK, I have one more question for you, and that is, what is your big, hairy, audacious goal?

Mark: [00:39:15] Wow. Wow. Oh, my goodness, where do I begin? I just want to make a difference here and in our community and whether that community is Pittsburgh, the region or even the state, I want to make a difference. That’s my goal. I enjoy what I do. I feel great about this company and what it can do. And that’s one of the reasons I love this company, is it’s going to make a difference for farmers, hopefully all over the world. And, but another important goal of mine is to make a difference where I live and try to make as big a difference as possible. And so I think that the great old, grand old, you know, Keystone State that we live in, you know, one of the colonies from way back is seen better days. And I think the communities that are here, you know, we’ve had suffered from population decline in Pittsburgh, in the region and in the state. And I think that there’s a desire to see something better and see change coming. And I think that that’s now possible. You know, it’s not the old, you know, stodgy community state that it once was. I think there’s new vitality, but I think it’s going to take time. And I want to see what I can do to make a difference somehow, some way. That’s what I think is the most energizing thing for me is that it’s why I love startups. It’s a way to kind of cause positive things to happen, keeps me motivated. And that’s what motivates me, is to try to make a difference where you live.

Eve: [00:40:53] That’s a great answer. I feel completely energized now. Mark, thank you very much. Thank you very much for talking to me.

Mark: [00:41:01] Yeah, sure. Happy to be here, Eve. Thanks.

Eve: [00:41:09] That was Mark DeSantis of Bloomfield Technologies. Mark pivoted his life and career from politics into start ups, and he moved from D.C. to Pittsburgh, where he is living his dream, nurturing an ag tech company into a global position in his much loved, adopted city. We’ll be hearing more about Mark and Bloomfield Technologies, I’m sure.

[00:41:46] You can find out more about this episode on the show notes page at EvePicker.com or you can find other episodes you might have missed, or you can show your support at Patreon.com/rethinkrealestate for the price of a cup of coffee. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Mark DeSantis, Bloomfield Robotics