Critical Tech, Critical Time | The Pair Program Ep74

Speaker A: Welcome to the PEAR program from Hatchpad, the podcast that gives you a front row seat to candid conversations with tech leaders from the startup world. I'm your host, Tim Winkler, the creator of Hatchpad.

Speaker B: And I'm your other host, Mike Gruen.

Speaker A: Join us each episode as we bring together two guests to dissect topics at the intersection of technology, startups and career growth. Welcome back to the pair program. Uh, I'm your host Tim Winkler, joined, uh, by my co host, Mike Gruen. Mike, welcome, uh, back. It's been a, been a little while.

Speaker B: It has, thanks.

Speaker C: Good to be back.

Speaker A: Ah, yeah, we're, we're uh, we're entering the, the heart of the summer season here and schools, uh, are kind of going on break. Uh, families are traveling and I, I was listening to a, a podcast that had a stat, uh, on travel, which was that the average American visits roughly 17 US states in their lifetime. Um, if you had to take a ballpark, guess where, where are you at on the, on the state count?

Speaker B: I, uh, think I'm in the high 20s, low 30s. Um, we did account not that long ago. Uh, with the kids growing up, I mean basically on the east coast, it's pretty easy to cover a ton of states. Uh, so I've gone everywhere from Maine to Florid, um, and then, uh, further west as well.

Speaker A: So you can't include layovers. Doesn't count.

Speaker B: No, no, no. I'm actual states I've stopped in and been, been actually in. Yeah, yeah.

Speaker A: Nice, nice. Yeah, I think I'm in the, I'm in the low 30s. Um, but, uh, we're trying to get my, you know, daughter to more spots, so trying to go track down a few extra states along the way. What about you guys? You guys know what, uh, what your count is top, uh, of top of mind.

Speaker C: I do not, I don't think so. I honestly, I think I've, I travel a bunch with like New England area, but I feel like always outside of New England. It's like you go to like New York, Florida and then California, maybe Texas here and there. And then I saw a couple of the middle states.

Speaker A: Nice.

Speaker C: Oklahoma and stuff. But that's pretty much it.

Speaker A: Okay.

Speaker D: And I grew up in California from San Diego, so but I had to do a cross country trip to get to D.C. so if, I don't know if that counts. We went through a bunch of states.

Speaker A: Yeah, you check a bunch off on

Speaker C: a cross country trip, that counts.

Speaker B: Yeah. Yeah.

Speaker A: Well, we'll let that, we'll let that fly. That's that's, uh, that's a lot of travel slot states covered.

Speaker C: Yeah.

Speaker A: Um, cool. All right, well, uh, we're going to give the listeners a quick overview of today's episode. So, uh, today's episode is all about critical tech in a critical moment. And we're living through a major shift in how the US Thinks about its innovation infrastructure tied to defense supply chains and national security issues at large. Uh, specifically for this episode, we're going to be dialing into how one startup, Phoenix Tailings, is creatively sourcing and refining strategic materials and rare earth metals, which has been a very buzzy topic in the news lately, uh, based on these endless vital use cases that rare earth elements kind of play not only in our everyday lives, but in maintaining superiority in a, uh, national, national security and in defense. So to tackle the topic, we've got two, uh, really great guests who kind of sit at this intersection of this transformation. So we've got, uh, Yan Zheng, uh, chief of staff at IN Q Tel, uh, the strategic investor helping connect the US Intelligence community with cutting edge technology. Uh, and I'll preface that In Q Tel is, uh, an investor in Phoenix Tailings. Uh, and we've got Nicholas Myers, CEO and co founder of Phoenix Tailings, a, uh, startup that's turning toxic mining waste into strategic materials vital to our national security, clean, uh, energy goals and industrial future. So, guys, thanks, uh, for joining us on the podcast.

Speaker C: It's an honor.

Speaker A: All right, now before we, uh, dive in, we do kick things off with a fun segment called Pair Me Up. Uh, we'll go around the room, rattle off, uh, two things that just go good together. Mike, you always kick us off. What do you got?

Speaker B: So, uh, for those who, uh, have listened in the past, uh, our Father's Day tradition is miniature gol and donuts and ice cream, which I've used as my pairings in the past. This weekend we did miniature golf, and it was drizzly and overcast and we had the best time. It was probably one, uh, of the best mini, uh, golf outings, uh, between the wet greens kind of slowing things down a little bit and just not the, just humidity and heat that normally accompanies, uh, that tradition. So, uh, we had a blast. So I would say mini golf and like an overcast, like, drizzly day. Uh, it was just a lot of fun. Um, so you gotta, you gotta give hazards than usual.

Speaker A: You gotta give the plug. Where'd you go, Rocky?

Speaker B: Uh, gorge. Uh, it's in, uh, uh, Laurel. Uh, just over in Howard County.

Speaker A: Oh, nice. Yeah, I need to check that out. I'm, uh, I'm usually always just going to something like. That was, like, at the beach, you know, I was thinking of beach trips and mini golf, but, uh, good, uh, stuff, man. Well, happy Father's Day, too.

Speaker B: Oh, thank you. Thank you.

Speaker A: Uh, well, I'm gonna keep it on theme, uh, with the. With the Father's Day, I'm gonna go with Father's Day and coffee mugs. Um, I just, uh, again, celebrating this. This past weekend with the family, my wife and daughter presented me with a bluey coffee, uh, mug. And. And for those listeners that don't know, the parents that don't know, Blue is a. An amazing kids cartoon show, but it's not popular. Not only with kids, it's actually. It resonates with adults as well. But, uh, I just feel like there's something about getting a mug as a Father's Day gift. It's simple, it's practical, and I just feel like it's a pairing that'll never really go out of style. So I'm going with Father's, uh, day and a, ah, coffee mug.

Speaker B: Nice Father's Day.

Speaker A: Yeah, thanks, Brad. Uh, let's pass it over to the guest. Uh, Nick. Quick, uh, intro. And your pairing.

Speaker C: Yeah, absolutely. Nick Myers, co founder and CEO of Phoenix. Um, I born and raised Connecticut, but I would say actually, you know, maybe a little bit biased here, because I do have my own taco blog, Tacos by Gringo. You can follow me on Instagram, but all 157followers are very impressed. All right, I'd say, uh, a good chorizo Papas Conrigo's taco, and a Corona Absolute. The best thing in the world. Doesn't matter if it's dreary day, sunny day, whatever. You have a good Papas conjurizos taco. A good homemade taco. Like a homemade tortilla was so good. And then pair that with a nice Corona with lime. Oh. Makes your day a thousand times better. 100%.

Speaker A: Sounds fantastic. It does. I do need to validate the, uh, and give you a. Follow. It said tacos by gringos.

Speaker C: Tacos by a gringo.

Speaker A: By a gringo.

Speaker C: Okay, I'm the gringo in this specific

Speaker A: case, if it's not obvious, uh, I dig it, man. I'm a. I'm a big Corona fan. And, uh, pairing it with a taco just sounds like a perfect mashup. Uh, so. Well, again, thanks for joining us. And, uh, yeah, quick intro. And your parent.

Speaker D: All right, thanks for having me. Yeah. Yanjung uh, chief of staff at Inkitel. Uh, you guys set me up good. I'm also a father, so I had Father's Day as well. And I'm from California, so tacos and uh, coronas are what I grew up eating as well. So, um, you know, uh, but, um, I spent Father's Day. Uh, Mike, sounds like you went. You probably went golfing on Sunday because I went, uh, I did gardening on, uh, on Saturday. It was actually quite hot. My pairing would have been gardening and sunscreen, which I did not do. It was, it was good. It reminded me of my physical body.

Speaker A: And uh, you know, when you're, when

Speaker D: you're pushing paper, making calls all day, I think it's good to just do something with your hands. Very apropos with today's conversation. Right. The world we live in, a physical world. Um, and just to be able to remind yourself that like, you can do something, there's dirt, there's, you know, wetness and just yucky stuff. But it's, it's, you know, it's nature. It's. It was, it was great day.

Speaker A: So I love it.

Speaker B: And then the lack of sunscreen helps you remember.

Speaker A: So it's a memorable pairing. I think a lot of people can relate to, to that, uh, not just gardening, like doing yard work in general. It's just get fried. Uh, well, awesome. Well, again, thanks. Thanks guys for joining us. And uh, yeah, let's go ahead and, uh, and transition into the, the main discussion here. So, um, yeah, and I do want to kind of like just start with you and maybe begin a little bit more broad here regarding, you know, the, the urgency of critical tech at large. You know, you've been deep in this space, uh, you know, supporting darpa. Uh, Booz Allen, now chief of staff at In Q Tel. Why is the urgency around, you know, critical technologies like semiconductors and rare earth materials spiking right now? Like, why is this such a high stakes issue in this moment right now?

Speaker D: Yeah, it's a great, great question. Um, you know, I think it, it's. We're, we're getting back to this, uh, to this idea that we actually need to start making things right, and, and manufacturing and producing these things. And they're not easy to do. There's not. These are not things you could just flip on a switch. Right. Um, and uh, you know, and turn it on. And we have to be cognizant of history. Right. There are reasons why at the time we felt it was economically advantageous or it made sense to just move Things to a broad weather because we just didn't know how to take care of um, the chemicals or the ability to actually do this at a low cost way. I think those are all things we still need to grapple with. Um, how do we make sure we have the advanced labor to be able to do many of these things? How do we make sure that um, we have solved some of the environmental degradation and challenges from doing, you know, advanced semiconductor manufacturing, doing refining of critical minerals. Right. Those are all things that still needed to uh, to grapple with, which is why we, you know, love what Nick is doing. Um, and I think the cool thing is it's a realization, I think from the country that like, um, that this is important, right? Like whether or not we uh, you know, we are in software, right? We're in other spaces. I think we, it comes back down to the physical world. Like, you know, kind of like what we started out with, the physical world, right? Like, uh, everyone's talking about, we were talking about AI and stuff, but if you just talk to anyone by AI long enough, you will end up being in the data center, end up talking about how much energy it takes, right? And, and so it's, it's. And then you start talking about, you know, all the ways of getting new energy. If you talk about crypto, you're going to be talking about how much energy it takes, right? And so I feel like, you know, we are starting to realize that that many things we depend on ends up coming down to how we make it. How much energy is it going to use? Where are these chips made? We are like, where are these, like these magnets and you know, the things like reduce. That's, I think in a way why we're in this situation. We're in, um, and I think broadly we could talk about this a little bit later. I'll take up all the time. I think there is a discussion we need to have about what is our national idea for a scientific ecosystem. I think we're in a really interesting time right now to rethink the ecosystem. Uh, I think we're in an inflection point and we have thoughts on what that new wave looks like, but it's not what we were doing yesterday.

Speaker A: Uh, yeah, I think that's spot on. Um, and I, you know, try to bring it back into the, the rare earth metals conversation. You know, I don't think folks maybe, uh, are privy to the use case. Some of these use cases are countless use cases that apply here. Uh, Nick, I think it's a Good point for you to kind of touch in on. And uh, you know, what are all of these, you know, kind of circumstances where rare earth metals kind of touch our daily lives? Like if you can break it down for us, um, you know what they're, what they're used for?

Speaker C: Yeah, absolutely. You know, I get this question all the time because rare earths are a confusing topic, right? You hear the term rare earths, you hear the term critical minerals, essential materials, and it's just all sorts of confusing. Uh, the key thing to remember is that rare earths are a group of 17 different elements, all with nearly imponceable names. Things, uh, like neodymium, um, dysprosium, terbium, blah blah, blah, right? Um, they're used in virtually every form of modern day technology and people forget that how important they really are. And the thing about them and what makes them so essential to our everyday lives is there's not a lot of them used in our everyday technology. But the, where they're used is so absolutely critical that without them you can't function. So the microphone that I'm using right now that is reliant on specifically rare earth metals, uh, some of which actually just got banned from China and have a huge challenge with accessing them. So we would not be having this podcast without rare earth metals. Um, your computer screen that you're looking at right now, all speakers are used with rare earth metals. And specifically speakers are actually a very, very high performance magnet application. So the speakers have some of the highest, strictest requirements around the rare earth metals that are being used in them because it directly translates the high quality audio performance. But even more, uh, relevant things to a lot of folks is like electric vehicles, but also internal combustion motors. The glass that a car has is uh, coated with rare earth elements in various different forms in small different ways. And other things like the F35 as it goes to, uh, national security, uh, uses rare earth metals as part of its landing gear and propulsion systems as well as missile guidance systems. Without these key essential materials, right, we're not only can we not have a podcast, but we're also subject to foreign threats, foreign invasions, simply because we won't be able to defend ourselves without access to those raw materials. The only other product in the world that I think permeates this level of reliance on our everyday lives and arguably I think rares are further. But the only other product that's relevant is gasoline or oil and oil is turned into plastic and is using virtually everything. But rare earths are just the Same. And it's the new oil of this generation relying on every different thing that we need.

Speaker D: Mhm.

Speaker A: And it's, uh, you know, the risk lies in not, you know, domestic domesticizing these supply chains or making these supply chains domestic.

Speaker C: Precisely. I would say that the, the, the risk relies in the fact that there are so many different pieces of the supply chain and if you don't have all of them working together cohesively, if one piece falls, the whole thing falls down. And if you don't have the whole thing relying in domestic or allied countries, simply put, if you get into a war with another country that has access to this and does control one part of it, then not only will you not have your weapons and ability to defend yourself, but you won't have the basic necessities that we all rely on, like a cell phone. And it'll cripple your economy. So much so that you'll surrender as an entity before. Way before you get to a kinetic warfare issue.

Speaker A: So this is a good jump off to dive deep into, you know, Phoenix Tailings is, is and what you all are doing. So I was, yeah, I was doing some, some research and reading, ah, I guess an article out of MIT on the startup story. Uh, it was fascinating. Um, so talk to us. A little startup journey and then, you know, how you kind of went from, you know, MIT thermodynamics to building a rare earth refinery. Um, and, and speak to a little bit about, you know, how, how you're solving these problems.

Speaker C: Yeah, of course. No problem. So I met Dr. Tomas, our CTO and co founder at a Bible study of all things about eight years ago. Right. A very odd topic to have at a Bible study in general is about metals. But hey, we're, we're not the most normal people, I would say in general. Um, but immediately when I talked to Mas, he was like the smartest person you'll ever meet. Right. PhD from BU under, literally one of the top scientists in the world on the specific type of metal production. And we talked about exactly this problem of how reliant we are on rare earths and other critical minerals. And the fact is that we're looking at, we're like, no one really produces these things. And the question was why? Why not do they need just a massive amount of cash to build up these mining operations to get it? And we looked deeper and said, no, it's not really it, it's not the cash. It's this huge technical moat of actually how you process rare earths. So if you're not familiar. Rares have a few different stages of the processing. Traditional metals like iron, you dig a hole in the ground and you find a nugget of that metal. That metal's then turned to the steel that's put into your car, spaceship, or whatever it is. Right now critical knows why it's so confusing and um, why we got in this problem where 97% of the world's supply chain is run through China today is rare earth metals. You dig a hole in the ground and you find dirt. Now, last I checked, dirt is not what an F35 is made out of, right. So you have to do a lot of chemical processing to get to that final stage. So the first stage is that chemical processing to separate out the individual group metals from, or little individual oxides from the mixture of rare earths. Then you have those and you turn that to the metal, metal alloy. So we looked at that and we looked at the whole gap in that supply chain. It was really that refining that, taking that dirt out of the ground and chemically processing it to the final metal that is needed to make a magnet or the final component. The way that works today is extremely toxic. There's 2,000 tons of waste for every ton of metal produced, which is horrific, which is cora causes many different type of environmental concerns, but the primary one that comes up is the worker safety issues. In the US and other western world countries, we're just not okay with putting our everyday worker, the everyday American, at harm's way to get to access the metal that is not the same way in many other countries. And so in order to make a domestic solution for rares, that was what the first thing we had to solve and understand, hey, how do we do this? And so that really boils down to a very technical question. Uh, how do chemicals operate into the system? So quite literally we saw an opportunity and said, look, we're going to find a way to solve this. And we put $7,000 down, which was our entire life savings at the time. Yes, we can all laugh. We have more now overall.

Speaker A: But the, it's a lot of tacos.

Speaker C: Maybe that's where my love for tacos came about because they were pretty cheap. Talking about, uh, well actually the, the interesting, fun story aside story here, Tomas is Mexican American. So um, he, he actually would make tacos in the backyard as we made the, as we did our prototype testing, which was always, uh, a good time.

Speaker A: So it's a future venture in the

Speaker C: works, this taco business. So we did the processing in the backyard, just trying out new technologies until we found some chemicals that actually worked and did not have the emissions, did not have their waste. It wasn't the first try, I don't even think it was the hundredth. But we tried for almost a year, every night looking up at the sky to see if it would rain so we could run our tests. Um, and then we got it working. We raised a bit of money to from techstars which was one of our first investors to really scale up out of the backyard. Brought in a world class team. We actually brought in a bunch of technology from a company called Infinium that was going under in 2020 because no one was focusing on rare earth metals at the time. And we saw the opportunity, brought in the top engineer from the team, we brought a bunch of the equipment and actually started building out. So we just closed. $76 million Series B financing round in Q Tel was absolutely essential to galvanize and was a key investor in the round itself. And we are building out our large scale facility of uh, producing rare earth metals to fuel. Well this first phase of it will fuel half the US defense needs by the end of August this year of metals. Uh, we already produce and ship at the commercially metric ton scales, much larger than the backyard. So we skipped a few pieces of the story. But for a bit, um, we commercially ship out on the tonnage scale into primarily the automotive industry for uh, the new new um, models vehicles there. But we're moving and scaling up further to be able to sell engine defense and solve this problem for the US and her allies.

Speaker D: Wow.

Speaker A: Uh, it's such a cool story and I uh, want to dig deeper into the partnership between uh, in QTEL and Phoenix. But uh, Yan, I wanted to just kind of ask you, you've been dialed into a lot of these critical infrastructure problems for years. Why do you think solutions like this haven't scaled sooner?

Speaker D: Yeah, these are as Nick said, it's not necessary access to capital, some of these really innovative solutions. It's a tech and a willingness to actually explore that which is uh, what we do here. Um, we invest in these really interesting technologies that have um, a bent in national security. Our bread and butter is you know, finding a really interesting company that has a commercial product, um, and then pairing that like you guys do, right. With a government end user.

Speaker B: Right.

Speaker D: With folks to be like, hey, you need a new microphone that works better than anything else. This company is building the next great thing. Like you know, I'm sure we could use that, um, you know, for many, many, many purposes.

Speaker B: Right.

Speaker D: And um, and most of the time like the companies are happy that we've brought in a government end user that says, hey, that's great but can you make it this much better? Right? Can you add just this much more? And, and most of the time a lot of these companies are really happy. They have someone, they kind of speak their language. We're like, yeah, actually that's a great requirement. Um, I was thinking about that. That was you know, lower in my totem pole. But if you're going to come in and help us like find the right, that person we could actually engage with, um, and you know, put some money down to actually help us get there. We'll put that into number one priority. And that's what we've been doing for, in 20 plus years where we, you know, we have, we know what the government needs, we go find these uh, innovative companies and we make that pairing. And most of the time actually majority of our investments involve not just one government agency. It involves more breaking down the silos and people in, in one agency be like, oh Joe, you're, I didn't know you're, you know, you guys are working on this too and you like, you know, help create some more government efficiency going on here where people like realize that it's not just my organization that's curious about, you know, metals or microphones or motors or whatever and you know, kind of help, help with that. Um, and so I think part of this challenge when it comes to like these larger, larger efforts is then you're getting away from just one end user. Right? It's not just there's end users are like, hey, I need a microphone. It's more like, well what do we do about 5G? So we don't get Huawei, you know, like all up in this for 6G. What do we do? Minerals so that we're not reliant on China. Like those are a lot m bigger and headier problems and something that we've been working with um, as part of a new line of investing we call Compass. Helping investing where it is about looking at these bigger national security, national priority challenges and bringing all the folks together and saying look, this is not just the access to capital problem, but we're going to help you find the right um, and syndicate the right rounds to get these national security, um, and kind of financially minded folks together to look at some interesting problems that hopefully we shined a spotlight on about a third of our companies that we invested in. Um, they don't involve what anyone listening to this might call the top tier VCs, right? Most people would think, oh, the top tier VCs, we'll cover it. There's a bunch of money floating around, billions of dollars in there, they'll handle this. But when we look at our data after 25 years plus of doing this, over a third of our companies came from, uh, investors are more niche, right. That they're not the really top investors. Which to me means that like, there are certain topics that like you just, if you're just a purely financially driven vc, you're not going to look at some areas.

Speaker A: Right.

Speaker D: So we have to have a new model. This goes back to what I was saying about like the science of ecosystem, a new model of thinking of how do we align public interest, national security and the private sector so that we're all kind of rowing this, uh, the boat in the same direction. And you know, Nick's company is a great example of that where we say, look, there's absolutely a national imperative to do this and there are ways that we can help shape the problem and get the right folks to look at it so that we all kind of be like, hey, that is something we should all spend our money and our time looking at. Um, and you know, we're doing that, uh, on a scale of not just you know, um, one company, but like hopefully dozens.

Speaker A: Yeah, it's fascinating. I wanted to um, quickly ask Nick about, you know, what, what would you say are like some of the biggest, I guess, scientific or engineering challenges that you're, that you're facing when you're trying to um, overcome like I guess, hitting like a purity that's needed, right. For you know, these defense or EV applications. Like what, you know, what is like your all's biggest, like what keeps you up at night challenge, engineering wise.

Speaker C: It's a great question. So we've tackled the majority of the technical or true, like scientific issues already. Right. This is the third gener generation of the unit. We do operate it pretty solidly. But what we tackle right now is really focused on the automation. So how do we deploy rapidly is the question. Right? We will be successful. We will deploy. But will it be in 18 months or six is a question. And so how do we go faster, faster, faster? Which is actually one of the ways in qtel has been incredibly helpful. John Cha, one of our key partners over at Inkitel, has really helped connect us with the local ecosystem. In robotics, uh, being in Boston is extremely powerful because you have those connections into robotics, that this is the absolute cutting edge. I Mean, MIT is one of the top universities in the world on automation. And you have just an ecosystem around you with mass robotics and a few others that just know how to process and do things like that and be able to leverage that as along with big data and AI into the systems to be able to automate and improve things to get the better yields, get the better efficiencies and lower your costs through production. Scale up really that's, that's the big things we're focused on right now as well as designing. How do you actually run a process like this? Bear in mind no one's really operated large scale rare earth metal processing in the US ever. Uh, so we really have to recreate from an operational perspective how do you build this, how do you run it, where do you move rock and where do you pull out metal? And rare earths are something called reactive, meaning they don't sit well in the air, they dissolve, they degrade. So how do you store it and how do you ship it out? Those are the big key things where we've been tackling lately, which has been really, ah, a key focus and you can tell has been quite helpful on it to be honest.

Speaker A: Yeah, that was actually. You teed me up for my next question. Um, this is what we love about the PEAR program is bringing two parties together that are adding value for one another and highlighting how that value is being added. Uh, you kind of touched on it briefly with uh, connecting you all with the local ecosystem within robotics. I think that's really neat. What other areas, uh, we always ask beyond the check, have you seen this value from uh, the partnership with in qtel?

Speaker C: Oh, absolutely. So the, the first is always, they say like local connections to partnerships. Right. So whether it's automation or a lot of times we have supply chain discussions or commercial discussions, uh, in has admitted several different customer, uh, connections to us to be able to sell into the supply chain simply because Inky tells a lot of top investors and hard technologies. Right. So folks making drones, for example, drones all rely on rare earth magnets and rare earth metals. So it's very important for them to have that supply chain. And QTL has been very critical in helping connect us to that. The second is not their own capital, but bringing in other key investors. One thing the private sector is looking for specifically in critical metals and rare earths because it's such a new field in an area that most private venture capitalists are not familiar with, is someone to validate and understand from a business standpoint. Is this the type of Thing that makes sense from a national security perspective, makes sense from a hard industrial technology perspective. And will it scale? Inky Tel has got a blend of very solid success factors in these more nuanced and tougher sectors that are not just true blue software. So Inky tells validation on that was very critical. To be honest with you. Inkitel was one of the first people to say, or first groups to say we want in on the Series B financing round for Phoenix. And I will directly say it very publicly. We would not have raised our $76 million Series B anywhere near the same terms or value or et cetera, or as easy as we did without in Q Tel. I think there's an argument we wouldn't have raised it at all without Incitel. So we're very appreciative of it and it was very key to our whole success there. And then the third part is very uh, relevant to, especially these days. Right now there's a huge issue with China on trade wars. Ink until the team there has been very helpful on navigating and saying hey, like what should you be thinking about as a business? How should you be thinking about it now from m. A lobbying perspective. Right. We have lobbying teams and etc in DC that we work with. But how do you think about it authentically as a startup company looking to bridge into this public sector of national security and very, very helpful on all three of those fronts.

Speaker A: Yeah, I'll flip it over to you Yan, and uh, get your perspective on what makes working with the founder like Nick so effective in this partnership.

Speaker D: Yeah, no, that's great and thank you so much Nick and for all your partnership. This is great. Um, and we're looking for thousands of more folks like Nick and Smart and doing these innovation things. Um, and so we have a very broad um, scope of, of, of work that we're interested in. So um, you know, like about half of our investments are software, other half are hardware. So we do it all. Um, and uh, and, and you know, besides critical minerals and energy generation, uh, we're doing um, investments in microtronics and semiconductors. Uh, the tools that like you know, you need to, to make sure that you could make um, some connections in the United States. Uh, I helped go lead that team before jumping this role. Uh, Quantum is another thing. That's another team I led. Um, and so we work very closely, um, in some of those areas with um, the CHIPS act, right folks that are the government. This idea of um, how do we uh, align the capital stack? There's a public Stack of capital that's going to certain things. There's a public stack of capital going to certain things. And oftentimes they're not maybe going the same direction because they don't know about it by what each other's doing. So our goal is really looking at each individual ecosystem because they're a little bit different. Right. And trying to figure out like, hey, what can we. Doing different stages of development, like Quantum's lot earlier stage than where Nick is at, right. Where they're actually being able to get into a mine. Um, but we're helping them trying to figure out things, um, like how do you actually build up the workforce? How do we make sure that we have folks, um, making the supply chain of. Of refrigerators, dilution refrigerators in the United States.

Speaker C: Right.

Speaker D: We made an investment for instance in uh, Maybell as a US Uh investor startup company doing that in this space. And they're doing a lot of things in regional parts of, of you know, Colorado, Wyoming, um, and as part of the uh, EDA Tech Hubs, um, concept. So you know, we, we try to like, just connect folks and convene folks in these different areas when it makes sense. We're um, really big in bio as well. It's another one of the. That we, that we're um, we're operating in and you know, things in areas and, and like that also we try to help inform um, our government stakeholders. Like a lot of folks, they're just trying to figure out what is the future of bio, what's going on. And we help be able to bring those folks to Capitol Hill, to the executive branch and folks that are actually the stakeholders and policymakers that are making those decisions to be better understand the hype from actually what's happening from folks hearing it from folks like Nick and others who are actually in it and actually know what they're talking about is just some are such a better way of expressing kind of to uh, to an audience like where, where we think the technology is heading. So uh, you know, we hope to be able to do that because our like nicotay. Our checks are small. Right? Like, we are not a, we're not a private equity. We're not like a large company that will uh, that will basically give you all the capital. We don't think it's necessarily the capital in and itself. Um, you know, he mentioned John Ching, who's the board. Board observer on this deal. Every m. Every message that we make, we um, we have a board observer, you know that from our team, uh, that is able to be there to help guide the company on like questions they have with working with the government or where things are headed or export. Um, and I think those conversations that access, the ability to rehab that conversation is super important because it's all about relationships. Um, and in any given year we're in over 100 plus boards that gives us a lot of access and a lot of to the leading minds in the field and to us that is a way to help um, guide the United States innovation ecosystem and our government into like, hey, here are the things that are going on that really need to focus on. Here are the market trends that are affecting directly our CEOs and what they're worried about. You know, gosh, what can we be doing about that?

Speaker C: Right?

Speaker D: And so, so I think this is intangibles the in kindness that things that we, we offer. That's not just capital based. It's, it's a lot, it has a lot to do with our staff and lots to do with just our model of actually being a partner, uh, with uh, with our companies and not just uh, you know, not just a chat.

Speaker B: Yeah, yeah, no, I was just thinking, yeah, you touched on like all the shift in model. You think back to like the 1950s. How would we have solved this? Right. We'd probably have something out of DARPA or whatever just to like, how are we going to as a government program? And you touched on I don't know, a dozen things about why this model is a, is a better model. I'm curious if like what your thoughts are, like if you could maybe enumerate some of the reasons like why that model isn't quite as good in the, in the modern world as this one.

Speaker D: Oh yeah, you be ready because this is, this is a, I'm a huge like science history nerd. And this is an area, uh, you know, I spent a little bit on Capitol Hill doing innovation policy. And this is something we explored, you know, uh, for many years. Like I, I think we're in a new inflection point. Um, if you, if you think about the big projects that we've done, um, and where we've been going in the early 19th, you know, like 20th century, you know, kind of like after the Industrial Revolution, like majority of R and D was done by private companies. Like this is, you know, like, you know, you think the big corporate, you know, railroads and things like that they had a purpose. You know, I need to make a better railroad. I need to make, save some money. That's the purpose of R and D, you get to like, World War II and then you have the, you know, Vannevard Bush, who is, you know, the forefather of nsf. And like, the current way of thinking brought in universities and say, no, there's a way of actually bringing public universities into this game. And they could be developing not only new ideas, but also like, the workforce of tomorrow. And like, you know, the ability for us to really build that scientific ecosystem has been hugely critical from us winning the war to post, um, uh, Cold War and be able to keep up and create new, just new innovations. Um, but I think we're in a point that we haven't really figured out what this new model is yet. And, uh, I say that because, um, by the 1980s, the rate of public spending in R and D really has been dropping perceptibly since then. And the private sector now outspends, um, the public sector in R and D. And so now it's roughly like 75% of all R&D per GDP in the United States is done by a private sector, not the public sector. Right. And so in. And you. And we have things that some folks in the audience might have heard of, like sbirs and craters and, you know, different contracting mechanisms develop at a time when they were meant to be working with a lab and maybe a Bell Labs, right? A corporate lab, a large entity like a Raytheon. Right. Like, those are, those are, those are tools created to work with those folks. And at that time, the concept of what we know today as venture capital and what we know today as startups did not exist. And so we are at a time right now where we're talking about we need to move faster, we need to work with these innovative startups. And constantly, you hear this thing is like, ugh, uh, we need new authorities, we need new ways to work with folks. And I think that's just a reflection of the fact that we have not updated our model of working with this new group of folks that just did not exist when we developed the old model. Right. And I think right now, hopefully we, uh. I feel like in Q Tel has been early in the game. We found in 1999 on that same premise, how do we engage with the private sector, especially startups and VCs, to keep the government ahead of where things are headed and we have to be engaged with them in new ways to engage with folks. I'm glad folks right now are thinking about ots and other ways of looking at things, and I think that's going to be important. But, um, I Think there's models like us, like this nonprofit model that um, are really provide a new way of looking at how to actually engage with the private sector with the public interest. I'm um, a really big fan of foundation um for nih. Um when I was in Senator Coons office I helped stand up write legislation that stand up the foundation for Energy Security Innovation which got stood up with Chips in Science Act. Um, so now the Department of Energy has a foundation and part of that idea was tailored to look ah at ah in Q Tel of like hey, we just need a nonprofit model that's not government but has a government mission, a public mission to look at national security, energy and those areas. Um, you know those things that are, they cross cut a public mission but is able to more easily leverage the tools, uh, financial tools or you know contractor tools or whatever we need really to meet the, meet the demands of the time.

Speaker A: Yeah, I think you know this is exactly what we talk about on this podcast and I think part of it for us is solving the problem of awareness of like what some of those problems are. And I think when you're in industry or commercial startup, um, it can be extremely daunting to think that you can tackle some of the world's biggest challenges that are tied to national security and defense if you don't have a navigational guide, somebody to kind of you know, walk you through what it takes to solve, to get connected to the right people and to solve those problems. I think uh, we're seeing a lot more of like communities popping up here actually. Little micro networking communities. One I'll plug is uh, Station DC where it's you know they're, they're truly just trying to bring policymakers, investors and startup founders into one room and you know, have them meet, greet, talk about what, you know, what problems they need solved, how, how that solution is working for this different vertical, um, and making those connections. I think that's so valuable and that's what we try to do with you know these, these conversations and, and bringing folks in and um, you know those are, those are the things that kind of give us a lot of hope because I think it was very siloed of like I don't think I could ever with the, with the government, um, trying to break down that barrier, uh, is uh, yeah, one small contribution we can make. But I love like you know the, the mission behind in Q Tel and, and having those relationships and making that a part of the value add is incredibly valuable. Um, yeah Nick, on, on that note too, you Know, it's something that we talk about, uh, with startup founders that are scaling, you know, dual use, uh, companies. Right. Um, how does it, how does the uh, almost like roadmap, uh, deviate when you're thinking about how your solution will be solved and maybe, you know, one certain commercial solution versus, you know, the a defense setting? Uh, do you like, build out teams that are, you know, dialed into one area or the other? I know obviously like on sales side that makes sense, but you know, with, with, with what you all do is how does that impact kind of like your growth plan and your roadmap?

Speaker C: Yeah, absolutely. This is actually one of the biggest areas I see a lot of founders making mistakes in. And they look at sbirs, they look at new opportunities on the military front or other different government opportunities, and they build out basically an entire business within the business focused on that. So this is something Infinium did prior to their bankruptcy is they started becoming basically an sbir mill, focusing on new innovations, scaling up a new thing the one grant would finalize and finish. Then they go after a new one that was completely unrelated. So for us, that was one of the first learnings that we actually made, is that every grant we go for, every single push we go for is all in line with our same commercial vision and the government is a part of it. Because there's a great opportunity. We want to serve our country. We're all very key on that. And I think it's a huge opportunity to enter into the sector, but it has to be in support of the, grow the, the broader commercial vision and everything has to be in that, that lane. Uh, so for example, a lot of times we choose not to do certain projects. There would be like recycling some crazy new material out of this different ash product or something like this that wouldn't be relevant to us or some new iron thing or different like that. We focus on making sure it's all built out the same. So virtually all of our teams are the exact same teams. We just build it in line with that, the same roadmap, and we leverage the government endeavors, uh, that we have and the military side, whether it's um, you know, aerospace or areas of other sites, just to accelerate the vision and make sure we're hitting those key national targets and to do the things that we wouldn't necessarily do on its own, in its own pure commercial. Right. But we, we leverage this opportunity to really work together. With sales side, you do see a little bit of a shift, but generally, pretty much our sales team covers kind of Everything, it's still a startup in that capacity. Um, we do fairly large contracts. We just signed a $200 million sales contract into the auto industry. But uh, that same team is selling into defense and a few different other sectors as well. So including medical devices, which feels unrelated but it is really the same type of thing.

Speaker A: Wow. Yeah, that's super, you know, helpful insight. I think that's something that uh, you know, could turn into a quick master class for a lot of startup founders because they get, they get lost in it, they get lost chasing you know, uh, a number of, yeah, Sivers. You know non dilutive funding is a beautiful thing but if it's an, going to derail your product roadmap, um, and you don't have a access to capital to sustain that long period, you're, you're kind of toast. So it's ah, it's a uh, it's a challenge that we talk about. We bring it up uh, pretty regularly whenever we're talking with folks because you know, it's often debated, uh, but it's, everybody's got an opinion on it and it's always interesting to see like every founder's different approach to it. So I appreciate that feedback. Um, maybe just kind of in closing, you know. What, uh, yeah, what, what can listeners be excited about with the, the future of Phoenix Tailings? What's, what's on the horizon over the next, you know, one, three, five years.

Speaker C: Absolutely. So we're building up our commercial operation in Exeter, New Hampshire that'll be up and running producing metals at uh, the 200 metric ton per year scale this summer. So it's not in four years, on five years, not 15 years like most mining operations. Right. We're getting this thing up and running in six months from the initial. So uh, we'll be, we're well on track. I think it's going very, very well pushing forward to do that. And we'll be shipping out about half the US Defense needs of rare earth metals from that operation. Um, uh, we're working with the government hopefully to be able to expand beyond that too and several other parties and commercial entities as well to be able to increase that size of that facility. But in the next, in 2026 and uh, early 2027, we'll be building out our much larger facility to do about 30% of all commercial demand in the United States. About 4,000 metric tons of metal output coming from that op. And we're starting already progress to be able to build that out, all producing it with zero waste, zero Emissions at a fraction of the uh, cost structure of the Chinese operations right here in the United States.

Speaker B: Nice.

Speaker A: That's exciting. And then, uh, yeah, last, last uh, uh, note. Yan. What you know, what can folks uh, be excited about for, you know, some of the future investments that are going to be coming out of the. In qtel, uh, umbrella.

Speaker D: Yeah, we um, you know we, we have. We're going to expect over 70 investments this year. We did that last year and the year before. So it's, it's a lot. Um, you know we're looking at uh, some really interesting ones in biotechnology and bioengineering and how that might affect um, uh, you know, what we be, how we keep ourselves safe and new advances and actually uh. M. People think of medical always when you think of biotechnologies, but we're looking at things of like these things are actually used to make farms, not just medicine, but like lubricants, right. Cosmetics. And those are actually the industries that are keeping that alive. Um, it's really interesting to see uh, folks kind of using AI now to um, figure out um, what are the right combinations of molecules and chemicals put together to actually uh, make this new biological uh, component. Um, we're looking at things in semiconductors. Uh, we actually made some investments in how you actually. The new tools that actually take away any dependence we have, uh, uh, from um, ASML and others feature to actually create the cutting edge smallest feature, um semiconductor uh, components. So um, those are, we're really excited and those are going to be giant projects that are going to be in the United States to actually build here. Um, and then things in uh, AI and drones. I think one of the cool thing I really like about AI is um, we're getting into everything has to have AI in it. Um, but it's not just like hey, we're getting away from just the LLM that is table stakes that we see it right. Everyone has LLM and I do a deep seat has shown us is that like they could get very close. You don't have to spend all those, all that money. You get really close to a model that operates close to par with what um, the industry is doing. What we need to be pushing our industry in the US Context is how do we add on top of that what are the things that's going to make your product that much better and more tailored um to the specific mission. Um, and it's about usability, use cases M. Uh, uh, and kind of just make that faster and so that we could do more with fewer people um, so looking at that being perforated through physical AI, uh, from robotics down to cyber security and cyber tools and so on. So lots of stuff. Um, we're just constantly inundated with new exciting deals. So um, uh, it's an exciting position to be and I'm really thankful to be able to see all these new companies coming through, uh, m across uh, my table almost every day.

Speaker A: That's awesome. We're excited to track it and we'll be pinging you regularly for future podcast guests. Uh, maybe a semiconductor, a quantum future, uh, guest. I'm sure you've got a, a large Rolodex of contacts to, to speak on those topics. So, uh, well again, yeah, thank you guys for, for contributing on, uh, this topic. We're gonna, we're gonna wrap with uh, our final segment which is the five second scramble, which is just quick, uh, answers. Try uh, to keep them uh, within five seconds. Some uh, uh, some business, some personal. Um, Mike, why don't you kind of lead us with uh, Yan and then I'll, I'll close, uh, with Nick.

Speaker B: Sounds good. All right, here we go. Uh, what makes Ink Utel unique?

Speaker D: Oh, the people. Sure. All about the people.

Speaker B: Uh, what stage, uh, company is your favorite to work with?

Speaker D: Early seed stage.

Speaker B: Uh, which emerging market or sector do you think is underrated?

Speaker D: Um, Quantum.

Speaker C: Quantum.

Speaker B: That's a good answer. Ah, if you could have dinner with any tech leader, dead or alive, who would it be?

Speaker D: Um, oh, I, I, I saw Dean Kamen recently and I never really got a chance to, to really sit down and then talk to him. But uh, uh, you know, Segway and all the other stuff is a great engineer. Love to have a deeper chat with him.

Speaker B: What did you want to be when you grew up?

Speaker D: A brain surgeon.

Speaker A: Whoa.

Speaker D: That's the first.

Speaker A: The first.

Speaker B: Um, uh, is there a charity or cause that's near and dear to you?

Speaker D: Um, yes. Uh, you know, supporting, um, supporting kids that, ah, in inner city kids, uh, especially like AIPI communities that are just uh, you know, unknown. So the folks like the Hmong community and um, others, Vietnamese communities, that's the thing that we like to support.

Speaker B: Uh, if you could live in any fictional universe from a book or movie, uh, which would you choose?

Speaker D: I think any of the Marvel ones. It'd be nice. It seems like there's so many superheroes, I could just wake up and have a superpower. Uh, I don't think you want to

Speaker B: be a citizen in a Marvel universe. I think you need to be a superhero in a Marvel universe.

Speaker D: I'll keep trying.

Speaker B: There you go. Uh, and, uh, uh, what's a surprising hobby of yours?

Speaker D: Uh, I do woodworking. Um, so I'm on my journey to remake every single furniture in my house. So, uh, you know, starting with the small things and the table will be hard. That's gonna m. Be a big one.

Speaker A: All right.

Speaker B: Nice. Well done.

Speaker A: Very cool. All right, Nick, you ready?

Speaker C: Let's rock and roll.

Speaker A: All right, uh, if Phoenix tailings were an animal, what animal would it be?

Speaker D: Wolf.

Speaker A: Nice. How would you describe the culture at, uh, Phoenix Talents?

Speaker C: Wolf. Like,

Speaker A: Perfect. Uh, what kind of, uh, what kind of open roles are you all hiring for? Over the next six months, we're building

Speaker C: out virtually the entire finance team, cfo, uh, uh, and controller, bringing on government affairs, uh, specifically so. And if you know anyone, let me know. Uh, and sales folks as well.

Speaker A: Nice. What is the weirdest thing that you've ever pulled from Red Mud?

Speaker C: Oh, um, we pulled gold from one site, which I don't know if that's weird, but I was excited. That was pretty cool.

Speaker A: Gold's a hot commodity, so I'd be excited, too. Uh, what's a trait that you find most essential in a co founder?

Speaker C: Um, I think the ability to empathize with the other person. Did you go through some stuff as a co founder? So having the ability to empathize and understand your partner is extremely critical.

Speaker A: Nice. What's a charity or corporate philanthropy that's near and dear to you?

Speaker C: I would say I. So I donate a fair bit to the Greek Orthodox church. I think they do a lot of really good stuff and support, uh, really positive missions all around the world. Nice.

Speaker A: Favorite, uh, class from, uh, your education, from your schooling that you find most useful today?

Speaker C: Uh, I would say, actually, financial strategies. I took that at Northeastern, uh, University, where we studied, like, corporate strategy. I thought it was gonna be totally useless because everyone told me it's not relevant for any job that you get out of school. But honestly, I think I use it more than anything else. Like, just different business school frameworks. It's so helpful to have on a regular basis, and you'd be surprised how many people just don't have it.

Speaker A: Yeah, I like to know that my CEO, his favorite class is a financial strategies class. That's great. Uh, what's the first car that you ever owned?

Speaker C: Uh, Chevy Camaro, 2011 SS. Beautiful American muscle baby.

Speaker A: Yeah. Uh, and last question. What's a hobby or activity that you enjoy doing but you're just. Just not good at it, aside from golf? Oh, yeah.

Speaker C: Terrible golf. I love surfing. I actually went for a whole surf weekend the other day. Uh, like, a surf camp out in Portugal. I still suck, but it's great.

Speaker B: It's great.

Speaker A: That's amazing. Uh, all right, that's a wrap. Uh, yeah. Nick, thank you both for. For joining us again. This is a conversation that's exactly, you know, what we look for on the parrot program, connecting, you know, those people that are building critical technologies with those that are helping bringing it to market. So thank you guys for what you're doing, and, uh, thanks for spending time with us on the podcast.

Speaker C: It's an honor to be here.