A sustainable business model in a sustainable market

On this episode of The Founder's Sandbox, Brenda speaks with Oscar Neyra, CEO and founder of Lisus Energy, about building a sustainable business model. Lisus  is focused on identifying better sites to source materials for batteries. Oscar holds a Doctorate in Environmental Science and Engineering from UCLA, as well as a Master studies in Homeland Security from USC and Global Security from John Hopkins. Before starting LISUS, Oscar was a Research Associate at NASA's Jet Propulsion Laboratory. He also founded an environmentalist group called GR, which has over 5,000 members.

Here is a sample of what you will hear in this episode: types of teams in deep tech, challenges of entrepreneurship in the current enviroment and as an immigrant founder, and product market fit.

To contact this week's guest,  Oscar Neyra,  or for more information follow the links below: 

[email protected]

www.lisusenergy.com

https://www.linkedin.com/in/oneyran/

Resources listed in this episode:

Gene Pool Engineering for Entrepreneurs

https://www.khoslaventures.com/gene-pool-engineering-for-entrepreneurs/

https://www.Rabbit.tech

https://nextactadvisors.com/when-spending-time-in-the-sandbox-isnt-fun-anymore-and-yet-you-still-can-play/

Show transcript:

00:04

Welcome back to the Founders Sandbox. The Founders Sandbox is a monthly podcast. I'm Brenda McCabe, your host. This was launched in September 2022. We're into our second season. And as I said, it's a monthly podcast.

 

00:33

that features entrepreneurs and business owners who learn and share about building resilient, scalable and sustainable businesses, all with great corporate governance. I have a very simple mission with this podcast. I want to assist the entrepreneurs and entrepreneurs to build scalable well governing resilient businesses. The podcast, the Founder Sandbox, is just an additional channel to

 

01:02

materials on my website, NextAct Advisors, and originally authored blog posts that you can find on LinkedIn. My guests are founders, business owners, corporate directors, and professional service firms who, like me, want to use the power of the enterprise, be it small, medium, or large, to create change for a better world. Through storytelling, each of my guests touches topics around resilience, purpose-driven enterprises, and sustainable growth. And my goal with this

 

01:31

monthly podcast is actually to equip one startup founder at a time to build a better world through great corporate governance. So today my guest is Oscar Neyra. Oscar is the CEO of Lisus, a venture-backed startup that is focusing on identifying better sites to source materials for batteries. And when I spoke with Oscar, we came up with the episode title

 

02:00

a sustainable business model and a sustainable market. So Oscar, thank you for joining me here in the Founder's Sandbox. Thank you so much, Brenda. It's my pleasure to be here. Let me give you some intro. Oskar holds a doctorate in environmental science and engineering from UCLA, as well as a master's studies in homeland security from USC and global security from Johns Hopkins. Before starting Lisus, Oskar was a research associate

 

02:28

at NASA's Jet Propulsion Laboratory. And he also founded an environmental group called GR, which has over 5,000 members. Oscar, my past that crossed at USC Viterbi Engineering Schools, Massey Entrepreneurship Prize Competition. About three years back, I was one of the judges on the panel in the pitch session. About a year later, Oscar asked me to join his advisor.

 

02:58

in corporate governance in lisus. And I'm sharing that here in my podcast as a full disclosure. And we have, we see each other frequently. And I thought as a first time founder with really deep technical and scientific knowledge and into your third year, you have a lot of stories that you could share here on the podcast. And I'm going to ask you, you know, I'm delighted you joined, but I'm going to ask you to start.

 

03:27

Just, you know, share how your life up till now, Oscar, has shaped your journey in entrepreneurship. Thank you so much, Brenda. Yeah, I think definitely entrepreneurship is a really interesting endeavor. You know, I don't come from a wealthy background. I come from a small town in Mexico. And all my life, I've been used to navigating against the current.

 

03:56

probably being the first member of my family to come to the US to study or to go to grad school. So I think entrepreneurship and this adventure resonates a lot with the path I've had in my life because it's a lot about being persistent and definitely going against the current and against

 

04:23

all the challenges that entrepreneurs like me face on a daily basis. Wow, thank you. It's always good to know the background of my guests. When you accepted to join me in the Founder Sandbox, I couldn't help. And you're technical scientists, right? PhD. Yeah, it took me back to an article I wrote some time back. It's called, When Spending Time in the Sandbox Isn't Fun Anymore.

 

04:52

and yet you can still play. So what I wrote is really about the teams. There are three types that I have discovered when working with technical founders. And we're gonna cut to the chase. I'm gonna ask Oscar in a minute what his perfect team is like. But in that blog post, I talk about technical scientific founding teams. Typically they come from a large enterprise. They excel at their craft as engineers, inventors. They have written patents, have worked at the bench for years.

 

05:22

And while their secret sauce has become a business, they don't have the skills and competencies in a technical or scientific founding team. They're insufficient to scale the business and they need time away from the sandbox and really working on the commercialization. And the second type of team is they've been there and done it. Founding teams, maybe it's their first or second exit. They've been there and done that. They may have the skills and competencies acquired at a large enterprise.

 

05:52

or a family-owned business, maybe they've been part of a startup, or they are bringing to life the idea of a patented product. Again, we're talking about scientific founders. And time in the sandbox, we're always gonna go back to the sandbox, was never an issue because they had access to abundant resources. Finally, a third type of team that I've been exposed to is the adult supervision.

 

06:16

And they are founders that have never worked for a large or medium sized enterprise with the processes, systems and operations that enable scaling a company. They've never hired or fired and they're many first. And they look around, say, isn't there an adult around that can help, can take the time to do those unnecessary things. So Oscar, of those three teams, you know, where would you place the licensed teams? And more importantly, you know, what does a perfect team?

 

06:47

mean to you and how have you, what makes a perfect team? Perfect, yeah. To the first question, I would say we're probably in the first definition, which is we come right from the lab. And before founding a startup, we definitely didn't know what was going to be. And of course, what are some of the things that you need to do?

 

07:15

in order to build a startup. I think something that has been really interesting to me is that in the lab, you are allowed to not know anything. And especially it's important kind of like to challenge every assumption that you make. Whereas when you're a founder and when you are building a startup, you are expected to have all the questions. So that is...

 

07:43

kind of one of the major differences that I've seen from the lab and from the startup world. So the ability to ask questions outside of the scientific realm, right? Exactly, yeah. Wow. Another thing that I think is very important is that, in my opinion, not knowing has a lot of value. And in a startup, unlike in a lab, it's better to not know.

 

08:12

because that is what opens many doors and what pushes the boundaries of what's possible. Wow. So the open sky. Exactly. That's my personal opinion. But yeah, I would say we are in the first box. Thank you. So what has been a major challenge in entrepreneurship? While building licensure into third year, what would you share as a major challenge? Perfect. Yeah. I can tell you

 

08:41

about the challenge and of course, coming back to your question about the Perfect Team. Yes, sorry. Yeah, I would say to the first question of the major challenge, definitely the landscape, when we started actually scaling with the company, it was when Silicon Valley Bank started to fall. So I remember we were in a meeting, we were in Menlo Park and then suddenly everybody starts texting and then we say, what is going on?

 

09:10

So we drive in front of the Silicon Valley Bank headquarters in Silicon Valley, and then we start seeing the people there. So I would say we were born out of a time of crisis, and that's what has made us stronger. But the major challenge is definitely the landscape right now. And most importantly, I would say the...

 

09:40

higher kind of a the higher kind of bar that you are subject to as an entrepreneur because in these times only the best ones thrive. So it's definitely a really fun time to be in and really exciting but also challenging. Thank you. Yeah. So let's go back. Do you have the perfect team to address and thrive in this and these challenging times? I yeah.

 

10:09

I like to think kind of like out of the box. Yes. As a technical founder and leading a deep tech startup, I see many companies that try to put together teams that are mostly PhDs with a lot of experience, post-docs, former professors, that kind of profiles. But in my view, the biggest challenge of those kinds of teams is that you get, as you advance in life, you get a little bit more

 

10:39

skeptical of what can be done. So to me the ideal team is similar to what we put together in license which is a combination of a lot of experience with a lot of innovation and a lot of youth. And this goes to a story that I really like from an article that is really

 

11:09

When one investor funds a company, a really big deep tech company, and the investor as the company, how was the team integrated? And the founder says, okay, like we have the best from this part, the best from this part, the best scientists in the world. And he asked the founder

 

11:39

And how many of those are under 35? And he says, wait, none. Yeah. And I think that's really interesting because the investor ends up saying, okay, to me, a diverse gen pool needs to have a combination of this kind of experience and also the value of, understanding the value of bringing, you know, people in their 20s that are right side of school that have all the energy in the world. And that don't necessarily know what they are getting into.

 

12:08

To me, that is the perfect thing. And I can think of a couple of examples of these kinds of things. Actually, you did have some interns during a period of time, right? Postdocs, are they working on the docs from USC or UCLA? Exactly, yeah. Right? Yeah, correct. We had some teammates. That's what I realized, because we have, as teammates, very experienced people.

 

12:37

And then you see the energy that the interns bring, the perspectives, the desire to push these boundaries. So that's what I love about it. And if you see one company that I really like, that right now is really famous in Los Angeles and that is like thriving, is Rabbit. Before Rabbit started to get hot as it is getting right now once they presented.

 

13:07

one of their hardware. I was looking at this company in their crunch base profile, and I look at the team and it was really interesting to me that when I saw the team, I saw that their CTO is like 20 years. I think he was part of Carnegie Mellon. He graduated from Carnegie Mellon and he right after became the CTO of this company. And when I saw that, I thought to myself, okay, this is the perfect CTO for this kind of company.

 

13:37

Yes. So pushing the boundaries, right? Digital natives and representing that generation. That's fascinating. Exactly. And of course, having adult supervision. Right. So a combination. Exactly. Yeah. Right. So you're into the third year. Market wins, they changed in March of last year, as you alluded to with the...

 

14:06

SVB and First Republic Bank debacle, right? With that background, have you continued to evolve the product market fit because of the market downwinds or what have you done with the product market fit? Yeah, that's a great question. Has it evolved? Yeah. I would say, you know, we need to think in terms of our customers, but also we need to think in terms of our times. Yeah.

 

14:36

2021, I would say there was a big focus on having the best technology at any cost and more in delaying, for example, revenue, profit, good unit economics. Now that the market has shifted, not only on the investment side, but also on the customer side, the focus is more on...

 

15:05

the focus of our products is more in generating revenue faster and in building a business that is more real and that can thrive regardless of the market conditions. So yeah, I would say that has been the major change. And in this search for the product market fit, we've realized that it's also important to focus to be super cash efficient.

 

15:34

to build instead of experimenting with three, four products, it's better to experiment with one product and to testing, but testing with a margin of safety rather than just testing every single perspective. Can you, for the benefit of my listeners that are not deep tech founders, walk us through actually the product in its current state

 

16:04

how are you creating the ability to identify sites that have better resources, more efficient? So what's the actual tech stack and how are you able to then think about monetizing that? Okay. That is a great question. So we have a product called Alchemist. It's a mineral exploration tool where we integrate remote sensing capabilities and state of the art artificial intelligence algorithms.

 

16:34

in order to prospect the areas that have potential for critical minerals. So we use remote sensing in a non-invasive way so we can explore for these minerals. So the way we've integrated a platform is in two components. One of them is the platform itself, which is what the customer interacts with. And the other thing, the other component is...

 

17:02

the what we call the license labs, which is essentially a very sophisticated platform that in the backend allows for the exploration and integration of AI capabilities. So that's the way we've structured it. I think with this advance that has been going on with AI and remote sensing capabilities, I think it's gonna get very exciting in the next few years.

 

17:32

So we love it. In terms of monetization, definitely. We've thought of some interesting approaches to it. Excellent. So Oscar, in continuation of my question around challenges of an entrepreneur, would you add any challenges as being an immigrant founder? Yeah, Brenda, that's a great question. I do think.

 

17:59

as an immigrant founder, you get a different perspective and probably you also lived it when you were in Spain. Yes. But one of the major things is figuring out how to build actually a business from scratch in a completely different legal system in a completely different landscape and building a network out of scratch too. Because you come from, in my case, I come from a university that like...

 

18:28

where I don't have any connections here. And then it's important to learn how to knock doors and how to search for opportunities out of zero. That is one of the major challenges. The other one is culturally, and I've seen it not only as myself, but also from friends that come from Australia, that come from India, that come from Japan.

 

18:55

that you see that there are some things that you need to be familiar with so that you can make sure to do the things in a diplomatic way. Okay. So I think that's also important. And that's those are the things that people don't tell you about. And the third one is definitely the immigration system, which is, you know, when you're trying to start a company here, you don't even know

 

19:24

like whether you're going to be able to do it, if you're like allowed, if you can sell something because it can be defined as work. So early in the beginnings of Lisus, that was our major concern. It took us a while to figure it out, to do the green card application, things like that. And once like you solve it, you are like in an even field. But yes, an immigrant, those are things

 

19:54

a long time and that we have in the back of our mind all the time. I've seen it with many, many founders and it's always a funny to see that we share the same challenges. Thank you for sharing. So, you know, the founders podcast is not solely around deep tech. So I have a lot of listeners that are business owners or founders in non deep tech. So could you describe

 

20:24

the business model of lysis. You talk about full stack, right? Business model. And I really would like you to get into the weeds to provide some more context of what is the product and how is it scaled and how do you monetize it? Definitely. Yeah, we're product Alchemist. It's a mineral exploration product that we use to search for critical minerals

 

20:54

And our business model is a full stack play. And essentially this means that we are not using our software and selling it by providing services. Rather we are using it as a tool or as leverage so that we can generate revenue in a faster way. To give you kind of like a better explanation or like a more in depth perspective on the full stack business model.

 

21:24

I would say when there is a transition or a big opportunity such as the one we are living now, it could be the energy transition where you are living this shift to the electric vehicle. So it could be a long time ago when we transitioned to the World Wide Web or when we started using the cell phone. All of these changes.

 

21:54

are defined by two waves. You have the first wave where there is a companies that try to solve and to actually serve a market. And there are companies that serve the companies that are trying to serve that market. So full stack means that you are, instead of being a service provider in a market, you're actually the solution provider. In the case, for example, of...

 

22:23

vehicle electrification should be the most common. There are companies that at the beginning, they started to focus on actually selling vehicles and electrifying. And there were after that, the second wave, a lot of companies that were trying to serve the market of electric vehicles through battery analytics, through efficiency, through different materials, but the big opportunity

 

22:51

in our view was actually in being the one providing the product. So what we're doing at Lysus is being full stack and becoming a materials company since the beginning. Yes, we have an amazing platform, Alchemist, and we use it to partner strategically with the miners, but we see a lot more value and as a company in being the actual solver of the problem and being the actual supplier of

 

23:20

the materials rather than just serving miners and serving companies that are focused on providing materials for batteries. That's why we think it's really an interesting business model and most importantly because full-stack businesses have proven in history to provide much better opportunities for revenue. Let's say

 

23:48

Some examples are Flexport, for example, SpaceX, companies that since the beginning, they tried to solve the problem rather than just being a service provider. Excellent. I also am thinking of Atlassian. They created quite a bit of work tools for developers of code.

 

24:17

Jira is one of their products, but they built, right? So Last scene is one of the companies, it's out of Australia, funny enough, created a lot of enterprise value early on and their tools are pervasive in the engineering teams that are building code today. So that's the analogy that I found while working with Lysis trying to get out of clean tech and looking at other.

 

24:44

There's similar analog businesses. Yeah, no, Atlassian is a great example. And we use it on a daily basis. I bet. We use all the tools, and it's amazing. So that kind of thing we have. Right. And we just had a great segue into clean tech. So Lysis is full-stack working in one of the deep tech sectors or verticals of clean tech. What are some of the things you're

 

25:14

clean tech market right now? Yeah, that's a great question. You know, the most interesting to me, of course, is critical minerals. It's probably the most boring, but it's also the one where we're gonna see the most exciting changes and advances. Some other things that are interesting are new materials. That is really interesting to me, because I think there is gonna be big opportunities in new materials and in...

 

25:44

in nature-based solutions. That's also something that's very... Right, synthetic. So within the biotech applied with nature. Exactly. And yeah, and I've been exposed also just to new techniques applied to solar panels that increase the efficiency. So there's always, it's all about efficiency, right? To compete with...

 

26:12

Oil and gas, right, in terms of the parity or gas lead for your car, right, electric vehicles. Yeah, no, I agree. Yeah. And something that is really interesting, too, I think that in the future, like, I envision a world where materials are going to be produced differently. And we are going to leverage nature to produce these materials. So I've seen, for example, very interesting companies that are using nature to produce

 

26:42

to separate minerals, for example, or that are using it to produce different type of materials, modifying it, et cetera. Of course it has its risk, but I think it's really interesting to see organic-based solutions. So that is another one that is interesting. And the other ones are in energy. I don't think that our energy system is gonna change drastically, but I do think

 

27:12

there is gonna be a lot of changes in how we use energy, how we store energy, yeah, what is the way in which we use energy. Those are some things that are amazing to me and where I see a lot of changes. And yeah, probably we're gonna see very interesting models for carbon capture.

 

27:41

Dequestration. Exactly, yeah. And technologies to solve the problem in the point source. I am not that much excited about the kind of like carbon credits, things like that. But I am very much about the technological approaches to it and also innovations in transportation. That's also really exciting. It's the biggest sector in energy consumption.

 

28:09

Actually, transportation, people don't think that. I think it's right. I'm sorry, in the emission of CO2. Correct, yeah. And GSD is transportation. Right. And what about, this is actually a nice little conversation about innovation and clean tech. But what do you think about the space that Lysis is competing in? Right.

 

28:37

efficiency and better site identification where the rare earth metals or the critical minerals are. You've got other competitors that are looking at it in a different way. Can you talk about how the identification of rare earth metals is evolving across the world?

 

29:06

Yeah, that's a great question. It's definitely an interesting field and one that is very small, because of course, it has a lot of barriers to entry. So when people realize that it's not as easy as they thought, they leave it. So yeah, definitely all the founders that are working in this sector have heard of each other or know each other. So that is fun. I would say.

 

29:35

in the part of critical minerals, in the market of critical minerals, it's a really old school field. It's really old school. You're using tools that you have been using for a hundred years and they've been working really well. So the big opportunities are in bringing new type of sensing and incorporating it in the sector of mineral exploration. But also I think it's very important to continue using some of the things that

 

30:04

have been done really well and help them optimize their operations. I think the major innovation in the sector is not gonna be in the technology, but on the business model. And I think, and I've seen it like with all the companies, all the funds, everyone is trying to figure out the right business model and go beyond just the project financing and being a fintech company, which in reality, all the mining companies are fintech companies.

 

30:33

into being more of a company that can produce better returns in an interesting way. So yeah, I think it's one of the most exciting fields to be in because there is going to be so much innovation, but also innovation is not going to come in the way we think it's going to come.

 

31:03

you to provide my listeners how they may contact you personally, right? Oscar is CEO and founder of Lysis as well as your company contact details. How's it best to learn more about Lysis, Alchemist and yourself? Yeah, through the website, you can in the website, you can get into contact us. So what is the website? The website is www.

 

31:33

Lizusenergy.com. And then right there, you can request to contact us and then you're going to get access to our calendar. And as quick as that, you can book a time with us to chat. And then also, you know, we're emailing, which is partnerships at Lisusenergy.com. There we can also chat. And if you have any ideas, careers, or any interesting perspective, we would love to hear from you.

 

32:02

Excellent. And I love to do a round of questions to each of my guests that kind of mirrors what I do at Next Act Advisors. I talk about sustainable businesses, resilience, and purpose-driven organizations. Not one guest has the same definition, and it's fascinating to do a little round of questions here. What does resilience mean to you, Oscar?

 

32:34

Yeah. Resilient to me means a, I see it kind of like as a synonym of perseverance, which is even if you fall, you can fall a hundred times and you stand up and continue going. That's what resilience means to me, being able to get hit and keep going. And it's very necessary in the early stages of a. Possibly. I would say it's possibly much more necessary than.

 

33:04

having a good academic background or having experience as an entrepreneur. What I've seen is that the best entrepreneurs are the ones who are resilient and who keep going no matter what. Excellent. Perseverance. Purpose-driven enterprise. You know, the title that we chose for this podcast episode is a sustainable business model in a sustainable market. What is purpose-driven enterprise for you?

 

33:35

To me, purpose has to be holistic rather than just focusing on one specific thing. I think it's important to think holistically and incorporate different attributes to pursue the right purpose. So I would say a purpose-driven enterprise is a company that has a very clear north star and that has different paths to go and follow that north star.

 

34:04

That's the way I would define it. What would be licenses Northstar? I would say over Northstar is sustainability and not environmentalism. So the way we see it is that there is kind of like certain currents where companies tend to try to be only environmentalist without incorporating other aspects. Got it. So to us...

 

34:34

that would be the north star, like being sustainable rather than being just environmentally friendly. Excellent. And finally, sustainable growth, not to be confused with sustainability. What is sustainable growth? So what is that growth curve right for you? How to consistently grow a business? Yeah, that's a great question. Sustainable growth means, in my view,

 

35:03

considering the environmental aspects, but also considering a sustainable business model that can self-fund itself. So the way I would see it is, okay, you're gonna build a company of X. And if you're gonna build this company only thinking in terms of environmentalism, you are doing it not in the right way, because you also need to consider how you're gonna fund.

 

35:32

those, that purpose and that mission. So sustainable growth means constantly, constantly checking to make sure that you are doing it well, but also creating systems so that you can fund that mission. Very good. That's very holistic, as you as you suggested. Exactly. Final question. Did you have fun in the sandbox today, Oscar?

 

36:00

Definitely. Yeah. It's the first time that I do a podcast. And I love it. Really interesting. And there are many things that you don't get to share on a day to day basis. So amazing opportunity kind of like to talk about some of the things that we believe in. Thank you. I want to let my listeners know that we will be providing

 

36:29

the show notes and the release of this podcast during the month of February. And more importantly, the article you've mentioned about how to build a perfect team, right? And your eyes will reference that in the show notes, as well as how to contact the founder of Lysis Energy. And yeah, so thank you very much for joining me and the founders sandbox.

 

36:59

along with Oscar Negra of Lysis. This episode will drop in February and you will always find the podcast available on all major platforms, Spotify, Apple, and wherever you get your podcasts. So thank you for listening in and see you next month. Thank you, bye.