0:00:00.6 Kurt Baker: What does it take to fund the future of deep tech and drive innovation that transforms human and planetary health? Meet Sean O’Sullivan, managing general partner of SOSV, a global venture capital firm with $1.5 billion in assets under management, a pioneer in computer-based street mapping, and co-founder of MapInfo. Sean has spent decades backing visionary founders tackling the world’s most pressing challenges. Under his leadership, SOSV has become the number one most active investor in climate tech since 2017, with top portfolio companies valued in the billions. Beyond venture capital, Sean is a committed philanthropist directing millions to education and humanitarian causes. Please welcome Sean O’Sullivan.
0:00:57.4 Sean O’ Sullivan: Thank you, Kurt. That’s a very generous introduction.
0:01:00.2 Kurt Baker: Thanks for coming back. And he’s an alpha buddy, where we work out occasionally together, at Lifetime.
0:01:03.9 Sean O’ Sullivan: That’s right. At Lifetime Fitness, working out in the mornings.
0:01:08.2 Kurt Baker: Yeah, trying to keep the resistance training going along with all the other fun stuff we do.
0:01:13.2 Sean O’ Sullivan: Exactly. You’ve got to keep in shape for the long decline ahead.
0:01:19.0 Kurt Baker: Well, that’s a little depressing. [laughter] I want to stay level and then just fall off a cliff.
0:01:25.3 Sean O’ Sullivan: Yeah, that’s fine with me.
0:01:26.2 Kurt Baker: I just wanna go, boom, done. End of story. Sign off, close the book, lemme go.
0:01:28.5 Sean O’ Sullivan: I do not need to live to be 100. No way. I’ll be fine. Just give me another 10, 15 years.
0:01:34.5 Kurt Baker: I’m good. I’m happy. So you were on the show before, which I appreciate. So what inspired you to focus on the deep tech? And what do you think sets you guys apart from everybody else out there?
0:01:48.8 Sean O’ Sullivan: Well, there’s a number of things. There’s a lot of things that set us apart. I could start with what sets us apart. Most VCs, you go into their offices, they’ll have a boardroom where people make pitches and they’ll have cubicles where the analysts work. And that’s it. What we have is we have physical co-working spaces that have laboratories, biology labs, chemistry labs, physics, electronics, maker space really, for the world’s top tech companies to get grounded. It’s a university research facility. But we run it as well as provide a lot more talent than your average VC. So, your average VC may have a technical background, may have started a multimillion-dollar multinational businesses like our general partners have done. But the difference is that we are focused on deep tech and we really need to… Because we start at the very beginning of a company, we have to help make sure that their foundations are really strong on the technology side and that they get to prototype and they get to physically working products quickly. We have a team of about 100 people. That also is a differentiation between SOSV and other VCs.
0:03:15.9 Sean O’ Sullivan: Most VCs are maybe two or three partners and maybe up to maybe total of 10 to 20 staff. That would be a big VC. But we have an order of magnitude more than that because we have a lot of engineering talent that we bring to the party as well. We have a studio style setup rather than a traditional VC. It’s not a normal VC at all. Not only is it very, very rare, it’s really no one else does it.
0:03:50.5 Kurt Baker: As you described that, I started envisioning a university, an MIT or somebody like that. I started getting this vision of it. You sound you’re a bridge between academia and the street a little bit, are you… Is that kind of…
0:04:04.7 Sean O’ Sullivan: Yeah. It’s not just for academia. And you do have…
0:04:09.0 Kurt Baker: You do like studying and you sound you’re doing research. You sound you’re doing innovation and things like that.
0:04:12.3 Sean O’ Sullivan: Well, we to take things at the point where maybe there’s been five or 10 years of research into the area already. But they’re really ready to bring it to market. So, it’s the commercialization stage of that rather than just the research. Sure, there’s going to be fundamental discoveries that are made even in our labs and beyond. But these are products that can be brought to market. Now, sometimes it’ll take years before they’re really getting to millions or hundreds of millions in revenue. But we’re in it for the long haul. But we like to make sure that the company is already differentiated enough, already has some prototype, has already built something before we back them. And it doesn’t need to come directly from universities. About 44% of the founders we back do have PhDs and they come from postdoc programs. But there’s also people that never went to college. That started a company or they went to college, they dropped out to start a company and they have really compelling technical skills. But it requires a tremendous degree of technical skills to really advance the businesses that we do in deep tech.
0:05:31.4 Kurt Baker: Okay, so you keep mentioning deep tech. So just so our listeners know, can you describe exactly what does that mean? There’s all kinds of tech out there.
0:05:38.7 Sean O’ Sullivan: Yeah, there is.
0:05:39.4 Kurt Baker: How do you differentiate? What does that exactly mean?
0:05:41.6 Sean O’ Sullivan: Yeah, so deep tech implies that there is a level of fundamental surprise…
0:05:49.3 Kurt Baker: Okay. That’s interesting.
0:05:50.6 Sean O’ Sullivan: In what you can do. For us, the regular tech is social networking, marketing, e-commerce, marketplaces, all the stuff you can do, slopping some software together and going out and winning in the market. And that’s pretty cool stuff, too. And there’s nothing to be wrong with that. And about 90% of all the businesses that are backed by VCs are focused on software, really some kind of thing, even AI. And AI, you may say, okay, AI is more deep techie. And it really, it is because it’s still being… There’s a lot of discoveries being made in AI right now. And about 40% of the teams that we back have AI in them, but we always have a physical component as well. The companies that we back have the have either chemistry or biology or physics or electronics real physical world changes. And that’s why we have become one of the world’s most active investors in climate tech, is because if you want to make a difference in the decarbonization of the planet, you’re talking about physical world outcomes in the first place.
0:07:15.6 Sean O’ Sullivan: So all of the things that we do are especially helpful for creating the new means of manufacturing so that we can still live in an abundant world and still have the things that we’ve grown accustomed to, the food, the housing.
0:07:33.2 Kurt Baker: I food like by the way.
0:07:34.1 Sean O’ Sullivan: Yeah, food is good. [laughter] I rely on that. But to be able to have those things and still not create the greenhouse gases that are choking the planet.
0:07:47.9 Kurt Baker: Wow. So it sounds you guys are working a lot. Can you give me an idea? Can you general… I don’t know if you can get specific or not. But what kinds of things are happening? It sounds you have a lot happening. And I know innovation is like, we’re in one of those crux where things seem to be iterating much, much faster. So I was just curious about what kinds of things do you see happening moving forward and what you guys are working on? Can you give me some ideas on those things?
0:08:14.2 Sean O’ Sullivan: Yeah, a couple of things. And I’ll make it really concrete just so people can put their arms around it.
0:08:20.6 Kurt Baker: Don’t do the PhD talk. Do more of the common person talk.
0:08:24.2 Sean O’ Sullivan: Yeah, exactly. So you mentioned food. So food actually contributes to more than 20% of the greenhouse gases that are made. In particular, animal agriculture is the one that we look to is one of the things that’s emitting immense amounts of greenhouse gases, in particular methane for cow production, et cetera. So that’s a challenge because we now have 8 billion people living on the planet. And if we had stopped at 2.5 billion people, then we would not have greenhouse… We would not have global warming. It would not be happening. Mankind would be irrelevant in the equation. It’s just because we kept going and then we kept using the means that we use to produce energy, which is generally petrochemicals. So that petrochemicals, those coals all that type of thing. When we talk about how do we… Well, let me get back to what do we produce. So we have companies that instead of producing food using animals, produce food in bioreactors. So you can produce milk, for example, without cows. And so that’s a really great way of reducing the methane impact of cows on the planet. And actually you can reduce just by reducing the overuse of cows for both our meat and for our milk, you can reduce the impact something like 15% of our greenhouse gases go off. You can go to close to zero.
0:10:10.1 Kurt Baker: I’m just afraid to ask this, but how do you do that?
0:10:13.0 Sean O’ Sullivan: Oh, yeah. Have you ever been to a beer hall where they make their own beer?
0:10:18.6 Kurt Baker: I have.
0:10:19.4 Sean O’ Sullivan: So you know what a bioreactor is.
0:10:21.2 Kurt Baker: I guess so.
0:10:22.1 Sean O’ Sullivan: It’s those vats that are in the beer hall and you feed it in inputs, hops, and then there’s yeast inside the vats. So the yeast is the bioprocessing that the hops get into. And the output that you get is beer. It’s as simple as that. So we have instead of putting yeast in there… This was actually figured out. My mom was a diabetic, so she had to inject insulin into her body every day. And the output that you want is insulin for a diabetic. When your own body can’t produce it, what they used to do back before they used bioreactors to produce insulin is they used to slaughter pigs and cows and then take the pancreas, squeeze out the insulin, and then you’d inject…
0:11:10.9 Kurt Baker: Sounds like a lot of work.
0:11:11.9 Sean O’ Sullivan: They put it into a nice clean bottle and inject that in. But it always had contamination problems. It always had other sorts of issues. So the challenge there is how do you create a new process to manufacture food, pharmaceuticals, et cetera, without using the original animals? And I’ll leave you there for a commercial break.
0:11:44.7 Kurt Baker: Okay. Yeah, that’s fascinating.
0:11:48.1 Sean O’ Sullivan: So how do you…
0:11:49.1 Kurt Baker: Are we going to milk halls now? Are you going to go down there and make chocolate milk and regular milk and strawberry milk or whatever? Is this going to be a thing?
0:12:00.7 Sean O’ Sullivan: No, so you can actually just ship it into grocery stores just like you…
0:12:06.4 Kurt Baker: So now I’m envisioning where you order the “yeast” or whatever it is, and I have this little machine in my kitchen, and I throw this in there like, “Yeah, tomorrow morning we’ll have a quart of milk for you, honey.”
0:12:20.1 Sean O’ Sullivan: So the way it works is if you take the genetics of what happened… In terms of my mom getting human insulin, and that happened in the mid-’80s. So she was able to inject human insulin in, but how do you do that? Do you have to slaughter humans, take out their pancreas, drain it of blood, drain it…
0:12:37.0 Kurt Baker: There might be some downside to that process.
0:12:38.7 Sean O’ Sullivan: Downside of that. People don’t like it when you do that. So what you do instead is you take the genes of the human body from their DNA that actually produce the insulin, you put it into a host organism like a yeast-type organism, and then it takes the inputs, which is sugar or whatever, that power the organism to produce whatever output you want. So this used to be done…
0:13:05.0 Kurt Baker: I didn’t know you could modify this stuff.
0:13:06.4 Sean O’ Sullivan: You can do it whatever you want. This is all programming the cell.
0:13:10.8 Kurt Baker: Programming the cell.
0:13:14.8 Sean O’ Sullivan: Yeah, so this is what…
0:13:15.0 Kurt Baker: You’re blowing my mind here, you know that.
0:13:16.1 Sean O’ Sullivan: Yeah. So this is how it’s done. Well, this is how it’s been done for decades, but just for the pharmaceutical sector. So instead of doing it and using it just for pharmaceuticals, which we’re here in New Jersey, there’s just loads of people that know how to do this, and instead of just producing human growth hormone or Viagra or insulin or whatever it is, these high-value proteins, you get the other proteins. So you get milk proteins. You get whey and you get casein and things like that, and all the other proteins that are made for eggs and things like that. And you can produce all these things in bioreactors rather than in animals. Now, you can do that with 30 times less environmental damage.
0:14:01.2 Kurt Baker: Now, can I tell the difference as a consumer?
0:14:04.5 Sean O’ Sullivan: You cannot tell the difference. And in fact, the difference that you would tell would be on your waste-line, because you can also program it so that you don’t produce waste proteins. So there’s something in milk called lactose.
0:14:20.9 Kurt Baker: Oh, sure, people are lactose intolerant.
0:14:22.5 Sean O’ Sullivan: Yeah. Well, lactose is a sugar, so it has lots of calories, but it’s actually a tasteless sugar. So there’s no benefit to actually having it bulk up your milk. So you end up with less calories in a quart of milk if you don’t add the lactose back in. One of our companies, Perfect Day, had the leading ice cream brand in the United States, most rapidly growing brand for several years when they produced ice cream in this process which is any output you can create. You can create cheese.
0:15:02.6 Kurt Baker: So how nutrient-dense is this? Because I know you get nutrients…
0:15:04.7 Sean O’ Sullivan: It’s the same. It can be exactly the same. You can design it so it’s more mutrient-dense. So it’s designable food, but it is not genetically modified food. It is the exact same food, the exact same proteins that you currently eat, but just made in a different way without requiring the animal. So that’s an example of how you can, in one sector, reduce the greenhouse gas output by 30 times. So suddenly instead of… If you were able to do that across all the sectors, if you could change our means of manufacturing, not just in the food sector, but also in the energy sector, also in the transportation sector, also in the…
0:15:53.6 Kurt Baker: You do this in energy and wait.
0:15:56.5 Sean O’ Sullivan: We do, but not with bioreactors in all cases. But in some cases you you can make biofuels and things like this efficiently. And they’re not made efficiently now. They’re made very inefficiently now.
0:16:09.1 Kurt Baker: So how does the economics of this work? I get a cow, I throw them in the pasture, it comes back, I get whatever.
0:16:15.5 Sean O’ Sullivan: So you can make milk for four times cheaper than a cow can make milk.
0:16:20.3 Kurt Baker: So why aren’t we all making milk that way right now?
0:16:22.5 Sean O’ Sullivan: Because it takes a while to scale up the manufacturing.
0:16:26.7 Kurt Baker: Okay, so is that part of what you’re doing? You have proof of concept, it works, but now you have to do it on a large scale.
0:16:31.6 Sean O’ Sullivan: We have proof of concept it works, now we need to do it on a super large scale. And that takes several decades, actually, to be able to produce the billion… There’s basically, I don’t know how many cows are in the world, it’s probably a billion or something. I don’t know. It’s a lot. It may be not that many, but it’s certainly close to it, if not that many. And there’s 70 million chickens in the United States that are killed every week for us to eat. Even though there’s only 350 million people.
0:17:03.9 Kurt Baker: I guess we eat a lot of chicken.
0:17:04.8 Sean O’ Sullivan: Well, and our dogs and cats do, too. They eat 40% of the chickens.
0:17:09.3 Kurt Baker: Do they really?
0:17:09.8 Sean O’ Sullivan: Yeah, that we kill.
0:17:11.5 Kurt Baker: I did not know that.
0:17:12.3 Sean O’ Sullivan: For cat food and dog food and all that. But at any rate you can get food. Food is one area, but you can also do this in many other areas. For example, textiles I’m wearing a stretchy shirt here. This is made typically from polyester, which is petrochemical.
0:17:32.8 Kurt Baker: A [0:17:32.9] ____ kind of thing. Yes.
0:17:33.7 Sean O’ Sullivan: So it’s all petrochemical based, and that’s actually not good for the environment either. So you have to rework each industry in each application from food to manufacturing of all sorts of solvents all the things that we use for our shampoos and our soaps and everything else, our vegetable oils, everything needs to be redesigned in terms of the means of manufacturing. We didn’t care about it, and we didn’t know about it until we started to figure out, “Oh, global warming is a thing.” And believe it or not, 15% of the people in the United States don’t think global warming is a thing. 85% of people do think global warming is a thing. Unfortunately, the 15% are in the White House right now. Don’t believe it’s a thing. Sorry to be political, but there’s there’s reasons why.
0:18:29.9 Kurt Baker: If you’re doing it for 25% of the cost, I know lots of people like to save money.
0:18:32.9 Sean O’ Sullivan: Oh yeah, that’s the whole thing. You have to be able to design these systems so that the cost benefit is there first.
0:18:39.1 Kurt Baker: We run into that with electric cars. People are interested, but I’m not going to pay twice as much for a car, even though if I believe in it, it’s like, “I just don’t want to pay twice as much for a car.” I’ll wait I’ll wait, I’ll wait, I’ll wait.
0:18:50.5 Sean O’ Sullivan: Yeah. And then when the operating costs…
0:18:52.5 Kurt Baker: Because that garage household, they’re very budget conscious.
0:18:54.4 Sean O’ Sullivan: 100%, absolutely. So it has to be economically viable, and that’s where you start. You start with the sectors which have the highest returns.
0:19:02.5 Kurt Baker: Yeah, I was going to ask you that. So in order of sector return, what thought process do you have there? Do you know?
0:19:08.1 Sean O’ Sullivan: For example the sectors where the highest returns are is in pharmaceuticals. So if you can make the biomanufacturing of pharmaceuticals 10 times or 20 times or 100 times cheaper, then that actually means you can make enough profit to be able to grow in scale.
[overlapping conversation]
0:19:25.2 Kurt Baker: They tend to have pretty good margins as an industry.
0:19:27.4 Sean O’ Sullivan: They have good margins, and partially because they have fairly expensive ways of getting things done, and you just have to use science and engineering to be much more effective.
0:19:39.4 Kurt Baker: Any guess of a timeline where that might actually… Because we’re literally in a pharma-centric area, so I would think they would be aware of all this.
0:19:45.6 Sean O’ Sullivan: Oh yeah, they’re all over it, and they’re all trialing and testing these new technologies, and it still takes years to get it to market. We have one bioreactor technology, which is 72 times more efficient for manufacturing pharmaceutical output.
0:20:03.0 Kurt Baker: So why isn’t that like… Because that’s again… Are you’re worried about the FBDA, is it a government approval?
0:20:07.3 Sean O’ Sullivan: It still took 10 years for a man to make it to the moon after JFK said so.
0:20:13.2 Kurt Baker: Okay.I understand. But it sounds you have a lot happening.
0:20:14.6 Sean O’ Sullivan: We do. We have a lot happening, and some of the stuff is really low-hanging fruit. For example, with lithium-ion, we have a company in Princeton, Princeton professor, that dropped out. It’s called Princeton Critical Minerals, to start up this company, or I should say took a sabbatical, didn’t drop out. And they now have… They’re producing 40% more lithium out of these lithium, the pools at the world’s biggest mine in Chile. And so that means a company that produces something like $8 billion from this, that one mine, can now produce whatever that is, $12 billion.
0:21:01.2 Kurt Baker: Are they just extracting more lithium? Because lithium’s a mineral.
0:21:04.0 Sean O’ Sullivan: It’s the same stuff that they currently have. It is more effective at getting the lithium out quicker.
0:21:10.6 Kurt Baker: Getting it out. So that’s the extraction kind of aspect of it.
0:21:12.6 Sean O’ Sullivan: Yeah, and it can also, all the waste lithium that they couldn’t get, they have huge mountains of this waste lithium.
0:21:18.6 Kurt Baker: What about the recycling of it?
0:21:19.8 Sean O’ Sullivan: They can actually… Well, recycling is another technology, and we have another company that does that.
0:21:23.6 Kurt Baker: Because there’s an awful lot of batteries out there on the road right now, I know that.
0:21:25.8 Sean O’ Sullivan: 96% of batteries actually go to landfills. And so you actually have to…
0:21:31.5 Kurt Baker: That’s a lot of lithium.
0:21:33.8 Sean O’ Sullivan: Instead of having to re-mine that lithium, which is very inefficient and expensive and bad for the environment, you want to recycle that as well. So we have plants that are going in all across the United States that have these machines that are about the size of a small house that will recycle batteries. And you have black mass coming out the other side, which is the equivalent of the virgin sort of quality cathode or anode that is used to manufacture batteries. All things can be done.
0:22:04.2 Kurt Baker: Cool. Okay. So you’ve covered a lot. I just feel like the entire manufacturing world just changed in about 20 minutes.
0:22:17.4 Sean O’ Sullivan: That’s our mission, and we back 70 new startups a year.
0:22:21.8 Kurt Baker: A year?
0:22:22.4 Sean O’ Sullivan: A year. We have 800 startups that are active in our portfolio. And our mission is to reinvent the means of manufacturing.
0:22:33.0 Kurt Baker: So any of them getting revenue yet? Or are they all still invest, invest? Because at some point, is there something? I know a lot of times you’re getting revenue, but not necessarily enough to cover what you’re doing. Is there any of them generating it?
0:22:43.9 Sean O’ Sullivan: Yeah, no, we have, let’s see, I’d say about a dozen that are doing over 100 million in revenue. And maybe three or four dozen that are doing more than sort of in the 20 to 100 range. So there is just a minority of our investments that are scaling at that stage. But then we have another several hundred that are over a million in revenue. So where you like to see them is where they’re scaling really quickly and scaling profitably. Where you don’t like to see them, we have this phrase that we use, nail it and then scale it. You do not want to scale something which is losing money.
0:23:24.8 Kurt Baker: That makes a lot of sense. You can’t make it up in volume. You can’t make losses up in volume?
0:23:29.6 Sean O’ Sullivan: So you have to keep working on the processes until they’re really, really great and profitable. And that’s what the big manufacturers and the Fortune 500 companies that are buying these technologies are waiting for, too.
0:23:43.0 Kurt Baker: Yeah. You have partnerships where somebody’s like, “Hey, I have the structure. It’s like I have the distribution, I have the structure. If you give me the technology, I can hand it to my guys and they’ll make it big.”
0:23:55.1 Sean O’ Sullivan: You take diapers, for example. So we have a biodegradable diaper made from biomaterials rather than made from petrochemicals, which is how we pad our babies. These super absorbent polymers.
0:24:08.8 Kurt Baker: I would say that’s a lot of landfill, the diapers? Because we used to have cloth. We just transitioned from cloth to disposable [0:24:15.4] ____ kids.
0:24:16.3 Sean O’ Sullivan: Absolutely. And those petrochemical-based diapers take 400 years to biodegrade.
0:24:21.1 Kurt Baker: And they’re not very pleasant either while they’re there.
0:24:23.4 Sean O’ Sullivan: No. And as you know, if you have had kids, it’s the main source of output that you have in your household for years.
0:24:36.2 Kurt Baker: For a couple of years, for sure.
0:24:37.7 Sean O’ Sullivan: It is 80% diapers. And so it’s really actually important because these are clogging up landfills. So we have a company now that is starting to scale in the tens of millions in revenues. It’s working in plants in Asia. It was a US company that are making these super absorbent polymers but making them out of biodegradable materials.
0:25:01.1 Kurt Baker: So that’s something somebody could buy on the shelf yet or no? Not yet?
0:25:04.5 Sean O’ Sullivan: It’s not yet in distribution, but it is at the point where they’re building the factories at this stage. And it has worked for the tens of thousands.
0:25:15.2 Kurt Baker: Will it be a similar cost if they went and bought a regular diaper?
0:25:18.1 Sean O’ Sullivan: 100% cost competitive could be a little cheaper.
0:25:20.4 Kurt Baker: As long as I could afford it, I would pay a little extra for sure. But I wouldn’t pay five times.
0:25:24.4 Sean O’ Sullivan: Yeah. We think you cannot ask people to pay more. It needs to be as good or better, and it needs to be as cheap or cheaper. And that’s what we’re always aiming for. And that’s when the profits and the volume starts to soar and when they can build the next factory off the profits that they’re making, et cetera. So that’s what we always aim for with all the companies that we back. We have to see technically a way to get there. So there’s a lot of work in materials, biomaterials, a lot of work in… And we also do a lot of work in physics. We’re using plasma now. Actually…
0:26:02.7 Kurt Baker: Plasma?
0:26:03.3 Sean O’ Sullivan: Yeah, plasma. Have you heard of the Princeton Plasma Physics Lab?
0:26:06.8 Kurt Baker: Of course I have, PPPL.
0:26:09.2 Sean O’ Sullivan: Yes, you’ve heard of it.
0:26:09.5 Kurt Baker: Of course.
0:26:10.4 Sean O’ Sullivan: Do you know what they do there? You tell me. What do they do at the PPPL?
0:26:12.8 Kurt Baker: I know they have this huge plasma thing, and they’re experimenting on fusion technology.
0:26:17.6 Sean O’ Sullivan: Yes, that’s right, yes. So they have 700 researchers. And the world’s leading research center for…
0:26:22.4 Kurt Baker: Lots of smart people there. I could tell you that. Lots of smart people.
0:26:24.0 Sean O’ Sullivan: Yeah. The tokamak and the accelerator came out of there. That’s for plasma using it the way the sun uses plasma.
0:26:34.1 Kurt Baker: You get some ridiculously hot temperature on it. Somebody told me once. I’m like, it was…
0:26:37.7 Sean O’ Sullivan: 20, 30 million degrees.
0:26:38.9 Kurt Baker: It’s some crazy number.
0:26:40.2 Sean O’ Sullivan: Yeah. Or even higher probably. So there was just an announcement just this week that we have partnered… Our organization, SOSV, through our HACS division they just… The governor announced this a few days ago. Yes. You wouldn’t notice. But so we’re doing this $50 million initiative working with the Department of Energy, HACS, and the PPPL to commercialize some of these plasma technologies. And plasma is a lot broader than you may think it is.
0:27:16.7 Kurt Baker: I didn’t know that.
0:27:18.1 Sean O’ Sullivan: Plasma actually, yes, it’s important for creating the energy of the sun and being able to create these plasma reactors that will… Or these fusion reactors that will eliminate our lack of the high cost of energy. And make energy effectively free. But that may take a while. We work on the supply chain to that by creating new types of magnets and things like that. We’re working on… This is what I call deep tech. I think you’re starting to get the idea of what we mean by deep tech.
0:27:49.5 Kurt Baker: That’s probably why you’re right next to Princeton University. You probably get a few people that flow through that might be interested in chatting with you occasionally.
0:27:56.0 Sean O’ Sullivan: Absolutely. And we’ve been very successful. We’ve given and had our Princeton companies…
0:28:03.4 Kurt Baker: Yeah, a friend of mine just got an award for quantum mechanics something at Princeton University. I don’t even know. I can’t even understand the award, much less what she does.
0:28:09.8 Sean O’ Sullivan: Yeah. No, we have a Princeton…
0:28:13.0 Kurt Baker: A lot of brilliant people in that neighborhood, for sure.
0:28:16.1 Sean O’ Sullivan: Great technologies across a lot of different sectors, from biotech to physics, et cetera. But plasma actually is the fourth state of matter. So there’s solid, liquid, gas, and plasma. And plasma actually is super interesting for decarbonization as well, because the activation energy of creating things is much, much easier and takes lower energy and at lower temperatures than it does when you use chemistry. So with regular, it’s a plasma chemistry, it’s just a much lower activation energy. So for example, 20% of all the electricity in the United States actually goes towards heating and cooling things for separation and purifications of things like plastics or vegetable oils and things like that. And if you can use plasmas to generate these chemical and biological reactions, not biological so much, but chemical reactions using plasmas, then that actually can really decrease our output. So pretty much we’re at 8 billion people, we need to be able to figure out a way that we can live on the planet without heating it up.
0:29:34.1 Kurt Baker: At least at PPPL, that plasma is very hot. So are you talking about a whole different plasma formula?
0:29:40.9 Sean O’ Sullivan: You can do lower temperature plasmas.
0:29:43.5 Kurt Baker: I didn’t realize that.
0:29:45.3 Sean O’ Sullivan: And you’ve heard of the term cold fusion and things like that.
0:29:47.9 Kurt Baker: I have, yeah.
0:29:48.6 Sean O’ Sullivan: But you can do lower temperature plasmas as well. And that also reduces, that means that you can perform a lot of chemical reactions, plasma chemistry reactions, in a much more energy efficient way than elsewhere, elsewise.
0:30:05.8 Kurt Baker: So I would think you need facilities for this, correct? Are these around here that I don’t know about?
0:30:10.2 Sean O’ Sullivan: Well, they have that…
0:30:11.1 Kurt Baker: They have it there too.
0:30:11.8 Sean O’ Sullivan: The PPPL. So we’re building a facility right outside the top secret sort of PPPL thing. Have you ever gone into the PPPL?
0:30:20.4 Kurt Baker: I have, yeah. A friend of mine used to run… He’s long since retired, but used to run that years ago. He and my son and his son were friends, best friends. So he gave us a tour once. They actually have an open house there, on Saturdays. You can go in and get education. It’s amazing. Obviously you’re not going to top secret area, but they’re telling you… They do share knowledge there, for sure. They definitely share knowledge.
0:30:41.5 Sean O’ Sullivan: And what the government wants, believe it or not, is they want to have more of that knowledge commercialized. So that’s why they’re partnering up with us because we’ve done this so many times. We’ve created hundreds of deep tech companies. And we’re delighted to do it. And we’re right in the region, so it makes it easy.
0:31:03.5 Kurt Baker: Any priorities you can share? They might have been in the news release. What’s your first [0:31:11.0] ____ uses?
0:31:11.1 Sean O’ Sullivan: We’ll do five. You can use the plasmas for generating semiconductors. And that’s how all semiconductors are made, using a plasma process. Otherwise, semiconductors would be even more expensive to manufacture. But you can use plasmas to create, for example, we have a company that we’ve backed that creates methane out of air using two plasma reactions inside of a tube. Extraordinarily energy efficient. And even with solar energy, you can create methanol, as a fuel much cheaper than you would be able to produce oil.
0:31:58.5 Kurt Baker: What about desalination? In some parts of the world, that’s an issue. Like they don’t have water.
0:32:01.5 Sean O’ Sullivan: Yeah, actually. Do you know what? There was a great startup out of the PPPL that came out that was doing desalination.
0:32:07.3 Kurt Baker: I know worldwide that’s a long-term issue for certain parts of the world.
0:32:10.8 Sean O’ Sullivan: Yeah. Well, it’s a huge issue. And we have other companies that also deal with the agri-food challenges, even producing less methane out of cows, for example, by changing their biome, the gut biome, and reducing the methane output.
0:32:30.6 Kurt Baker: So we’re going to have healthier cows, too, huh?
0:32:31.7 Sean O’ Sullivan: We’ll have healthier cows. More of their energy will go into creating more output, either meat or more milk. And so that is actually… We sometimes face these… There’s at least two or three ways to solve any problem in terms of making things more efficient. We’re always just working on how and what way can we help anybody to improve their carbon footprint.
0:32:56.7 Kurt Baker: That is really awesome.
0:32:58.5 Sean O’ Sullivan: Yeah. So that’s our climate tech business. We also do health as well. It’s about 20% of what we do, human health, making cures for cancer and cures for mental illness and things like that.
0:33:16.2 Kurt Baker: Okay. So the mental health aspect I’m very interested in, because we actually have a nonprofit that deals with youth mental health and suicide prevention. So tell me a little about your mental health things that you’re doing now.
0:33:26.4 Sean O’ Sullivan: Well, we have a device that’s been used by the NHS for a couple of years now, and they say it is more effective than any pharmaceutical drug for curing depression.
0:33:38.9 Kurt Baker: Oh, that’s a biggie.
0:33:39.9 Sean O’ Sullivan: Yeah, it is a big area. And obviously, a lot of people are affected by that. And it is simply a transcranial electrical stimulation at a small level of… It’s two milliamps. And it’s a headset that you put on your head, and it comes along with an app and helps you basically train your way out of depression. And it is extremely, extremely effective. I’m not saying that the pharmaceuticals are bad. In combination with the pharmaceuticals, it even has higher recovery rates than without the pharmaceutical. But by itself, you don’t even need the pharmaceuticals.
0:34:22.7 Kurt Baker: I would get concerned with any kind of… Not that I… We live in pharma land, but you build up resistance to anything that you put in your system it’s changing the chemistry. Your body’s going to start responding. So I’m always like, can I have my body do something instead so we’re on the same side. I want to be on the same side. I don’t want to be fighting what you’re putting in. I want my body to say, “Cool, let’s go do this.”
0:34:43.2 Sean O’ Sullivan: There’s a lot of other ways we can address these issues as well. And exercise, for example, and food, and all of these things all help. They all help. But we need… These are real serious problems for a lot of people.
0:34:57.8 Kurt Baker: Oh, yeah. It’s a lot of issues. There’s a lot of… As you said, lots of solutions. And different things work for different people. So the more things you can go to the shelf and pull off and try, you’re going to get a better result as a consumer. And I definitely believe in that.
0:35:10.7 Sean O’ Sullivan: And especially if you can make it super affordable. For me, there’s just a lack of access to these high-end treatments. Even just the pharmaceuticals are very expensive.
0:35:22.9 Kurt Baker: So this treatment, what was this NHS you said?
0:35:25.5 Sean O’ Sullivan: Oh, NHS is the… That’s over in the UK. They’ve been using it for a couple years.
0:35:30.2 Kurt Baker: Is that available in the US yet or no?
0:35:32.0 Sean O’ Sullivan: We had it. Well, yeah, there was a problem with… There was a little sort of… I don’t know what happened in DC and they started firing people. So they fired 20% of the FDA. Yeah. And so this was on the table to be approved. And then they fired the device examiner who was about to approve it. But it’ll come later this year. I just don’t understand why we want to slow down all the progress in our society by shutting down. If we are going to regulate things, then we do need to have the people that are going to regulate it in there. And in the case of health, you do want to have regulators in particular.
0:36:18.4 Kurt Baker: Oh, yeah, absolutely. Because you need to monitor this. Because we all respond to things differently. So you have to pay attention. Like, you put something out into the public.
0:36:26.1 Sean O’ Sullivan: 100%. There’s unanticipated consequences to everything.
0:36:30.4 Kurt Baker: You just never know until you get it out there widespread and find out what’s actually going to happen.
0:36:34.3 Sean O’ Sullivan: Absolutely. But at any rate that is an area that we think we are going to make a big difference on. And not just that application, also other conditions like ADD, Alzheimer’s. We have a lot of technologies that are being used for using optogenetics to help drive better mental health.
0:36:57.1 Kurt Baker: Because one thing I remember reading about years ago was how they started identifying which areas of the brain depression, anxiety, schizophrenia, all these different ailments. 10 years ago, we didn’t even know what was going on. But I think now we can say, oh, you can tell this brain is more depressed than this brain by scanning it and things like that. So has that helped with the product? Because now we know the problem. Now we can go try to create a solution. Because before it was very hit or miss. Because were you just treating symptoms. So I’m like, I’m an optimist. So I’m thinking, do you think we’ll find a cure? Like a real… You no longer have this issue, even though part of it’s genetic, part of it’s whatever, environmental. If you could literally come up with a solution that counters the genetic aspect and the environmental aspect, we’ll have a pretty happy society, which would be good for everybody.
0:37:49.4 Sean O’ Sullivan: Yeah, I know. And I just believe that we can build a world that is abundant for all people. We just have to just keep using science and technology to make that happen. And then there’s no reason to not try to solve the world’s most difficult problems.
0:38:09.5 Kurt Baker: So do you use… I know you’re doing lots of analytical stuff. So is AI involved in what you’re doing? Because I hear that modeling and things that could help you eliminate certain models and you could just focus on the other ones to try things like that. Can you explain how that works in real life? Since I just hear things and I don’t really know exactly how you guys are doing it.
0:38:27.1 Sean O’ Sullivan: Have you ever used… You use AI to do…
0:38:29.4 Kurt Baker: I think everybody has to to some level.
0:38:30.7 Sean O’ Sullivan: Yeah, exactly.
0:38:32.6 Kurt Baker: It’s like first…
0:38:33.5 Sean O’ Sullivan: It’s built into Google search now.
0:38:34.0 Kurt Baker: Yeah, it’s that first screening tool. People think it does more than what it does. Honestly, they go, “Oh, it’s going to solve all your problems.” I go, “Don’t worry, your job is safe. Trust me, if you used it, you know you have a job. [0:38:44.5] ____. Unless you’re really done.” But it is definitely a tool. So, yes, I use it as a tool.
0:38:52.6 Sean O’ Sullivan: It’s fantastic. Yeah, we use AI, our engineering teams use AI just to make the designs much faster and to produce… When you have… In biology, it’s particularly important to use AI to get better affinity and better selectivity on your drugs to have better sort of to be able to better bind to receptors and things like that. And the body itself is constantly… It’s an amazing capability that the body has to create its own drugs. We have a company that with basically antibody therapeutics being actually nine of the top best-selling drugs in the entire pharmaceutical sector are antibody therapeutics. It used to be small molecule.
0:39:47.2 Kurt Baker: Okay. Can you explain antibody therapeutics for me?
0:39:49.2 Sean O’ Sullivan: Yeah. Briefly, you have when something from outside your body or even something from… Let’s leave autoimmune diseases out for a second. But when something from outside your body comes into your body, the body recognizes it as other. And it’s…
0:40:05.9 Kurt Baker: I don’t like you.
0:40:06.5 Sean O’ Sullivan: Yeah, I don’t like you. And so your lymph nodes take that other especially when there are dead cells around, they get the signal, we’ve got to do something about this. Your lymph nodes find and build an amazing array of things that can then latch on to the other. And then your immune cells will then go and kill those invaders. And that is what… When you got COVID, before there was a vaccine for it, 98.5% of people who got COVID lived. How is that even possible? Well, it’s because your immune system defended you. And your immune system is that good that 98.5% of the time…
0:40:58.6 Kurt Baker: So can we use the technology of our immune system to create new drugs?
0:41:03.2 Sean O’ Sullivan: Yes. That’s exactly how…
0:41:04.2 Kurt Baker: Instead of me having to do it on my own and being sick for a week?
[laughter]
0:41:06.7 Sean O’ Sullivan: Yeah.
0:41:08.0 Kurt Baker: That’d be cool.
0:41:10.9 Sean O’ Sullivan: Well vaccines do that.
0:41:11.0 Kurt Baker: I’m going to send my DNA. Send me back my stuff. I’m just going to [0:41:14.7] ____.
0:41:14.8 Sean O’ Sullivan: So the vaccines figured that out. And so you get vaccinated, you program your body so that you have an instantaneous reaction when COVID happens, and therefore you don’t die.
0:41:26.1 Kurt Baker: That’s a good thing.
0:41:26.8 Sean O’ Sullivan: And so that’s a good thing. It’s a really good thing. But you can… All these other antibody therapeutics are used for a lot of different reasons, and sometimes they’re used against autoimmune diseases as well, because there’s other ways you can do things, program it. But in combination with other drugs and other things. But at any rate, the body itself is guessing, and it comes up with lots and lots of guesses, and it sends out an array of antibodies that it’s designed, and some of them work and some of them don’t, and some of them will… It’ll have two or three effective antibodies, versus the pharma companies only really ever do one antibody, a monoclonal antibody is what they call it. And so there are new combination drugs that these new AI-based systems will be able to come up with.
0:42:25.7 Kurt Baker: Is that because it costs so much more to do it that way, the pharma companies, but now you have the ability?
0:42:30.0 Sean O’ Sullivan: You have the ability. So what our company did was create a human lymph node outside the body, and then you can attack it with all kinds of things, and it’s not unethical because you don’t kill people because it’s outside your body. And then it produces all these antibody drugs, antibodies, and then you just test them, and then you throw them into an AI, and you say, “Oh, let’s match this up even tighter.” And the AI can improve the drug that you’re… If it was starting without an antibody seed, you would never be able to guess all the possible combinations.
0:43:06.7 Kurt Baker: There’s probably too many combinations probably.
0:43:08.1 Sean O’ Sullivan: Exactly.
0:43:08.5 Kurt Baker: Now you’ve got it down to the point where I can actually hand this number of combinations. So does that mean as our computing capability keeps growing and places NVIDIA keep making these chips to do crazy things, that we’re going to get even broader starting points and narrower results potentially?
0:43:23.8 Sean O’ Sullivan: Well, be able to get even tighter and better designed drugs. So these are all different types of areas that we would work on in detail.
0:43:35.8 Kurt Baker: So when do you see a timeline where I’m going to start actually noticing? I hear all this stuff, it sounds cool, and I’m like, “When am I going to see it on the shelf or see it wherever?”
0:43:45.3 Sean O’ Sullivan: Well, you’ve probably…
0:43:47.5 Kurt Baker: Or have I already seen it, I just don’t realize it?
0:43:47.6 Sean O’ Sullivan: Oh, from SOSV?
0:43:51.4 Kurt Baker: [0:43:53.1] ____ it sounds like really cool stuff.
0:43:53.9 Sean O’ Sullivan: Yeah, we have… Probably, you go into a grocery store, we have like, I don’t know, 15 or 20 products or 30 products on the grocery store. And a lot of times it’s built into other brands, Kraft Heinz, for example, or Dove or whatever.
0:44:09.8 Kurt Baker: How is it built into those? We only have a few minutes left, but I’m just curious.
0:44:13.3 Sean O’ Sullivan: Yeah, so Kraft Heinz is partnered with our company called NotCo to produce animal-free products. So they’ll have a not mac and cheese or something that, or a not hot dog, not dog or whatever. But it’ll be an Oscar Wiener dog, but it’ll have a vegan version of it. And it tastes great. And so that’s the key, it has to taste great or else forget about it. Yeah, we have many, many, many, many dozens of products that are on the shelves in most groceries. And then in the pharmaceuticals… You’ve probably played one of our first companies that we backed was Guitar Hero and Rock Bands.
0:45:06.6 Kurt Baker: I’ve never played it, but I’m well aware of it. You can automatically download it on my system every time I bought it. I’ve definitely seen it.
0:45:10.4 Sean O’ Sullivan: Yeah. Well, anyway, some of these games were the number one game in the world.
0:45:15.8 Kurt Baker: I’m not a gamer, sorry.
0:45:16.1 Sean O’ Sullivan: Yeah, I know. That’s okay. I’m not a gamer either. But that was 20 years ago, almost, 15, 17 years ago. So we’ve been at it for a while, and so you’ve seen… Like, my first company… There’s two things I’m known technically for. The MapInfo. If you’ve ever typed an address into a computer and seen a street map to get around, to get here today.
0:45:40.8 Kurt Baker: I know. That’s why I was upset about it.
0:45:42.0 Sean O’ Sullivan: Yeah. So, I got here today. Yeah, so that was MapInfo. That was my first company. I was 21 when I created it. That was almost 40 years ago. I’m 60 years old. And then the other thing I’m known for is coining the term cloud computing. And a lot of people have used that now pretty much.
0:46:04.1 Kurt Baker: They actually think their data’s in a cloud somewhere. And some people are like, “Which cloud is my data in?” No, no, no, no, no, no, no it’s not actually in the cloud.
0:46:12.0 Sean O’ Sullivan: We created that expression. It was…
0:46:18.2 Kurt Baker: Very good marketing, because some people actually think it’s in a cloud somewhere. Trust me. It’s like, no.
0:46:23.7 Sean O’ Sullivan: Well, there’s a long story as to how that name came about, but anyway, we’ll leave that for another day.
0:46:29.6 Kurt Baker: We’ll have to have you back. Any final words before we go today? It’s been fantastic. I feel I went journey around the world a couple of times today.
0:46:36.5 Sean O’ Sullivan: Oh, yeah. I do have to say, even though the world can be desperate sometimes, there’s a lot of crazy things going on right now in these last few weeks and months and years. But technology and science can help lead us through this. We can all live a happier, more abundant life. We all have a lot of learning to be done, a lot of contributions to be made. There’s no end to the improvements that can be made. And I would be optimistic for the future.
0:47:11.6 Kurt Baker: Awesome. Thanks again, Sean. Appreciate having you on the show. You’ve been listening to Master Your Finance.
