Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. When I got married. Or before I did. I remember the one thing that my wife kept hinting at and saying was related to the diamond engagement ring, had nothing to do with the size.
I kind of wish she had, I wish you’d told me the size. I wish she told me what design she wanted. I wish your friends knew her taste enough to tell me they didn’t. So I was kind of lost on that, but the one thing she wanted was to make sure that this wasn’t, it wasn’t a blood diamond that she was carrying.
So she cared enough about what she was carrying around that you did not. All the guilt of things that happen in the diamond industry. Well, joining me today is an entrepreneur Ryan Sherman, who says, well, why don’t we go a step beyond? How about if we look for one that doesn’t pollute the earth? How about if we can find one that helps clean the earth and he created a company it’s fairly new.
I invited him here to talk about how he did this, how he went from idea to an actual diamond, to an, to sales. And I want to find out whether this actually works in the diamond industry. Why do people want something that they might consider fake? I’m looking at your eyes, as I say the word fake to see Ryan.
If, if it pisses you off that I’ve said, does it bother you? That I use the word fake sometimes.
Ryan: There are people I’m sure at dollars. Um, I think the sentiment has shifted already. I think we’ve gotten over the hump. Collectively adoption has increased to such a, such a point where the only people who are really trying to position lab grown diamonds as fake are people who have invested interests in the mined diamond
Andrew: But isn’t the whole idea of diamonds being amazing. It’s not just the look of them because a lot of rocks, it looked good. It’s that? It’s, it’s hard to find there. Aren’t a lot of them.
Ryan: There’s an aspect to the story that touches on scarcity. Diamonds are rare. There are misconceptions out there as to how rare diamonds are, and this notion that some of the big mining companies have warehouses full of diamonds. And the reality of the situation is over the last 30 years, industry has gone through some major changes.
So, you know, this, this notion that you kind of have this cartel. Body operating, you know, behind the scenes influencing the entire market. That’s not quite true anymore.
Andrew: That’s a weight. It is. Isn’t there a limited supply of diamonds.
Ryan: Absolutely. So, so this is the point I was getting to, um, diamonds, like any other mineral or gemstone or anything you can remove from the ground are a finite resource. So the output diamond mining efforts all over the world peaked in 2017. From here on out, there’ll be fewer and fewer diamonds being pulled out from the ground.
So diamonds are becoming more rare, right? So if your, if your business interests are in the, in the diamond mining side of the industry, um, you want to protect those interests and, and bad mouthing manmade products that are identical at an atomic
Andrew: but even if they weren’t bad mouthing it, everyone talks about the unique thing about NFTs is that they are so rare that it’s not, that it’s not, that they’re gifts that you can save. It’s just that the one that you bought is considered a rare item. That seems fake even ridiculous, even as I say it out loud, but, but it is the, the rarity that makes people covet them.
Ryan: So there’s definitely an element of the, of the story. That touches on, on rarity and scarcity. There’s the fact that they were forged in the deep, inside the earth a very, very long time ago, billions of years ago, I in the trade, I actually probably hear more people pointing to that aspect. The fact that these are, you know, Anything we know, um, you know, older than humanity, that part of the story comes through.
It, it imbues the entire concept with a sense of romanticism. And that sense of romanticism is completely devoid in the, in the regular lab. You know, and this is, this is one of the epiphanies we had early on and that’s the angle we wanted to take. We’re bringing a really, truly sustainable and romantic story to the diamond trade in a way that, you know, frankly, we think it’s a story that lands much better with today’s conscious consumers than anything that points to the fact that the diamonds were forced inside the earth.
One to multiple billions of years
Andrew: that makes sense that there are people. I think my wife is one of them who, who seeing the world become cleaner is more valuable and more meaningful than knowing that what they have is, is rare. All right. So I guess
Ryan: I mean that rarity comes with a price too. You know, something, that’s something that you really can’t sidestep. There are significant environmental challenges associated with extracting anything from the ground. And then you have a pretty well-known. Human rights, concern associated with diamond production and the challenges with pulling diamonds from the ground and in parts of the world, um, that have been popularized by Hollywood movies and, and even the terminology, pulling things, blood diamonds and conflict items.
Ryan: you say still just today, right? We know that the industry banded together and developed something called the Kimberley process to help stem the flow of illicit diamonds into the global trade. It still happens in 2006. So at the end of the day, you, you can’t procure it on it. And frankly, by definition, when 30% of the world’s poppy, uh, world’s supply of diamonds comes out of Russia and is partially state owned.
Any diamond coming out of Russia is supporting what’s happening in Ukraine. Right now, any diamond coming out of Russia is by definition a blood diamond. Right? So if you don’t have the right controls in place in this industry, largely does not. You don’t know where that’s done necessarily came from, and there’s no guarantee.
That you’re getting something that was sourced in a truly responsible manner.
Andrew: all right, let’s talk numbers. And what’s the revenue so far, you’ve only been selling for less than a year.
Ryan: Yeah. We’ve been in market for at nine.
Andrew: Okay. What’s the
Ryan: So we, we launched, uh, we, we started with consumer pre-orders, so it was DTC only, uh, we shared this public rate, so I can, I can speak to it. We generated a little over $2.6 million in pre-orders. Um, there was some, uh, wholesale stuff mixed in there as well. So it netted out to shy of 3 million.
Andrew: online sales that we’re looking at
Ryan: oh, that’s correct. I would say entirely on sir,
Ryan: We are now just in the process of introducing our first wholesale program, we brought on a new VP of sales. Who’s been with the company just for a couple of weeks now. And, and we’re, uh, we’re, we’re very excited to be rolling that out in, uh, in advance of the industry wide trade show.
That’s happening in Las Vegas this summer,
Andrew: All right. Um, and then how much of that, have you sent out? How much of your orders have you fulfilled?
Ryan: I’d say, uh, probably roughly around.
Andrew: All right. Let’s understand how you got here. You’re a guy who worked in the jewelry industry. How’d you get in the jewelry industry?
Ryan: I tripped and fell backwards into jewelry. I was someone who was very interested in electric vehicles when I was doing my engineering undergraduate degree. And, uh, I thought I’d ended up working for a company like. Um, I graduated in the height of the recession and, uh, I’m like, you know, some of my classmates, I had a job lined up.
Um, I started working in the architectural home hardware space, um, developing and manufacturing jewelry for your home. So ornate door knobs and hinges, finials lock sets. Some faucetry. Shifting from a product development role into a manufacturing role, uh, built out a large format, metal casting facility for the company I was working for and oversaw all of our casting production work and manufacturing and product development are directly related, but they’re not the same.
And I knew my passion lied in product development. Um, so I. Started browsing the internet to see what other job opportunities might exist. And I found it pretty cryptic, a listing for someone with metal casting experience and experience with small metal findings and componentry. And I said, Hey, that sounds like something I might be well suited for.
And I think three or four weeks later, I was starting my first job in the jewelry industry as a product development engineer for this.
Andrew: Uh, and I read your LinkedIn profile. You are helping to create men’s jewelry there. Am I right?
Ryan: That’s correct. So David Yurman sells men’s and women’s historically, I mean, it was, it was a women’s line. They introduced the men’s line, um, you know, a little over a decade ago and, uh, it’s been wildly successful. So it was really exciting to kind of get in there somewhat early. Um, Yeah, there was this kind of transition that David Yurman internally as a company, went through where they started bringing on engineers and, you know, taking something that has largely been a very artismal process for millennials and turn it into something that’s empowered by rapid prototyping.
You know, whether it’s 3d printing or 3d scans. Tabletop milling. And that enabled us to do some really new and interesting things that were new in the industry. I think part of what I got really excited about, uh, with my time at David Yurman was introduction and development of products that used materials that were not previously.
So to the world of fine jewelry, um, composite materials, organic materials, uh, asteroid or meteorite, I should say once it lands, it’s immediate. Right. Um, so we, we, we’ve got to do some really interesting stuff on that front and really that’s where I cut my teeth.
Andrew: I could see how you’d enjoy it. Especially a person who wanted to work at a company like Tesla. One of the things though you told me before we got started is that the industry is kind of stuck in its ways intentionally. So right. The jewelry industry, the diamond industry specifically, how did it come across to you when you were with.
Ryan: I mean, if you’re not seeking mentorship in this industry, it takes a very, very, very long time to understand. The lay of the land, how things work. And by definition, I would, I would call this a very, uh,
it can be, it can be a challenging landscape to navigate. Uh, I joke sometimes the only thing transparent and jewelry are the gemstones. It’s it’s it was built that way. It was intentional. So, I mean, it shouldn’t be a surprise if that’s the way it is. And you know, a lot of the companies that hold sway over, you know, trends in the industry and have a lot of purchasing power and can ultimately steer, you know, the way we kind of go collectively.
Those companies have all been set in their ways and they’ve all done things the same way for a very long time. It’s an industry that’s just been ripe for disruption. And I think lab grown diamonds over the course of the last decade, I’ve really come in and in a big way and have shaken things up and people who were hardline, mined diamond only supporters 10 years ago have changed their tune.
And it’s at this point, it’s only a matter of time before you know, those, those other laggards, you know, come around. Um, and I think in that we see.
Andrew: Okay. And so we were talking about how you met somebody at this company who ended up being your co-founder. Dan, the two of you were talking about the industry in general. How did that lead to you coming up with the idea for either.
Ryan: So Dan and I said, you know, all of six feet from each other, when we were at David Yurman, he was working on the women’s line. I was working on the men’s line. I think we bonded over a mutual appreciation for motorcycles and fast cars and quickly became friends. In addition to colleagues, our first actual foray working together was while we were both employed for David Yurman, there was a component we were developing for one of our men’s bracelets that we could not find a supplier that was able to produce it.
And on one random day, Dan says to me, you know, I have an LLC, you know, that I don’t really use weekly. Become a subcontractor and we could produce this widget, uh, for David Yurman. I said, Hey, that’s a really interesting idea. Let’s, let’s run up the flagpole. So that was actually our first foray into working with each other.
We, uh, we would have manufacturing parties at my loft apartment in Dumbo, Brooklyn, and, um, you know, Saturday mornings we’d have some friends come over and, um, you know, we would feed them bagels and we would listen to music and we would manufacture these little widgets and, uh, in my apartment and that worked out really.
Andrew: then you sold it to David German under this LLC that he had.
Ryan: Oh, no, this wasn’t even, this was a standalone project. It wasn’t a business per
se. Um, it, it was
for, so it was actually, it was for a woven para cord, a bracelet that we had done, and we couldn’t find anyone to do this. Basically. It’s a flat mop, you know, and it would range from six and a half to eight and a half inches, depending on what size of the bracelet was.
And then the metal components would all be installed onto that. And we couldn’t find anyone that would manufacture it. I had developed. I have designed the, the, you know, the weaving and the process for sealing the nylon ends of the, of the rope. Uh, I was going to be involved in the quality control process anyway, to make sure that everything was up to snuff.
And I’ve said, I said, you know what? It makes sense if we just do this ourselves. So we literally had, I think it was, uh, four or five weekends in a row out of my apartment in Brooklyn. We did these little manufacturing parties and, uh, it worked out really well. We were able to hit a price point that our, our employer was happy with.
Uh, we made a little bit of money, you know, for our time and, uh, it worked out and that’s where I knew. I could work with them directly outside the confines of another company. And, you know, you fast forward, it was probably six years later, five and a half years later, I had started my I’d left. David Yurman started and sold my first venture back business.
And we were catching up on life kind of musing on different problems we had seen in the industry that I had left jewelry. That’s where I started my career. And then I went into. Hardcore software and hardware development and my outlook on the entire world having done that for half a decade changed. And I want it to apply that this is fuser.
So we were a smart helmet technology company. Well imagine taking Tony Starks Ironman. Taking all of that real interesting situational awareness technology that was built into this fictional device and take that and install it into a motorcycle helmet form factor. So we were building some of the world’s most advanced motorcycle helmets in of all time, um, full color eyes up display, uh, crash detection, emergency response,
Andrew: I think I saw in it
Ryan: Yep. Uh, yeah, we had, we had one of the first unlimited range, void based communication protocols for action sports. So, you know, when I’m riding my motorcycle with some friends, and if you were utilizing our communication platform, instead of being Bluetooth based where you, maybe soon as your quarter mile away, you lose connectivity.
You know, you get separated about five miles, our platforms.
Andrew: Oh, wow. How much did you sell it for?
Ryan: Um, we never disclosed the sale price. Um, so I, I believe that NDA is probably still active.
Andrew: What’s the phrase, is it life-changing money that you sold it for?
Ryan: Uh, no, I, for me. I don’t think, uh, would listen, we got a return for some of our investors and it was more of an apple hire type of thing. Uh, there’s much more to that story. Um, it was a, it was a good ending. Um, it wasn’t, uh, a home run
on the, on the, uh,
Andrew: What’s the
challenge with that. So I interviewed the founder of. I don’t know, if you know them. They also had this
Ryan: I know,
Ryan: I know Marcus.
Andrew: He’s an amazing person. Um, And I remember running through San Francisco, seeing that building that he had, that was just, I think, to sitting there with his, logo’s
still the sitting there, sorry.
Ryan: and I’ve been to the office. We almost bought scholar.
Ryan: Yeah. They obviously ran into some financial issues there at the end. And, uh, yeah, we almost, we almost came in and bought it, but when we looked under the hood there, wasn’t a lot of.
Andrew: There were, there were definite troubles in the interview, in the, in the business, which made the interview really interesting, but I still don’t understand why this is not an accepted built-in part of every helmet. Like why hasn’t this stuff taken off more? It makes so much sense. And still, no, one’s.
Ryan: So the group we sold our company to, they still own the IP without. Multiple pieces of that IP portfolio. I don’t think anyone would be able to really commercialize it. We have the best tech in smart helmets not to discredit what, what the scholar team did. Um, you know, we ended up bringing on their CML, uh, after a scholar kind of dissolve, we brought him on, he ended up working with us, you know, they did a lot of great things.
They certainly helped serve the broader, smart helmet concept in terms of building awareness. Um, the tech frankly, didn’t work. Um, and anyone who is a lifelong motorcyclist, uh, can tell you that having to divert your eyes down and take them off the road is horrible. When, when it comes to biomechanics, our eyes work much better at looking at, in your upper peripheral.
Uh, if you, if you were to look right above your computer screen right now, you can still see your computer screen kind of in your
periphery. But if you were, if you were to look down at your keyboard, you lose your, you lose your screen.
Andrew: it. Ooh, that’s weird to guess. So if I’m looking up at the ceiling right now, I can still see you moving your hands and smiling. But if I look down at my computer you’re right. I can’t. Okay. And so you went up, they went up, but still, I don’t see this built in. Why isn’t this just a standard
part of every cyclist
Ryan: major helmet companies, the major home companies that exist do not even have, they don’t have a single technical person on their staff right there. Their technical side is mechanical and materials. It’s not that they don’t have software engineers. They don’t have hardware, engineers. They don’t have optical engineers.
They don’t have a CTO who can even diligence.
Ryan: So we ended up working with several of them. Um, a lot of our revenue actually came from B2B stuff behind the scenes, more so than even just with consumers. Um, I will say they’re here in the U S uh, there’s an extremely litigious landscape within the world of power sports, um, motorcycle helmet manufacturers.
I have gone the way of the Buffalo, at least domestically. Uh, there are several here that are, that are still kind of doing it in a decent way. Almost no one manufacturers here, but there were people who would get into a motorcycle accident and die, and then their, their estates or their families would go in and Sue the motorcycle helmet companies because that helmet didn’t save their lives.
And there are extremely deeply rooted liability concerns in that model. So the big players are really not able to, to embrace. Fully. And at the same time, the startups that are trying to break into the field are having trouble developing and commercializing the technology in a practical manner. So it’s a matter of time before you see it.
There were a couple of companies that we’re working. I’m still keeping an eye on just because I did this for five and a half years. And you know, it was a big part of my life and, and, uh, The CEOs of a couple of those companies. And I hope that they get there. Um, mostly because I’d love to see them have to license some of the IP that we’ve developed and then sold off.
Um, I still have those patents, you know, framed on my wall. Uh, there’s a little bit of pride of authorship there. Um, I will say. Scaling that technology and getting it cost competitive is going to be a challenge. The motorcycle market in particular, uh, is a really interesting market because you’ve got guys who spent a lot of money on their bikes, a lot of money on their gear.
The amount of people that spend a lot of money on their helmets, even though that’s the thing that’s keeping them safe is strikingly small. You know, there are companies out there. Uh, Ruby was, it was a really well-known company. Uh, they had a whole bunch of issues that are unrelated to the brand and the helmets, but they were $1,500 helmets just because they had.
You know, suede and leather and really interesting materials and celebrities in LA were riding their motorcycles with Ruby helmets. They had a cool logo. Um, and if you’re willing to spend $1,500 on a helmet like that, maybe you should also be willing to spend $1,500 on a helmet. That’s got all this technology, but the amount of pushback that you got from, you know, the diehard motorcycle community was, it was just, this is way too expensive for them.
$500 is expensive for. It boggles the mind. You know, I, I know of guys who are, you know, lifelong riders who are as enthusiastic as anything who run $40,000 motorcycles and they refuse to spend more than three or $400.
Andrew: And then I see them with these really nice motorcycles and these really chincy looking phone holders. And that just takes away from the cool of the experience so much. All right. Um, Let me take a moment, talk about my sponsor, and then we’re going to come back into ether. My sponsor, as I told you before, it’s, um, it’s actually not even a paid sponsor.
Their sponsorship ran out, but I just love the people that over at lemon they’re company that helps you find developers. They could find you a developer within 48 hours. If you’re not happy with them, they’ll find you another one. And the reason that I’m doing this now, even though their ads ran out is because.
They’re a great company that happens to be based out of a Ukraine. And the founder has been texting me as he escaped Ukraine. He’s been texting and tweeting about what he’s doing to keep his company going. And one of those things is he’s continuing to pay his people. So if you’re looking to hire developers, contact him.
And he will help you find a phenomenal developer, despite what’s going on in the world. They still have great developers and he and his team, wherever they happen to be, we’ll find those developers for you. And if for some reason, someone on his team can’t work, you will continue to pay them. Throughout this difficult time, because he wants to support his company.
And so I thought I’m just going to continue to support you. Um, his name is Alex. We followed him in the tech industry as you went from zero to a million and then from a million so on and revenue, I think his latest goal was supposed to be 10 million and then. You know those war and he decided that he wasn’t going to be able to hit that.
You know what, Ryan, it seems like he might still hit it anyway, because so many of us just are supporting the company. And because the guy is not resting, he’s either going to collapse at the end of this or come out with this whole new. Way of thinking about challenges. All right. Either way, if you’re looking for a developer, his problems are not your problems, your problems are, you need to find a developer.
He will take on your challenge. In addition to all of his and find you phenomenal developer. I mean, really, if you don’t love him, you do not have to hire them. If you hire them and you’re not happy, they’ll replace them. All you have to do is go to lemon.io/mixergy that’s lemon.io/mixergy, and really Google them.
Look them up on Twitter. You’re going to see people have hired from them are incredibly happy, but a. People who know the company like I have are incredibly lucky to have them as friends. All right. Thank you, lemon. Just say thank you for sponsoring, but thank you for not sponsoring. Thank you for sponsoring back in the past, before all this happened, dude, you know the guy Alex from lemon, I said, what, what are you doing?
Why didn’t you leave Ukraine before? And he goes, leave it. I came back from Germany, from vacation to Ukraine. I had no idea this was gonna happen. So, yeah, so Florida by the whole experience, which also there, I’m now in Texas Ryan, and there’s so many people who are waiting for the end of days in whatever capacity that means the end of days could be religiously, which is less and less, or it could be lack of food the way there was it like, um, the early days of the pandemic, or it could be, the government can tell you not to, uh, that you have to be vaccinated.
And so they’re worried that they’re going to have to go and bunker down. So many people have these bunker down mentalities and they’re developing their, their. Life backup plans at home, really amazing, phenomenal entrepreneurs who I’ve interviewed. I talked to them in private they’re setting up their, their prepping facility.
Um, and I would laugh them off except I saw what happened to Alex. He just comes back from vacation and his whole life is turned upside down. So maybe I should have some extra rice and beans and other, other things prepared. You’re in New York, new Yorkers, aren’t preppers. There’s no room for that.
Ryan: I technically I live in New Jersey,
Andrew: It’s still the same thing. There’s
no room for
Ryan: yeah, I mean, listen, the. The hustle and buzz of life in New York, it keeps you in the moment. Um, plus I dunno if you’d have any room in the New York city apartment to store much of any.
Andrew: That’s what I’m thinking like is a new place we’re moving into as a few acres. You know what I think I could plant potatoes and onion. There’s just an incredible VC. We were talking in the early days of the pandemic and he goes, I’m going to be the person who prepares for the worst I’m planting potatoes.
I go, dude, you’re, you’re a VC who wouldn’t even dare to fly. Business class has gotta be first class or you’re going to plant potatoes. I got to go back and check and see if he ever did it. I don’t have the heart to bring it up and say, did you end up planting potatoes? Just in case I got to do that. Um, all right.
I love that a lot of this came to you from a book we were talking before we got started about that. Um, partially because truthfully I’ve been feeling a little bit, like all the reading I’m doing is not helping enough. Why don’t I just turn to YouTube for solutions to everything. And then I talked to you, I talked to other entrepreneurs and you have these major insights from reading.
What was it that you got what’s draw down the book that helped you come up with a new.
Ryan: So draw down is a, it’s an anthology. It breaks down all these different types of projects, both natural climate solutions and engineered climate solutions surrounding, uh, the removal of carbon dioxide and other greenhouse gases from our atmosphere. Um, at the end of the book, there’s a part that, you know, New things coming.
And, uh, and it talks about the climate works facility that was being built in Hinsdale, Switzerland, just outside of Zurich. A book was published in 2017 and that, and I think, uh, the tail end of 2017 is when, when that plant was commissioned and operational. Um, and here I am, I was reading it in probably end of Q1 2018.
So not terribly far after that. And I finally get to the end of the book and I read about this direct air capture technology and. I had no idea. We had ways of chemically removing CO2 from the air. You know, if we, if we know we can do that, what would stop us from just ramping that kind of technology up and solving the climate crisis like that.
And, uh, and ultimately. There are, there are economic challenges that it costs money to operate that equipment, um, comparable to other methods of removing carbon dioxide. It is more expensive. And then you have the challenge of doing something with that carbon dioxide so that it doesn’t escape back up to the atmosphere.
How do you permanently sequester that? Um, so you know, those two challenges were, were. It’s very real in 2018, they are still very real today in 2022, but some of that’s changing and, uh, and I hope that we’re going to play a role in that. And ultimately we came into this with that aha moment. Like what if we could take this abundant and harmful form of carbon that it’s warming the planet and transform it into.
A beautiful and covetable form of carbon that warms the heart. And it was literally on a phone call with Dan when we were, you know, riffing on ideas, surrounding challenges in the jewelry market that might have a business, you know, hidden somewhere in there. Uh, it was on that call where we got to talking about air quality.
I mentioned direct air capture and draw down and, uh, and you know, the. The light bulbs went off and, and we got off that call. And for the next week, I couldn’t stop thinking about making diamonds for mayor. And Dan calls me up a week later and he says, Hey Ryan, I can’t stop thinking about making diamonds from air.
And that was three, three and a half years ago. And here we are making diamonds from dinner.
Oh, it looks like you’re
Andrew: So. I’m trying to understand what would it take? I don’t know anything about this business. I don’t even know. I don’t know the first thing. Can you explain it to me in this basic way as possible? What does it take to get the carbon out of the air? And then what does it take to turn that into a diamond?
Ryan: So, uh, there are different direct air capture technologies, but generally speaking, you can think of it as, you know, almost a vacuum cleaner with a. But if you think of like a coffin filter when you’re making your coffee in the morning, um, that is stopping the physical particles from going through the filter
Ryan: direct air capture uses chemical filters.
So the air passes through this filter and that filter chemically bonds to the CO2 that’s in the air. So going in one side is ambient air from the atmosphere and coming out the backside of that machine is air minus.
And now the CO2 is stuck in this. Think of it as a spiderweb, right? It’s stuck there.
Ryan: The way this works in a number of different applications is you seal that filter in a vacuum chamber.
You pull all of the air out and the CO2 is still stuck to the filter. So now you’re in this empty chamber with this filter that saturated in CO2, you can heat up that. And as soon as you get to a hundred, see the bond between the CO2 and that filter breaks. And now all of a sudden that chamber, instead of being filled with a vacuum is now filled with a bunch of CO2
and you can
Andrew: in there, in there. Okay.
Ryan: can pump it right into a tank.
And now you’ve got a tank of CO2.
Andrew: Okay. All right. And so that they were able to do you, before you ever got on the scene, Okay. And so then now that we’ve got the carbon dioxide, the CO2.
in a canister, what does it take to turn that into a diamond?
Ryan: So, uh, there are two ways of making a diamond in the laboratory. Um, both traditionally have relied on fossil carbon, so that fossil carbon comes in the form of graphite, which is dug up from the ground or methane, which is sourced from fracking or from, uh, the crude oil refinement process. So you can, you can use those or you can take the CO2 that comes from the atmosphere that was generated from burning those types of carbon, uh, hydrocarbon sources, those fossil fuels.
And we’re essentially taking this old air pollution. That’s up there. We’re, we’re taking it down through that process. I mentioned earlier, and then we’re converting it into those things. So it’s reverse. Essentially, um, when you burn methane, it releases CO2 and water vapor. What we do is we basically take that CO2, uh, and then we take hydrogen and then there’s a reagent and we are able to reassemble, uh, the, the.
Uh, components into a new compound. So you have what comes in is CO2 and hydrogen. And what comes out the other side is , which is methane and OTU, which is just elemental oxygen that gets vented off to the atmosphere. So our process releases pure oxygen to the atmosphere, which is good for you, me and anyone else who has lungs, and then we’re left with this ch four.
So essentially eco method methane that is derived from the atmosphere 100.
Ryan: can then
Ryan: correct. Every Adam that makes up every ether, diamond comes directly from the atmosphere. So it goes from the air into a bottle of CO2. We take that CO2, we convert it into our eco methane, our hydrocarbon, and that hydrocarbon goes into the chemical vapor deposition reactor.
And this is where this part is really cool. It’s basically a near vacuum inside this chamber. You’ve got some small little thin slices of diamond and they’re there to serve as a blueprint of sorts that will teach the rest of the carbon. That’s about to be introduced into this environment, how it needs to assemble itself into this crystal lattice.
So you’ve got these small little postage stamp seeds. You’re pumping that hydrocarbon gas that I’d mentioned our eco methane, you bombarded with, uh, essentially microwaves. The microwave’s are tuned to a frequency that excites the hydrogen and the hydrogen turns into plasma. So now you look in this window and there’s a glowing ball of plasma in the chamber, and it’s being fed by this ch four.
That’s getting pumped into the chamber. When the hydrogen turns into the plasma, what happens to the carbon? That was part of that CA. It starts to precipitate down like snow falling on your back porch during a snow storm.
And just like you can watch the snow growing on your porch over the course of a few hours or a few days that carbon builds up.
And at the end of the month, what started as this small little postage stamp is now. Of raw carbon, crystal, and carbon. And you can take that cube. You slice that seed off. You use that for your next batch. You take the rest of it and you cut and Polish it into the beautiful diamond gemstones that we all know.
Andrew: And then how much energy does it take to create that? And what does that do to the.
Ryan: So it definitely does take a lot of energy. And this was one of the gripes I’ve had with lab grown diamonds in general, where people try and just position a lab, grown diamond as an environmentally sustainable alternative to mined diamonds at face value. And it couldn’t be farther from the truth. Most lab grown diamonds that are produced on planet earth are coming from parts of the world like China and India, where they’re not using.
Zero emission energy. They are burning coal and there are significant emissions related to that. And happening in areas that have underserved local energy grids to begin with, and those electrons could be going to do other things that would have probably a greater net lift for. Society in those regions.
Uh, we are extremely proud to be using zero emission sources of energy, um, and going beyond just our own, uh, baseline need. We are investing in additionality and really what that means is we’re taking some of our profits and we’re helping build new solar plants around us. We have a great partner called clear loop.
Um, we essentially become a financial partner and they are building new solar farms in parts of the U S that are underserved from a renewable stance. And this was phenomenal because not only does it bring jobs to areas where going to jobs might be needed. Um, but you know, real spend think about like, you know, you’re building a large solar farm.
You need to put up a fence, there’s a million dollar fencing contract that comes with that. So bringing money into these areas like Appalachia, um, you know, that has a history heavily rooted in coal mining. We now can say, Hey, you know, maybe you were never really in the coal mining industry, you were in the energy sector and this is just a different type of energy.
And we’re helping, you know, kind of get boots on the ground in those regions.
Andrew: using, you’re only
using, what solar wind, that kind of thing to produce your
Ryan: Yeah. There’s a little bit of nuclear. So we’ll use zero emission as, as the phrasing. It’s not nuclear energy is not renewable by definition, but it is a zero emission energy source. So we say zero mission.
Andrew: All right. So I’m with you. What about this? Did you talk to customers to see if they were interested in this? How did you know that if you were able to pull this all off and I’m curious about how you pulled it all off technically, but how did you know that there’d be a market for it? Or did you
Ryan: Like any good entrepreneur early on. I diluted myself into believing that there’d be a market.
And I knew in my
heart of hearts, I had a gut feeling.
Andrew: Sorry, there’s a bit of a lag here, but even with what happened before, knowing that it made so much sense for motorcycle riders were investing in their bikes to spend a little bit on their helmet And they didn’t, you still, that you still had that same entrepreneurial delusion.
Ryan: I did. Um, I think you have to have that, but this time around. We spend a lot more time, validating the demand for something like this before actually going and devoting time and resources and energy. Um, and we did that just by leveraging our networks, talking to folks out there. Most people didn’t believe that this was going to be possible, uh, which, you know, obviously made it even more exciting when we were able to crack the code.
But, uh, there was interest and we knew inherently firsthand from our time working for luxury jewelry brands that. Lab grown diamonds, regular lab grown diamonds that are made from fossil carbon, uh, that do not bring any real true sustainability offering to the table. Those are going to be a really difficult, if not impossible things for luxury brands to adopt, because they’ve been positioned as an inferior product.
And that there’s a, there’s a. It can ruin from, from a, from a perception standpoint with consumers, right? If you are a consumer and you have a high perception of a luxury brand and you’ll have a lower perception of a regular lab grown diamond, those things don’t jive. Well. So ultimately we know that the unequivocal future of this.
His lab grown in, in nature. Uh, I mentioned peak diamond output earlier. We know over the next 18 years, half of the world’s supply of mine, diamonds is going to disappear, but we can’t make lab grown diamonds fast enough to back. So we’re going to try collectively humanity is going to try because you know, there’s significant and growing demand every year for gem grade diamonds, for industrial diamonds, we can come in and provide a luxury offering to those heritage luxury brands that would otherwise not have been able to easily adopt lab grown diamonds without running the risk of sacrificing some brand equity.
And that’s, I think the value proposition we provide to the upper end of the.
Andrew: Got it. You’re saying that there’s going to be fewer and fewer diamonds available because we’ve already exhausted half the world’s diamond supply. That means prices go up. That means a lot of people are going to be priced out of diamonds. That means the.
luxury brands still want to have a replacement at, at their current price.
And the current lab grown diamonds don’t have the brand cache that they’re looking to be partnered with. That’s what you noticed.
Ryan: There’s no story with regular lab grown diamonds. There’s there are completely devoid of a story.
Andrew: And that’s where if I could feel good about having a diamond that was made out of thin air and made the world a better place than I would feel better about. Spending a little bit more on that because your diamonds are expensive. I mean, we’re not
Ryan: Oh, they’re, they’re certainly expensive.
Ryan: And, and nor do I think they should be. Um, everything that goes into what we’re doing is a lot of work that goes into what we’re doing. Consumer advising through diamond. Isn’t just buying that diamond. Yes. There’s a beautiful gemstone that they can show off and the door and their bodies with, but there’s real impact that comes with it.
And you know, that that’s a big factor into what we’re doing and our mission, I, I say quite often, uh, we’re, we’re not a company with a mission as much as we’re a mission with a company, everything that we do from a. Commercial perspective serves the mission of having a true environmental impact. And that’s something that I don’t think others in this market really bring to bear.
Some might purport themselves to care. We say, put your money where your mouth is, and no one’s doing that. Like we are.
Andrew: I think when I found out that I was going to interview you, I said, let me see what it would cost to get a diamond. Maybe I get a cheap one for Olivia, and then it’ll, it’ll look expensive. I didn’t realize by the way, until after I got married, how much for the rest of your life, people are going to look at that diamond and kind of size you up.
And I do that for people, not on a regular basis, but some of my friend’s wives have giant fricking rings. And I noticed, and I’m not a jewelry person. And it’s like, uh, like my car is going to lose value and it’s going to look ugly in a few years and I’m going to dump it for the same price. You end up with a ring, that’s going to blow people away for the rest of their fricking lives.
And then judging by what I saw in the movie, yellow and the TV show Yellowstone. My kids wouldn’t even probably dig up my wife to get the ring, to give it to their, to their spouse. It’s that valuable in that emotionally connected. I would just spend like three, four times more on the ring. If I knew is that, that impactful and that meaningful.
Ryan: Yeah, we’ve seen, we’ve had customers come to us and say, you know, I, I want to upgrade, uh, there’s sentimental value in, in the original rings. So can you just repurpose the diamond and make a pendant necklace? Um, and then we’ll do a new engagement ring and some will keep it and wear it for day-to-day use and then may have a nicer, newer one that they wear when they go out for dinner or to an advantage to a party.
So, you know, we definitely see some, some, uh, some trends where, you know, folks look to, you know, Re-invest in a, in a new engagement ring later on, because there is an element of keeping up with the Joneses. That’s just built into this kind of consumerist society that we live in. and
Andrew: I, if I knew I would have taken it more seriously, I mean, I’m not driving my car into your house. I might as well buy the ugly car that I care about and then pay for the nice ring. That’s going to show up in your house and in everything that we do. All right. Let me take a moment to talk about my second sponsor.
It’s a company called send in blue. It’s an email market, actually. I say email marketing, but Ryan is so much more, uh, they do SMS marketing. They do landing pages. They basically have the whole package. And the reason that I’m talking about them is that email is an essential part of all of our businesses.
But the problem with existing players is they’re either super expensive because they have all the features or they start off really cheap. And you say, all right, I’m going to sign up for the one that had the cute animal in the commercial on NPR. What happens a few months later, or a few years later when your email gets email list gets really big and then their prices start jacking up and you realize that’s how they’re paying for all those commercials, because they keep jacking the prices on people as they get bigger, or you want more features.
And they say, well, no.
we can add those great features, like segmenting so that you send a different email based on whether or not someone bought or what they’re interested in. We can’t do that because that would confuse. Average user and it’s built for the average users. Now you’re stuck. Can I say stuck because it’s hard to move your email list to a different provider.
Anyway, that’s why I say start with the right email provider from the beginning. Do your research. I know you may not have heard of sending blue before I started the mapping about them, but there’s a reason why I’m yapping about them. My audience does research. They do sign up. And the reason that they’re signing up is it’s phenomenal software allowing you to customize the way you reach your audience so that you’ve got a sticky relationship.
But one that actually makes sense to them. And then the prices are reasonable at the beginning, and they’re even more reasonable as you continue. If you want to start out and get a break on the price, even more go to send in blue.com/mixergy, send in blue.com/mixergy. All right. So Ryan, a lot of people would read that book nod.
This is a great idea. Somebody should do this, but maybe Elon Musk in some point can do it. How do you get from reading? To saying, I know the process I can put, I can put it together.
Ryan: Well, I literally walked to my bedroom closet. As soon as I got off the phone with Dan, I have every single one of my engineering textbooks for my undergrad program. I never sold my books back. I bought them at such inflated rates. I said, I’m keeping these forever. It’ll be the start of my library. Uh, I pulled out one of my old chemistry textbooks and I, I went right to, uh, you know, a section on.
Uh, 160 year old chemistry, uh, Subotica reaction that that was the start of it all. Um, but I had, I had the wherewithal enough of an engineering and materials background, so to start, um, what we ended up commercializing the technology is remarkably similar to literally what I sketched in my, in my notepad that day.
Um, you know, that’s kinda how we got started. But that together, I went to my brother as a chemical engineer and I said, Hey Jim, can you take a look at this and tell me if I’ve got something. Um, he immediately recommended that I reach out to, uh, Anthony, who was a classmate of his, who I met first time, probably 10 years ago, right around the time I met Dan and I remembered him to be wildly intelligent.
I said, oh yeah, we’d love to, I’d love to chat with Anthony. The next thing, you know, Anthony was telling me, yes, this is going to work. I think you’re onto something and I’m ready to quit my job. Bring me on as a partner.
He is now our third co-founder.
Andrew: And then how much does it cost to put the whole system together to be able to create these diamonds?
Ryan: I mean millions of dollars,
uh, multi, multiple, I wouldn’t call it tens of millions. We’ve raised, we’ve raised about $21 million. Um, and lack of the company, you know, the, the initial kind of like pre-seed funding. Uh, Dan and I really were coming out of pocket for, um, then we raised our first round, which is a, you know, a $2.7 million seed round.
I mean, it followed by a larger series, a but most of the initial funding from the founders and then the seed round got us to the point where we could make diamonds extremely low volume, but make decent diamonds and prove that the science works. And from there, you know, that was a major milestone that enabled us to go and attract.
Andrew: Once you prove that you can make it, you were able to raise the next round and then it was time to show that you can sell it. How
Ryan: Um, and we are now aggressively scaling up. Well, we started with a consumer pre-order launch. Uh, we launched in December of 2010. Uh, the day we launched, we recovered in Vogue. The day after we launched, we recovered in Forbes. Uh, the press we on in that first month was extraordinary. And, you know, that drove a ton of organic traffic to our website.
And, uh, and that’s how the whole thing got started. So it’s, it’s been, you know, very DTC focused and, uh, we’re, we’re finally now kind of broadening, uh, you know, our. Efforts and, and introducing wholesale, and we’ll be working with independent jewelers and other brands, uh, you know, over the course of this year and the, today.
Andrew: How, I guess, w what were you doing to get so much press I’m looking right now at the Forbes article on you? It’s got a nice picture of a giant D is that a diamond created by you? The really big fat one?
Ryan: there are now at this point, multiple articles on us from Forbes. So I don’t know which one you’re referring to, but, um, it, we may have supplied DMS. I mean, there’s, there’s always some help, but you have to, you have to do a lot of that internally. Um, Vogue, for instance, you know, the first major piece of press we got.
Um, I secured that piece of myself. Um, I knew someone who was with Conde Nast. Um, we started chatting, uh, I had a. Writer in mind, you know, I’d done my research. There’s a lot of value in doing that. Um, there’s also a lot of value in having great PR partners, for sure. It’s a part of our arsenal. Um, you know, definitely a part of our strategy.
And, and I think, you know, you can have all of those pieces, but you still need a really cool story for people to be interested. And I think that’s the one thing we haven’t seen.
Andrew: Now that you’re going to go wholesale. What’s what’s the process there.
Ryan: So, uh, we, we just brought on a new VP of sales who has been in the industry, has a book of business. He’s got a Rolodex we can draw and, uh, and that’ll give us an opportunity to get out there with select retailers. Um, we’re not gonna have our own retail footprint just yet. Uh, that won’t be too far out into the future, but you know, at the end of the day, starting with the right retail partners.
And, uh, right now we’re having some conversations with some really interesting kind of tier one brands who are interested in using our diamonds for their collections and their products.
Andrew: And I guess what you were telling me before was this is a small industry. So if you’ve hired someone who sold into the industry, they know a big number, big percentage of the people who are there that you want to reach. And if they’ve got relationships and they’ve sold could sell yours,
Andrew: All right. I see. You’re just using a Shopify store. Like, I feel like the most basic part of this whole business is the website. The hardest part is creating the diamonds. How long does it take to do it?
Ryan: Um, if it was linear, um, depending on the size of the stone. Call it about 10, 10 to 12 weeks. Uh, we do them in stages. So w w we’ll batch process, you know, CO2 and then we’ll batch process to C H four and then we’ll batch process the diamonds. So, um, I mean, it could be as little as probably eight weeks, if it was completely linear and everything was vertically integrated on, you know, we took transit times out.
Um, but roughly about three months from when carbon was polluting our atmosphere to being warm,
Andrew: Right on. All right. Hey, you know, before we started, you were telling me about how you used to, like, you were an entrepreneurial from a young age. You Steven have lemonade stands. I’m going to take my kid and do more lemonade stands. Now that I see how, first of all, how much he wants to do it. And second, how many entrepreneurs that I’ve interviewed have had these little businesses when they were younger?
Do you feel that influenced you that it did it foster more of your creative entrepreneurial energy or not? Or was it just a thing.
Ryan: Certainly fostered.
Ryan: For me. I mean, this is, I never sought out business ideas as much as they’ve just kind of materialized in the front of my brain. Um, lemonade stands for such a really easy concept for me to wrap my head around at five years old. And I recruited all kids from the neighborhood to help.
And by the time we were nine years old, it was, we had a circuit in the driveway. It was car washes
and little. Oh, yeah, come in one side and out the other. And at that point, my younger siblings, you know, we were, they were a little older at that point. So instead of employing like the older kids from the neighborhood, it was my brothers and their younger friends.
And, you know, I was probably not paying them well enough. And then pocketing, you know, a lot of the money and, you know, I was flushed at nine years old and my mom was like, where, where did you get all this candy? Well, mom, I made a lot of money with the carwash. It became buying and selling and trading Pokemon cards and game boy games.
And there was one of my first kids in town to buy a DVD or tablet, DVD burner. And I was the kid who was bootlegging videos in high school, and there was always something I was doing to make, you know, to make money and embrace my entrepreneurial drive. And, um, I lost track of that a little. Uh, when I was focused on my engineering degree and then all of it, I was taking them.
So I actually went to school for finance for two years, decided that my real passion was engineering. Um, I wanted to switch over. Our school. And I went to, I went to a small Jesuit school in Connecticut, and while they had the oldest engineering program in the state, they weren’t really equipped for anything, but a four year track.
And I had already been in college for two years and I did not want to stay for another four. So I basically had to beg and plead with the Dean to allow me to do a modified schedule level, allow me to take a four year program and do it in three. So for the next three years of my life, I was doing 21 credits a semester, you know, working.
Insane hours just on my classwork. And then I was also playing a sport year round. So my, my, I had no bandwidth. Have a business to have. I mean, we did, I did a couple little things here and there, but really nothing that was, um, nothing that stuck. And then I graduated and I had student loans to pay off and I had to go get a job and I didn’t know anything about startups and it wasn’t until 20, very into 2013 into 2014.
Um, you know, when I left David Yurman and started fuser that I got to really sink my teeth into startup life and found my home. This is where I.
Andrew: And now you’re even more bringing it all together with ether, like your scientific brain, your entrepreneurial brain, your creative side, the whole thing. Um, all right. I guess the best thing that we should do, if anyone’s curious about this, they should go to it’s ether, diamonds.com. I write about the.
Andrew: All right.
And I want to thank two sponsors made this interview happen. The first is lemon.io/mixergy. And the second is what was the second. Oh, send them blue for email marketing, send in blue.com/mixergy. All right. This is phenomenal. I feel like at some point we’re going to look back at this moment and like, what’s this.
So Swarski was the, I can’t pronounce them. How do you pronounce them?
Ryan: Swarovski. And you’re not the only one
Andrew: Uh, they make
Ryan: when my wife listens to this shit, she’ll kill me for saying, but, uh, she has the same, uh, you know, trouble with that. We’re in. So you’re not alone.
Andrew: But I remember that there was a period there where they were not a brand name. They didn’t make things, they were part of other people’s products. And then at one point they said, we’re going to become a brand name. And I thought the nerve on them, first of all, they’re not making precious. They’re not selling precious stones.
And number two, they’ve got this name. That’s just so hard to pronounce. But now they’ve got retail outlets. They’ve got a reputation, they’ve got a name and I’m the one who should be ashamed that I can’t say it instead of, you know, them for sticking their name on a, on a brand. That should be a little bit more, I don’t know, easier to pronounce.
They’ve just done. Amazing. And I feel like I remember still the first news story that I saw about them going out there. And I feel like this is going to fit in the same spot in my head. The first story, the first time I got to meet the founder either. And at some point, hopefully you’ll and I expect based on everything I’ve seen, you’ll be as ubiquitous, if not more right on.
Ryan: Thanks so much,
Andrew: You bet. Thanks. Bye Ron.