Conversaciones Work/Café - Charla completa Matías Muchnick

It started in 2015. As consumers, I was told that the public, along with confusion, were living through such a huge industry. That certainly means there is a gigantic problem.

When I was leaving university, I wanted to study business. For me, finance was my passion and I was going full steam ahead with finance. Then I had an experience working for an organic farm in Hong Kong. What I realized there was that every time you talked to someone who had generated their wealth from an entrepreneurial venture, telling the story with their eyes shining was so different from everything else that I said, 'I want to be my own story. I want to be one of those who started.' Because when someone asked me what I did, it was basically to make rich people richer. That was my job and it wasn't very fulfilling. So what I did was ask myself: which industry? For me, something that really hurts me: I go into the supermarket and leave more confused than when I entered. Because I'm like, 'Not that, not that.' I was a guy who cared about fitness, and obviously nutrition was super important, but for me nutrition was about the grill. The grill, grill, grill; the one who ate the most meat was the most muscular. There was also a correlation between what we eat and our social stigmas. I always looked for an alternative, always wanted to start something. After these experiences, I started my first venture, which failed miserably. It lasted a year and a half. Truth be told, I couldn't build a team; I didn't know anything, didn't know how to sell. It was something that made me happy but I didn't know how to do it. Then I started my second company, in food, and that's where I really got into the industrial side. I hired an R&D company to make a product for us. And there, it was very interesting because one tends to think the food industry has super advanced science, with a super advanced guide. That was my stigma. But then I saw three people in white coats in a laboratory that was an experimental kitchen, doing trial and error, reading papers from 1980 about how to apply soy to replace something from the animal kingdom. That was it. And I'm talking about companies that made products and formulations for multinationals. For me, that was when I said, 'Here the problem is not the food industry; it's the technology and the science that makes the products.' And then you go a little further, with all the problems about how people think, how customers think, how decision-makers in large companies think, where the gross margin of the product is more important than the opportunity to satisfy a consumer need. When a general manager of a multinational says to you, 'Hey buddy, in the end, what the consumer eats, I decide. I decide when it's crazy.' And all these red flags keep telling you that the problem is deeper than we think. It's not just the technology; it's the way we think, the way as consumers we believe we are eating something that is not. It's the way we face business, the way we think about where we get things, how we bring them to the point of sale. A lot of things where maybe we don't even care about nutrition, we don't care about what it does to my digestive system; I just want it to sell well. How do I sell well with a good nutritional label? But what about the environmental impact? What about that? Until that moment I didn't know much about the repercussions of the food industry. There was much more to how badly it functioned. So I started the company and went to the US to study; I did a program at Berkeley. And there I connected a lot with the biochemistry department and the scientific people around the university. And that's where I became friends with one of my current partners. It was in the US that we coincided. First at Berkeley, I was with professors from the department. What caught my attention was that 99% of that Berkeley biochemistry department worked in pharmaceuticals. The equipment, the people, the business models, the companies, the startups, the artificial intelligence used to find that molecule that would treat cancer better than another, but at the same time without side effects. I'm talking about levels of complexity that are tremendously high. Finally, if you don't think about a super symptomatic industry, but the food industry is preventive, and we are putting zero into preventive and everything into symptomatic. So for me, it was so grave. So how to take this concept and put it into the food industry? That was the conceptualization of NotCo. Originally called The Not Company, we wanted to do everything that the rest did not do. But at the same time, it was a satire, because in the end, every yogurt, every cheese, everything you're eating today is not what you think you're eating. Look at the ingredient label, look at the ingredients; it's that conceptualization. It's also like, 'I'm telling you what I'm not,' because many times you can describe yourself by what you are not, especially when there is an inverted education where the industry... So from the name onwards, the company was always thinking about making a revolution in the food industry. And we had to have the best people. I found Karim in this part of the story, where he was a PhD in computer science and a postdoc from Harvard, where basically he used data from telescopes and developed AI algorithms so astronomers could understand the composition of a star, the density of the atmosphere, so many complex things. But if you think about it, one of the biggest problems in food is that we don't understand what we eat. If we don't understand what we eat, how can we replicate it? So the goal was to take the animal out of the equation. Using plants and animals to produce our meat, cheese, milk, and eggs was absolutely inefficient. The amount of water, land, and energy we had to spend to get a kilo of meat, a liter of milk was brutal. We don't have enough water, land, and energy in the world to sustain the growing population. So for me, it was to take the animal out of the equation, to create a much more efficient system that not only uses resources more efficiently but also has exponentially less environmental impact than the current food industry. This has become one of the main factors of climate change. It's one of the most polluting industries there is.

There were several super interesting aspects to consider when you put yourself in the consumer's shoes. In the end, you can own whatever, you can do well, but the consumer is still the consumer. So there are things you consider when you ask a brand: first, honesty. There was all the debate about whether almond milk could be called milk or not. I said, 'Look, why don't we cut it short and tell the consumer the truth: this is not milk, this is not mayonnaise, this is not meat, this is not...' We would be super honest and direct, telling them, 'We are not that.' That creates the magic effect, the 'wow' moment. Exactly. So when you taste the product—you're telling me it's not mayonnaise, I try it, and it is mayonnaise, but without eggs. How did you do that? 'NotCo' kept cooking this up, making people, when they see the brand, have to explain it: 'No, it's a mayonnaise without eggs because...' There's a story behind it. 'Hey, there are these guys who found, with AI, that the molecular structure of chickpea and lupin generate the same emulsifying effect as egg, so now you don't need egg to make mayonnaise.' So you become a storyteller. 'NotCo' turns you into something that has social currency—how you talk about a product you have on the table.

I didn't know Magritte. But in my first or second meeting with a marketing agency, they brought this—'This is not a pipe.' I said, 'This is it, this is NotCo.'

I think there's something we've left out: the technology that NotCo invented. The value proposition is based on a new technology. This new technology uses artificial intelligence applied to research into over 400,000 species of plants we've never even looked at. No one can tell you that the combination of cabbage and pineapple gives the taste of milk. Understanding animal-based foods to replicate them. We created an algorithm called 'Giuseppe'—after Giuseppe Arcimboldo, who painted portraits of people with vegetables. The algorithm helps us predict which combination of plant ingredients to combine to result in something extremely similar to a target product: milk, meat, an egg, whatever. So formulations come out, combinations you never imagined. You go back to the computer and realize that a piece of cocoa shares 73 flavor molecules with blue cheese, but they're completely different things. So you have to understand why. And tell me more examples like that, where you surprise yourself. For instance, our hamburger—our replica of a traditional hamburger—has cocoa. That cocoa has characteristics that allow our plant-based patty to char on the grill similar to beef. Also, cabbage and pineapple in milk, yellow pea in ice cream, lupin and chickpea in mayonnaise. So we have many examples of crazy things discovered as we advance. And beyond formulation, there's the complexity of food microbiology: how to predict what a microbe does, how it transforms lactic acid, in what time, what quantity. We're looking at metabolic routes to see how to ferment certain things. For example, we want to launch a cheese that is fermented in the traditional French way—a Camembert—all plant-based, using microbes from plants. That's making the technology very interesting.

We could talk all day. I'm very entertained—I loved what you just said. It's not just about taste or experience, but about health head-on. I think we've all experienced this. I'm very allergic to many things, and I realized I wasn't born allergic; I became allergic. It's a key issue. And this is among people with reasonably normal behavior. Those who can't drink certain things, who have other types of allergies—it's very frequent. Cow's milk protein, not just lactose. We solve this with this new technology, this view of the food of the future. But you didn't answer my question; I found what you said more entertaining. I'll ask later. But the phenomenon is great.

Bezos—I would have liked the story to be more glamorous, but it's peculiar. We already had three years of existence. We were doing very well with mayonnaise; we already had 18% market share in the mayonnaise category in Chile—we're the third largest per capita consumers in the world. So it was interesting; we had very good numbers. We were one of the few companies doing plant-based things where 90% of our consumers were not vegan, not vegetarian, had no dietary restrictions. That was super powerful because we were fulfilling the mission of moving the needle, transforming agents so that people eat better without even realizing it, without telling them 'become vegan.' We were achieving that. We were serving Argentina, going to Brazil. We had a great team, had developed the technology and science very well. I went to a program at Stanford, a short one-week thing. One of the professors, Jonathan, says to me, 'Matías, if there is one person you would like to invest in your company, who would it be?' I think I died in less than three hundredths and gave him Jeff Bezos. He said, 'Let's see how we can get there.' He got on his computer, and within three minutes he says, 'Yes, the person who manages Jeff Bezos's investment fund went to Princeton with me.' Melinda. So he sent an email explaining what NotCo is, gave the presentation. I sent the presentation on Friday, and on Monday I had an email from Melinda saying, 'Matías, I love this. I'm very interested. Let's have a call tomorrow.' On Tuesday we called. I told her about NotCo's progress, our numbers, technology, team. After an hour she says, 'I love it. I have to talk to Jeff to see if he likes it.' Jeff considers three things important: the technology, the team behind implementing it, and execution—doing a lot with little. That's their culture: technology, team, execution. So we presented, and three days later I get an email: 'Matías, we're going to invest. Jeff loved everything, and he especially loved the brand and the plan.' They invested.

Yes, we expected it. You have to believe it will go well; if you think it won't, why are you doing it? We had the conviction that we would generate the impact we are generating. We never imagined—but it's very hard to do something if you don't imagine it first. So the answer is yes, we knew we had to make very high-quality products to fulfill the mission. We did it, we keep doing it, improving every year, releasing version 2.0, 3.0, 4.0 of our products. If one doesn't please you, it will please you tomorrow. It was like that with the iPhone and many other things.

Meat is the main animal product, the most polluting and least efficient to produce. Each calorie from a piece of meat is by far the most inefficient in water, land, and energy. So of course we wanted to do meat. But it's complex; it has brutal muscular tissues, intermuscular fat, fatty acids, and all the networks of complexity that made it seem almost impossible. We had to approach meat in two ways: one from the solids (the structure) and the other from the liquids (the blood, or hemoglobin) that makes our brain want to eat meat—a natural instinct to get iron, since very few foods provide it. We had to replicate that. So we made a 'Not Blood' and a 'Not Burger'. Together they had to generate a whole. We worked on that challenge in two parts: NotBurger and NotBlood, and together we made what is now the NotBurger Woopa, or the Rebel Whopper at Burger King. We did it in four months—from knowing nothing about meat to implementing it at Burger King.

Time will tell. We are not playing at being gods; it's about science. The idea was to hack science. We believed almost nothing had been done. There are over 400,000 species in the world, and we don't know what 99% of them do. There are so many things out there that could give us solutions. All this effort is worth it: investing millions in R&D and bringing the best talent to a Chilean startup. It's worth it. We surprise ourselves every day. We're eating things all day long—good things, bad things, but surprising things. The other day we made a bacon that I couldn't believe; it had everything but fat. White and red, a structure similar to meat. What world am I living in? I myself am amazed at what we're doing.

We're replicating what we've been doing and improving it. Every product is continuous improvement. All previous products will improve, and then we'll launch improved versions. There will be an increase in the product portfolio: fermented products like cheese, yogurt, and some additional meat replacements, like white meat—chicken, for example. Then comes the consolidation of the Latin American market: expansion to Peru, Colombia, and Mexico, where we should be opening initial sales in the coming weeks in the largest markets. And the launch in the US is the Great Wall we have to cross. That's what's coming: geographic expansion, product improvement, and technology enhancement.

You choose your battles. For the next two years, Europe is not in our plan. But plans change. Europe is seen as a potential geography we could move into, especially countries with high environmental awareness—France, Germany, Spain—and because they have a deeply internalized culture of eating well and healthily. In Europe, obesity is not such an issue because people eat very well. They also have a beautiful culture: we are heirs of the American supermarket culture, where you go with a cart and buy for the week. In Europe, reasonably normal people don't shop for weeks or a month; they buy day by day. They go to the store, buy a small fish and cook it that day, a baguette, and eat it fresh. There's a wonderful consideration there: people in Europe are very connected to what they eat, in a kind of electrochemical balance that these foods provide.

I've been with Rodolfo a couple of times. He invited me to his study center, his laboratory—it's really spectacular, incredible research. But we're in different fields: he's in haute cuisine, we're in mass market because that's where our mission is. People like Rodolfo are sensational, with a different mindset that the world needs. There are also others like Ferrán Adrià, from whom molecular gastronomy emerged. It was a bit overused, but in Chile we had Sergio Barroso, a cook trained at elBulli for two years, using techniques we didn't know before. The food industry is now replicating things done in a restaurant in Girona. These are disciplines that converge a lot with what we do.

For me, it happened without much thought. I knew what I wanted and went all in. Resilience is one of the aspects I most emphasize—how hard it is to undertake and how willing you have to be to leave everything to get where you want. It's not easy. In an interview, they put it very well: you sacrifice a lot. If you're undertaking to not have a boss, you're completely wrong; you'll have more bosses than as an employee. That resilience helps you keep going, always remembering why you're doing what you're doing. And surround yourself with people who know more than you, and complement you. That's the most important thing: have self-awareness—know who you are, what you do well, and what you do poorly, because if not, you can't complement yourself. That complementary team will make your company successful. If not, stay home comfortably.

Luck always helps. But I'll change that: always, rigor and discipline.