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Here’s the program.
Andrew Warner: Hey everyone. I’m Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. By now you guys know what we do. Every day I bring a different businessperson on here to talk about how he or she is building a business. Talk about what they learned along the way, to see what we can learn from their experience, so that I can send you out into the world with enough armor, with enough information, with enough ambition and drive and motivation so you can build your own company. And, hopefully, you’ll come back here and do an interview with me after you’ve done that.
Today, I’m joined by Pamela Marrone. She’s an entrepreneur who’s been obsessed with bugs since she was nine years old. And I’m going to ask her about that. Throughout her career, she’s launched three companies targeting weed and pest control. Her latest is Marrone Bio Innovations.
Pamela, welcome.
Pamela: Hi. You know, I was interested in bugs at the age of nine years old. Yup.
Andrew: What did you do with bugs when you were nine years old?
Pamela: Well, living in rural Connecticut, the gypsy moths would come through and denude the forest. And in the middle of summer, it looked like winter. And I said, when I was about eight or nine, “I’m going to learn how to control them. But, I don’t want to use any chemicals and something that would harm the bees and the birds. And I’m going to make a career of controlling bugs naturally.” And, honest to God, I did. My whole career, that’s what I wanted to do.
Andrew: I see that. That actually sounds so perfect. To be honest with you, it sounds like the PR department wrote that. You really even back then were saying to yourself . . .
Pamela: No, no.
Andrew: . . . it has to be natural?
Pamela: True story. My father is a pioneer. He’s not alive anymore, but he was a pioneer in many ways. He used the first biopesticide, which was a soil microbe of bacterium that is very safe and it’s widely used. And you can spray it to control caterpillars. He used it when it was just coming out that many years ago. And so I got exposure to actual natural pesticides from a very young age.
And he said, “I’m going to control the gypsy moth because it’s hurting this prized dogwood.” Still in front of the kitchen window. “And I don’t want to kill anything else.” And that’s what he did. So, that’s how I got exposure to it.
Andrew: What about business? At nine years old, I was, believe it or not, cooking up business plans and trying to think of how I could rule the world and be like the guy who was big in New York, Donald Trump. I kept reading about him everywhere. And, I said, “How do I do that?” Was there any business fascination going along with the bugs?
Pamela: Absolutely. Because I said I had to create products that were going to be used to control the bugs. So, in order to do that, you have to create a business. So, as I went through high school and did my science fairs on this topic, and then in college majored in entymology, all the while thinking, “There’s got to be a way.”
The only way you are going to do this is rather than be in the academic world, which would be long-term research that wasn’t necessarily commercially focused, in order to solve the bug problem, I was going to have to do it in a company setting, and pursued that at a very early age. Yes.
Andrew: I see Mickey D in the audience is comparing it, I guess, to a lemonade stand.
Pamela: [laughs]
Andrew: What was your first lemonade stand, or your first business?
Pamela: I actually was very artsy and craftsy, and I made all these Christmas ornaments and things of that nature. And I put a little stand out on the corner near the circle in Killingworth, Connecticut. And people would come by around Christmastime and look at the ornaments, which, actually, were very nice. And buy them. So, instead of a lemonade stand, I had a Christmas ornament stand.
Andrew: [laughs] Wow. All right. First business, was it Monsanto?
Pamela: Yes. I was hired right out of graduate school to start up a unit within Monsanto to research ways to control pests without using chemical pesticides. And I did that for seven years. And they ended up wanting to genetically engineer crops for insect control. That was not my interest. I was more interested in doing the natural thing.
So, I got a call one day from a Danish company called Novo Nordisk. And they wanted me to start up a company in Davis, California, of all things, to look for ways to control insects without using chemicals. So, I did that. So, that was called Entotech. And that was in 1990, and I did that through 1995.
They had some issues with their core businesses, their other businesses. And they sold us to our largest competitor in ’95. And that’s when I started up AgraQuest. And I was CEO of that one for ten years, almost ten years.
And I got the company to filing initial public offering, but I had some very bad luck. I filed three weeks or so before 9/11 with the SEC. Merrill Lynch was the lead underwriter for a NASDAQ IPO. And when 9/11 happened and the whole market crashed, I had to pull the offering, and looked around for money. Everyone was crabby. Investors were not investing.
Rather than fully downsize the company, you know, going from 70 employees down to 10, I kept it. Slimmed it a little bit, but our customers were telling us, because we’re competing with big companies, that if you look unstable by downsizing too much, you’re letting people go, we’re not going to buy from you.
So, to preserve the company, I decided to take money from a large private equity group, and then we just didn’t agree on the future of the company. And I left and started up the current company, Marrone Bio Innovations in 2006.
Andrew: And that’s where you are right now.
Pamela: That’s my story. Yup, yup.
Andrew: All right. Why don’t we start then. I want to go through this story and dig into as many of the businesses as we can. Why don’t we start with the first one? 1990, 1995, Entotech. That’s your first shot at running a business. Why did they pick you to run a business?
Pamela: Well, you know, this is a highly technical business, and you do have to have a technical background to be able to understand how you are actually going to develop a product. So, to go out to nature, take a little bag of soil, bring it back to the lab, have scientists find things that live in there. Then, how do you convert that to actually a product that you can spray on crops to control bugs?
That’s a pretty detailed process. So, someone with a technical background, and because I had already worked for a company and had a . . . . at Monsanto, actually, I was trained heavily in business, on the business side. So, I’d taken many, many courses. I would have liked to have gotten an MBA at the end of the day, but I didn’t. But they had some very good business training.
So, I did have the blend of enough business and the technical at the same time.
Andrew: How much of it was business and how much of it was technical at that point?
Pamela: At that point, I was at the point where I was hiring other people to do the science. I actually have not been in the lab since 1985.
Andrew: Mm-hmm.
Pamela: So, even at Monsanto, my boss recognized that I had a flair for people management, and so, moved me out of the lab from two years after I was there. It’s been a long time that I’ve been in the lab, but I do keep up with the science. Because, again, it is a very technical business, and there’s a lot of technical obstacles along the way and decisions that have to be made.
My role in all the companies is really to help the scientists come up with creative solutions to solve roadblocks rather than actually doing the hands-on science. That’s what I have other people to do.
Andrew: I watch a lot of documentaries. Monsanto seems to get ripped a lot lately in documentaries.
Pamela: [laughs]
Andrew: [laughs] It ties in with Matthew Klassen’s question here in the chat room. He’s saying, “Were you ethically opposed to the genetic engineering of seeds at Monsanto?”
Pamela: I had some problems with it from the standpoint of, every time I went out to give a talk about what we were doing, people would have all these questions about, “Would the insects develop resistance to the plants? Would the weeds develop resistance?”
From a scientific point of view, that was not so much that the human health effects were going to be a problem, but that the insects and the weeds were going to mutate and they were eventually going to become resistant. And that is actually showing to be true.
So, I really wanted to do something that was not adulterating anything that was really from the natural world. And I realized that, I don’t usually often say too much that I came from Monsanto because they’re not one that a lot of people like, that company, because of the concentration of the seeds and so forth.
Andrew: Yeah, I noticed that we were breezing through that quickly. For people who don’t know it, I’ll just do my best to explain what I’ve learned from the documentaries that I saw.
Apparently, they create seeds. Soybeans, apparently, are really big for them. They’re their own soybeans resistant to pests, I guess. Am I right? Maybe you could explain it.
Pamela: Yeah. What they do, is they have a weed killer called RoundUp. And they engineer into the crop. RoundUp kills all plants. So, they engineer into the crop so that now you can spray RoundUp over the plant and you can kill weeds. And what’s happened is that, over time, the weeds have become resistant to RoundUp. And then, you have to use more toxic chemicals to control the weeds. So, it’s very controversial.
That was my, I guess, technical fear back when. So, my goal is to create sustainable systems. So, Monsanto will have to solve that problem. Actually, in our current company, we are looking for natural products to control weeds and looking for things that actually could control the weeds that are resistant to RoundUp now.
Andrew: Is it possible, or is it more like in the computer industry, where it is just an arms race. The guys who create viruses get smarter and smarter. And the guys who battle those guys get smarter and smarter. But they just keep getting smarter and outwitting each other.
Pamela: Well, that’s the way it was in the past, with the whole pesticide industry. The farmers would always assume that the companies would come up with the next generation of products—pesticides or genetically engineered seeds—in order to overcome the resistant bugs or weeds that have mutated.
So, it was like an arms race. But what’s happened, the cost of finding something to control pests that’s chemical, it’s over $250 million, and it takes 12 years to get to the market. So, it’s not easy to find a new chemical pesticide anymore.
So, if you’re going to put one on the market, you better make sure that the bugs are not going to develop resistance to it so quickly anymore. So, the arms race is kind of screeching to a halt, I would say.
Andrew: OK. AgraQuest. You went out, you launched a new company. You raised tens of millions of dollars. At that point, you really were an entrepreneur.
Pamela: Yes.
Andrew: How did you even know how and where to get started? Where to go raise money? How to convince investors to invest? And this seems like a pretty tough kind of business to invest in.
Pamela: Yeah.
Andrew: Because it takes a long time to see results.
Pamela: Yeah.
Andrew: And because you have to do a lot of groundwork and talk to farmers. It’s not an overnight success.
Pamela: Yes. It’s certainly not a technology. It’s not an iPad. [laughs]
Andrew: Yeah.
Pamela: So, I didn’t know how to raise money at the time, so I actually cold called. And you are not supposed to do that. But it worked. So, I cold called many investors. Actually, back then, I’m old enough that the web was not existing, so there were no web resources.
So, I got the National Venture Capital book of venture capital. And I actually combed through the pages to look for anyone who would invest remotely in something like agriculture.
And I actually found Calvert Social Ventures. They are an existing investor, and they were an investor in AgraQuest. And they have a group where you pitch in front of an investors’ circle. And, it’s the first ever aggregated group of investors to invest in environmentally and socially responsible businesses. So, I presented before that group of about 200 investors in May of 2006, in Chicago, and got Rockefeller and Company money to launch our first major venture round.
Andrew: Wow. And how much was that for?
Pamela: Let’s see. That round was close to $4 million, I think. I forget what their actual allocation was. And then, once you had a lead, of course, a lead investor, they were the lead. Then, all the other investors who I was wooing would come in. I did end up raising $50 million until the IPO filing, and then of course had some bad luck there.
Andrew: You know, a lot of people, in retrospect, blame 9/11 and blame the economy. So when I heard about that, that was part of your story, I went and I did some research. And sure enough, even contemporary newspapers said, “This was about to go. This was about to happen.” And then 9/11 happens, the economy takes a hit, and you end up suffering for it.
Pamela: Yes.
Andrew: What was that like? Not your fault, you’ve worked really hard to get there. What is it like?
Pamela: Right. Well, I was actually flying to the World Financial Center, which was right next to the World Trade Center. My flight was September 12th. And, so, on the day of 9/11, I said, “Oops. That’s not going to happen.” I e-mailed the Merrill Lynch bankers, and they e-mailed back on their BlackBerries, which is remarkable, they said, “We’re running from falling glass.” And the lawyers in the South Tower, who were doing this deal, all got out.
So, I was, “Oh boy. I can’t be selfish and think that my life is affected because of all the devastation there in New York and Washington.” So, I had to kind of put it in perspective. So, what I did was I said, “This is really going to change things.” So, I went out and for quite a period of time, like one to two months, I went out and visited customers all around the world to put things in perspective.
And I just talked to all the customers about the business and where we’re going and that was very healthy for me. So, then I’d come back, and then I had all this energy to decide how I was going to find money to keep the company going.
Andrew: And you needed money. Beyond talking to customers, from what I understand, you needed to raise a certain amount of money. How did you do it?
Pamela: Yes. We needed to raise money because we were just launching our major product, which now is very successful, called Serenade. It controls leaf spots and mildews on plants. And our customers, as I said earlier, told us, “Don’t downsize too much because you are competing with Dow and Bayer and BSF, these big companies. We can always buy somebody else’s product and not yours for the same kind of leaf spots and stuff.”
Andrew: Mm-hmm.
Pamela: “You have to look stable.” So, I said, “OK. I’m going to preserve the company. If that means sacrificing other things, I’ll do that.” So, I looked everywhere for money. Our current investors had some money, but they had already been pretty well tapped out from putting in 50 to 60 million already.
So, it wasn’t enough to get us to the next level with existing investors. So, I did have to find money. And there was Cleantech Venture Network. It’s another one of those groups that aggregates investors together. A very good group. And I presented there. And that’s where Texas Pacific Group, TPG Ventures was there. They were interested in this business.
And I accepted terms with a full ratchet. And what that means is that on the next round, if the price is lower than the current round, then you have to issue shares to all the previous shareholders who have a higher priced stock.
So, this is called a cram down. So, what happened was, the early investors including my founder stock was crammed down, because they came in at a much lower price. They triggered the full ratchet. And then, there was a much lower price. So, new shares were issued to the new shareholders and all the old shareholders who had a higher price. And then, of course, the earlier investors got wiped out.
Andrew: Wow.
Pamela: So, it was very tough. It was very, very, very, very tough. Yeah. And I stayed with the company for another couple of years. And I went from CEO then to chairman to president. Then, just the strategy of the company, we disagreed, and that happens.
They wanted to focus on existing products, and I wanted to continue to keep the pipeline going. Because, to have enough revenues to satisfy investors, I felt that you needed to have a lot of products going through product development so that you could ramp up revenue faster. Focusing on one or two products, the revenue wasn’t going to be fast enough to ramp up. So, I left and said, “I’m going to start up again.” And I did, in 2006, with the current company.
Andrew: And you were left with no shares when you left the company?
Pamela: I have my founder’s stock. Yes. But, I’m heavily diluted.
Andrew: Right.
Pamela: That’s about it. Yeah.
Andrew: And you started this thing, from what I read, you had a lab set up in a bathroom at one point. You were working out of basic office space. Can you describe what it was like to set this thing up, to get it going back in ’95?
Pamela: AgraQuest?
Andrew: Yeah.
Pamela: Let’s see. It was a small suite and there actually was an existing lab. Actually, it was a little incubator already in Davis. So, it was nice. It had to build out. The space was already built out. And actually, at Marrone Bio Innovations, it was more like a garage, a true garage. It was right across from a tire place, Goodyear tire center. And it was just a tilt up garage which we put some lab benches in. So, it was even cruder at Marrone Bio Innovations.
But, AgraQuest, we had a pretty nice little lab of about 375 square feet. And then that went up to about 1,700 square feet. We outgrew the space, and then I built a 10,000 square foot lab, which they still have in south Davis.
Andrew: How did you get your first customers?
Pamela: Our first customers were actually organic farmers. So, organic farming is growing very fast, but it’s still a niche in agriculture relative to the conventional pesticide market. So, $35 billion worth of chemical pesticides are sold. So, if we’re going to have a fast growth company, we need to convince farmers to not use chemicals and to replace chemicals with our products in conventional agriculture.
But then, there’s this organic niche where you can’t use chemicals. So, our products are listed and are perfectly suited for organic farming. So, what we found is that we could get a beachhead with organic farmers because they would seek us out because they can’t use chemicals. They don’t have good solutions for controlling pests, and they could lose a lot of yield for other crops by not having anything. So, they would seek us out. It was not as hard as with a conventional grower to convince them not to use a chemical but to replace it with ours.
So, that was our beachhead. And then, once it worked on the organic farms, the neighboring conventional farmers would say, “Oh. This is interesting.” And they would start using it. So, it would bridge it over to mainstream farmers.
Andrew: I see. And I know that it’s available in Walmart now. How did you get into Walmart? Was that you?
Pamela: Well, I actually did that myself. I actually flew to Bentonville, Arkansas and pitched the garden buyer. And he was quite forward thinking, surprisingly. I mean, some people don’t think Walmart is, but I guess now they are with all their sustainability initiatives. He told me that within five years, there are probably not going to be many chemicals in the store, so he better start looking at the natural products, which I found quite interesting. Amazing, actually.
So, he actually helped us to develop the package exactly as it is, Serenade Garden Disease Control, and the colors and the wording and everything. And they put it in a test market of 700 stores the first year. And then it went up from there.
Andrew: How did you get in the door, Anthony Serra is asking, at Walmart?
Pamela: I actually found a consultant, whose whole business, and lives in Bentonville and was an ex-Walmart employee, and they introduced me.
Andrew: [laughs]
Pamela: I couldn’t do it. No. It would be too difficult to do it on my own. So, I got the introduction and took it from there.
Andrew: All right. You got set up for the IPO. It doesn’t happen. Can you describe your personal state and how you got through it?
Pamela: It was pretty devastating. But, I think entrepreneurs have to be able to do this. I have the ability to segment off the negative emotions and focus on the future and the positive. And that’s what I did. It was all about the company. Even though it might have sacrificed my holding, the stock and so forth.
I have a mission in life, as you can tell. If you’re going to be nine years old and want to control pests naturally, that’s my goal—to transform agriculture. Still my goal. And so, I focused on what was going to be best for getting the products out there and proving that these kinds of natural products, Serenade, which is the lead product, is going to be a very successful product.
So, really focusing on the mission and what I was always, my whole life, was about. To make it very clear in the industry and with customers that we had a product that could perform and be as good and replace chemicals.
So, that’s really what I was doing. So, I really had to segment off the negative emotions. Not everybody can do that, but I think entrepreneurs do that very well.
Andrew: How? How do you do that? You got the world collapsing around you. People are doubting their very existence and future, and you’re able to shut all that off and focus on what you need. How do you do it?
Pamela: Well, entrepreneurs have a passion for what they’re doing. And that’s what really takes you.
Andrew: Even at that point? That would sap my passion. No?
Pamela: No. No.
Andrew: I’d be in my head, counting all the money and all the people that would be impacted by this IPO. Who would get the friends and family shares and how my life would be a little bit different, a lot different.
Pamela: Yup. That’s true. That’s true.
Andrew: So how do you segment all that off?
Pamela: I don’t know, actually. But, I do like to run a lot. So, I do make sure that you have a physical outlet so that you can really keep those endorphins going in your body. I mean, there were times when I just wanted to sit on the couch and you could go from being very healthy.
My husband is a licensed clinical social worker, so I know stuff. [laughs] You can just veg out on the couch, or you are teetering on the depression. And you really have to move yourself out of that. I think, for me, physical activity and gardening. I had a hobby where you can go out and commune in my garden and plant and dig, as well as running, were the ways to cope through.
So, keeping completely physical and getting the endorphins. And, I’d run even faster and harder if I had to.
Andrew: All right. So, you end up leaving the company in ’05. ’06, you start your current business. How do you protect yourself now from cram downs and ratchets and the racket of investors?
Pamela: That is a really good question that every new entrepreneur asks me. And, number one is get a really good lawyer. And I’m serious about that.
Andrew: Mm-hmm.
Pamela: Number two, it’s a marriage with investors. Select your investors carefully. And it’s about values. So, I am in a value based business. I am in a business to change the world. And hopefully make money for employees and investors at the same time.
So, you have to find investors who share those values, and that’s really important. And also, the same with picking employees who share those values. So, it is all about the people. And you do have to look at it as it is a marriage with your investors. And, therefore, choose carefully.
Andrew: All right. OK. So, you ended up with better investors this time.
Pamela: Well, I wouldn’t say. Better is a charged word.
Andrew: Good point.
Pamela: [laughs] It’s a charged word.
Andrew: Let’s say less. . .
Pamela: Well, I would say investors that have the chemistry with me.
Andrew: Yes, and you were better prepared to work with them. You knew what to watch out for, you were all set up. You got the finances in order. $22 million you raised? From what I understand?
Pamela: Yeah. It’s now up to 23 and a half. Our current investors are very kind and supportive and have put in additional money. So, that’s great. Yeah, and they do believe in what we’re doing. And the other thing is, it’s really important to have someone who is an investor and on your board who has run a business.
And we have one from Stuart Mill Venture Partners, Larry Hough, and he was the former CEO of Sallie Mae. So, when you have someone who knows and has gone through the trials and tribulations of running a business, if something happens in the business, then some other investors who haven’t run a business might freak. And, whereas someone who has run a business will say, “Oh, that happens.”
Andrew: Give me an example. What happened that he didn’t freak out but he had his head and wits about him.
Pamela: Well, we’re a regulated industry, and sometimes politics will change what happens with the government and how long it takes to get your product out the door. We have a fairly predictable process. But, there are new rules under the Obama administration that are slowing things down in the EPA.
So, there’s some slower time frames. And that means you’re launching your product later. And so that means a delay in revenue. Well, that’s just something that happens.
Weather. We’re in ag, OK? So, if you have a drought and you’re selling a product that controls molds and mildews, that like moisture, then, of course, things are going to be a little different than if you had a lot of rain.
So, these are the kinds of things where other investors, they are out of our control, really. It’s really out of our control. So, he helps everyone focus on things that we can control and not as much worry about things that are outside of our control.
Andrew: Let’s talk finances a little bit. The guy who ran Going.com and sold it to America Online did pretty well in the sale, but he was frank with me. He said, “You know, Andrew? I thought about it later on and I said, ‘If I took into account all those lean years where I couldn’t pay myself and also compared that to how my salary would have increased if I had continued to work for IBM, I might have done better as an employee with fewer headaches.'” Do you think that’s true with you too?
Pamela: I actually do. And I’m surprised that I would say that. But I’ve looked at some of the people who have stayed in corporate, and they can draw some great salaries and have really good benefits. And they don’t have the hassle that I have to go through in building a company.
Yes, I think that actually financially, you might end up better, because it is a crapshoot whether you are going to make money as an entrepreneur. Now, I’m on my third shot and I will tell you . . .
Oops, I have to move, because I am in a place where the light just went off. [laughs]
Andrew: I figured that’s what it was.
Pamela: So, this time I’m absolutely determined to make money, because I didn’t the last time. So, I’m changing the world. But, this time I also have the goal of making money at the same time. But, I do agree. In corporate, you can do very well. Corporate business, I have a lot of friends that way.
Andrew: But the reason this makes more sense for you is what?
Pamela: Again, it’s the passion about the mission and the vision.
Andrew: But you could do that mission at another company.
Pamela: No, no, no. Not in the way I can do it.
Andrew: Tell me about that.
Pamela: Because I have more experience now. I am 27 years in business, and I have developed probably more products, biopesticides, natural products for controlling pests than anyone in the industry, as far as I can tell.
Therefore, really, I know what I’m doing. And if I were in a corporate setting, there would be too many politics and bosses telling me what to do. And it wouldn’t go the way I know it needs to go.
So, as CEO of this company, I’ve laid out a strategy. Teaching employees who don’t know how to develop products like ours of how to do it. And then, they go do it. A lot of young hires right out of UC Davis, and they are full of energy. I teach them how to do it. And once the strategy is set, then you just go run. In a corporate setting, I couldn’t do that. I couldn’t do that. Not at all.
Andrew: All right. What’s the future here at this company? What do you see? If we come back and check with you in a few years, what are we going to see?
Pamela: Well, this company has the potential to be the number one leader in biopesticides, as we call them, or natural products. Because, we are science based and we have a heavy focus on R & D. And, that’s the strategy is to have multiple products hitting the market at the same time. So then we can grow quickly and satisfy the investor side of the business. At the same time, developing products that customers need.
And we focus on some very exciting segments. For example, we didn’t invent this. But, we licensed something from New York State. It’s a very safe, naturally occurring bacterium that kills invasive zebra and quagga mussels. These are invasive mussels that have gone into the Great Lakes and devastated freshwater ecosystems and they clog pipes in power plants. And they’ve moved out here in the West. And we have the only natural solution for these mussels. So, that’s going to be a very exciting product, and we’re going commercial right now.
And then we have discovered what I would call an organic RoundUp. We talked about RoundUp earlier. Organic farmers can’t use chemicals. But, their number one cost of organic production and why it is so expensive at the grocery store is weeds. They have to hand hoe or mow. It’s not easy. They can’t use chemicals.
We found a natural occurring micro-organism, a bacterium that, when you spray it on the plant, actually the natural products produced by the microbe move in the plant like a RoundUp would and go down and kill to the root. So, it gives long lasting weed control.
We are commercializing that right now. We think that’s going to . . .
Andrew: And the spray is still considered organic?
Pamela: Yes, because it’s completely natural. We are regulated, so we have to prove that it’s safe in the environment and to mammals and bees and birds and fish and all that. There are a lot of tests we have to do. So, once that is proven to be safe. We don’t put anything in it that’s not allowed in organic farming.
And so you can spray it on the plants, and it will have systemic control. It means it moves through the plants down to the roots, so you can get long lasting weed control. Everywhere I go, every farmer I talk to says, “When are you coming up with this, Pam?” Because they are so excited by it. This would, again, revolutionize organic farming so that you could transition many more acres from conventional to organic. Because right now, it’s just too difficult to control the weeds.
Andrew: This is what I read in a 2006 article about you, or about the industry when you stood out to launch this business. It said that organic farmers have to pull weeds with their hands or with their hoes. Either way, we are talking about manually.
Pamela: Yes.
Andrew: So, that is still true to this day?
Pamela: It is. So, California fresh strawberry producers, it costs $3,000 an acre to hand hoe the weeds in strawberries if you are going to go organic. And in conventional production you can use chemicals.
So, yeah. They still hoe. And they have work crews. You can drive around California, which is the number one producer of fruits and vegetables in the nation, and you can see field crews with hoes in many crops picking out those weeds. It’s very inefficient and it is costly. And we hope to change that with something that is very safe, but works very well against the weeds.
Andrew: When are you going to be coming out with that? What is the plan?
Pamela: It should be on the market in 2012. It’s going to the EPA this month. We’re submitting it. And then it takes somewhere between 18 months to two years for the government approval.
Andrew: I don’t know how you do it. I talk here to Internet entrepreneurs. By the time 2012 rolls around and you are able to sell this, a guy who started his company today will have sold two companies.
Pamela: I know.
Andrew: It’s like launching a website right now, Ruby on Rails. He’ll be here next week. We’ll talk about how he sold that first one.
Pamela: Yeah. Yeah. You know, that’s why when I said picking the right investors. Because, a technology based investor would not understand the long time frames. We are a regulated industry. We do have longer time frames. It takes millions to develop one product. And, when you talk to a farmer, they don’t buy your product all at once, they try a little bit the first year on, let’s say, ten acres. Then the next year they try it on 100. And, if they are a big farmer and they have thousands of acres, it won’t be until the third season, maybe it could be one year, because there’s more seasons than just in one year.
But, that third season, they’ll have full adoption. That is a slower adoption. So, to get around that, we’re developing multiple products across many different markets so we have weeds, we’re killing weeds, killing insects, killing plants diseases, and the mussels.
So, we have multiple products in different segments that can ramp up at the same time versus a tech business where you can instantly get all these consumers and users in such a short period of time. Yeah. Different business.
Andrew: Pam, is the big lesson from this that if your nine year old starts developing an interest in bugs, hand them an iPad. Give them a computer. Teach them how to program for the Android? Any one of those?
Pamela: No.
Andrew: No. You’ve got to just support whatever their passion is.
Pamela: Yes, actually, that, too. Because, definitely everybody should be tech savvy. But, no. I have a niece, Maggie, who is about that age, and she loves bugs. And I just hope she can follow in my footsteps and become an entrepreneur.
Andrew: [laughs]
Pamela: Do this thing. Take over. We need more entrepreneurs in our business, in agriculture. Our population is going from six billion to nine billion in the world. How are we going to feed the world?
There’s a big argument right now. The blogs are raging with, “What is the way?” Some people think it’s the genetically modified crops. Other people on the other spectrum and think it’s organic crops. So, we feel that we have a solution here at Marrone Bio Innovations that definitely can have a major impact in the fact that we do need to feed a lot more people more efficiently and sustainably.
Andrew: All right. Well, the person who’s going to build the Ruby on Rails Twitter based application is not going to change the world to this degree. So, good luck.
Pamela: [laughs]
Andrew: It’s great to meet you. All right. And, maybe if your kid is interested in bugs, you should let them keep playing with bugs instead of forcing an Android or a computer in their hands.
Pamela: Absolutely. Absolutely. But they could do both. [laughs]
Andrew: They could do both. Thank you for coming here. It’s great to meet you.
Pamela: Thank you.
Andrew: Thank you all for watching. See you on the website.
Pamela: Bye.
Andrew: Bye.
This transcript brought to you by www.SpeechPad.com.
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