Turning Cells into Tiny Factories

Published May 5, 2022, 4:05 AM

Reshma Shetty is co-founder and chief operations officer of Ginkgo Bioworks. Her problem: How do you turn cutting-edge science into a sustainable business?

Ginkgo is a synthetic biology company. The idea is to make industrial products -- fragrances, or food, or whatever -- by genetically engineering DNA, sticking it into a yeast or bacteria, and getting the yeast or bacteria to produce the thing you want.

Creating a profitable synthetic biology business is a really hard problem. But if it does work, it could be massive -- like an industrial revolution with cells instead of machines.

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Pushkin. One of the strange things about making a podcast is you make the show, it goes out in the world. Your mom tells you she likes it, but you don't really know much about what people think of the show, and in particular, you don't know how to make your show better. And I really really want to make this show better. I want this to be a show that you look forward to every week, the show that you tell your friends about. And so to that end, please please please tell me how to do that. Tell me how to make what's your problem a better show, a show you like more. If there's some person you want me to talk to, or some subject you want me to cover, or something you want me to do differently, anything, really let me know. You can email me at problem at pushkin dot fm. That's problem at pushkin dot fm. Or you can talk to me on Twitter. I'm at Jacob Goldstein, just my name. To be honest, we don't get that many email messages yet, not that many people talk to me on Twitter. So I can guarantee you I will personally read every email and Twitter message you send with gratitude. Thank you. Now here's the show. Here's a big, wild idea what if scientists and engineers could turn yeast in bacteria into tiny factories that would manufacture everything from perfume to food to fuel. This idea has a name synthetic biology. People have been working on it for more than a decade now, and it's really hard. First you have to engineer DNA and then you stick it into yeast or bacteria in order to make the thing you want, the fragrance or the fuel or the food. And then you have to figure out how to do it at scale, how to make a lot of it, and also you have to make it cheaper or better than what's already out there. Really, the dream of synthetic biology is like a whole new industrial revolution, but using cells instead of machines. I'm Jacob Goldstein and this is What's Your Problem, the show where entrepreneurs and engineers talk about the world they're going to build once they solve a few problems. My guest today is Reshma Shetty. She's the co founder and chief operations officer of Ginko Bioworks. It's one of the biggest synthetic biology companies in the world. One big obvious problem that Ginko faces the company has lost billions of dollars trying to turn synthetic biology into a viable business. So the problem for today's show is this, how do you try and do this big, hard thing way out there on the scientific frontier and also eventually make enough money to create a financially sustainable business. We started our conversation talking about the original idea for Ginko, which came to Reshma and her co founder when they were grad students at MIT dreaming about the big things they wanted to do with synthetic biology. So you start a company. We did. We did. We started a company because we worked at a place MT, like most academic institutions, really focuses on doing new things. Right. Can you invent something new? Can you discover something new so that you can publish on it, Right, And that's what academia is built to do. And that's a really great thing because we should be discovering new things and we should be inventing new things. Yeah, but with biology, what we really felt was holding us back was not just doing something new or inventing something new. It was could you make the process of engineering biology faster, cheaper, easier. Yeah. And what was interesting is that we started working on that problem during grad school, but it just wasn't very celebrated. People were like, why do you want to make it easier for other people to do this? That seems like a dumb thing. Work on it, right, You're just building tools. You're not actually doing anything with the tools exactly right. And so there's a sort of skepticism even at a place like MT around spending your time tool building. Okay, And so we decided to start a company, candidly, not because I wanted to be a founder. I actually didn't want to be a founder. You know, I had never dreamt about starting a company before. But we felt that starting a company was the best way to work on this problem of how do you make biology easier to engineer? I read that some of your earliest customers were in the in the fragrance industry, and I thought going through that work you did might be a case study to understand, you know, what the company does and what kind of problems come up and how you solve those problems. Can you talk me through that work? Yeah? So when we first started the company, you know, we didn't have a particular technology, we didn't have a business model, we didn't have a way of making money, right, it was a great way to start a company. I highly recommend. But what we did have was that we were kind of voracious learners. We kept coming up with wrong hypotheses. Where we finally got some traction was actually looking at the flavor and fragrance industry. So it turned out that this is a huge industry. It's a multibillion dollar industry that almost no one's heard of. I certainly hadn't heard of it when we started the company. But they make all of the flavors and fragrances that go into household goods. Right, So if you go browse the DETERSI denial, you know, and you can probably smell some of the detergents and soaps and shampoos and whatnot that are in your local supermarket, you know, those fragrances are all concocted by the flavor and fragrance industry. So it turned out that there was this pain point in the flavor and fragrance industry where they wanted to use biology to manufacture their ingredients, but it just you know, it wasn't feasible at scale, and so they were really interested in using fermentation. This idea that you could grow yeast in a vat to produce flavors and fragrances, much like you might brew beer. And so cracking that nut was our first sort of realization, Hey, there's actually really a market or engineeredsels that could produce flavor and fragrance ingredients. Are you allowed to say specifically what you did or is it like that? So some of our earliest contracts were around things like peach flavor, coconut flavor, and so, so what specifically do you do? I mean, do you take some jeans from a peach and stick them in a yeast and the yeast makes peach smell? Is it like that? Yeah, basically, except you're not just limited to beach, because it turns out that, you know, biology has a lot of reuse and a lot of commonality, and so it might be the actually the best genes for making a peach flavor might not come from a peach. They might come from another species, which is kind of fascinating, right, And so you keep tweaking it and iterating on it until you're making a lot of your ingredient of interest. And so, right now, somewhere in the world, is there like a vat full of yeast, cranking out peach smell that's going to go into like soap or shampoo or something. There absolutely is, yes, So where is the company now? What's sort of what is the state of Ginko now? The span of what we work on is huge, right, everything from food to health, to act culture, to flavors and fragrances. So we started a joint venture with Buyer, the largest ad company in the world, working on essentially a biofertilizer, So being able to reduce the amount of fertilizer that we need to grow crops like corn by essentially engineering microbes to provide the fertilizer to provide the fixed nitrogen rather than fertilizer. And if you actually look at it, fertilizer is incredibly bad for the environment. The process by which we make fertilizer in this world, I don't know, It's like something like fertilizer is like six or seven percent greenhouse gas emissions. I mean, it's something completely interesting. So it's the production of fertilizer emits a lot of carbon dioxide into the atmosphere. So if you can if you can reduce the need to make fertilizer then that helps exactly solve the problem. Yeah, so can you sort of give me a comparison of the state of the world as it was when you were in grad school versus the state of the world that you have created now? In grad school, it probably take me nine months or so to basically design, build, and test twenty designs at a time, like twenty different Yeah, twenty different genes or to many different pathways. Maybe at a time that was like state of the art. How long would it take Ginko now to try twenty designs. Well, we wouldn't ever bother to try twenty designs. We only try thousands of designs at a time. Okay, It still takes a lot longer than i'd like. It still probably takes three months to kind of go through the whole cycle, maybe two months if we're lucky. So, if before it was you could try twenty designs in nine months, how many designs could you try now in two or three months. Now I'm trying thousands of designs in two or three months. Thousands Okay, So it's thousands of times faster than it was when you started. Yeah, and then I can learn from which ones worked and which ones didn't and even more intelligently do my next round of thousands of designs. And so is what you have built sort of like a factory for testing? Have you built like a factory lab? Yeah, it's it's essentially a factory for cell programming. What's it look like. It's a whole bunch of robots sort of placed in rows across the lab with these essentially train tracks that can move samples between the different robots, and so it's pretty cool looking. So like the robots are like robot arms, and what's going on the train tracks? Yeah, these these big arms that can basically move plates from one robot to another and train tracks to be able to move samples between the robots. To do the processing steps you need to either read the DNA or write the DNA, or put the DNA into cells or test how those cells are performing. So the robots are doing all of those steps. Yes, that's a dream after the break, a problem Ginko has not solved yet. How do you build a company based on this wild, radically new technology and also make a profit. That's the end of the ads. Now we're going back to the show. Kinko went public last year and the company is now worth billions of dollars, but Reshma and our co founders still haven't made the company work as a profitable business. They have revenue, but it doesn't come close to covering their costs, and so the problem of becoming a profitable company is what we focused on in the second part of the interview. It's impressive in a way that you know, it's continued to get funded and you've grown so big, and you have lost and continued to lose a lot of money. I feel like in the long run, that's a problem that you have to solve eventually, Like how do you solve that problem? So in our business, the way our business model works is when we collaborate with a customer on a self program, we get two different kinds of value out of the relationship. We get fees and milestone payments from our customers to help offset our dcosts, and we get what's called downstream value share. Downstream value share typically comes in the form of either royalties on products made using Ginko organisms or equity stakes in our customers. And we've been expanding a lot in the number of cell programs that we've taken on, but many of them are still in the development stage, and so essentially the way we ultimately become a sustainable business is as more and more of our cell programs successfully complete and recognize that downstream value share. That's where the rail like ultimate long term value potential of Ginko is. So you're basically saying when the investments you've already made payoff, that will do it. I mean, I get the math of what you're saying is that you've put a lot of money into things, and if they make a lot of money in the future, then you will be profitable. Is that right? Yeah? I mean it's like, um, you know, think about it. If your typical like pharma biotech company, they lose the hundreds of millions of dollars, right, but if the drug works, there's like a big, big enough path at the end to justify that upfront risk. Basically, it's sort of all long shots, right. The drug companies essentially make lots and lots of long shot bets and most of them don't work, and then once in a while they have a huge winner that makes up for all the ones that don't. Exactly, but in our case, we instead of a company that is betting up like typically in pharma or in biopharma, you know, the company might have one bet, right, one long shot bet, or maybe a couple of long shot bets. We're a platform company, so we actually have lots and lots of long, long shot bets, and you know, and honestly, some of them are not going to work, right. You know, some cell programs won't work, or the cell program will work, but it won't commercialize the way we think, or whatnot. The question is will there be enough winners, and will they be those winners be big enough to justify the whole thing? And we're betting that they will. I recognize that we're sort of at a time will tell ending of the narrative, and it's valid. It's clearly true. Time will indeed tell. I'm just trying to think of how to parse it. I mean, I guess another way to think about it is whether and to what extent these various bets will pay off. Let me flip the question on you, right, yeah, please please, Here's the way I look at it. Right, the world has a lot of serious things that it is facing, right, climate change, pandemics, you know, supply chain issues, right, having enough food to feed our planet having enough clean water to provide to our planet. Right to me, the cost of not doing something is unfathomable to me. So I would much rather try and fail at this, which at least has gives us a shot of solving some of these pressing world problems, then not try at all. In a minute, the Lightning Round, where we learned Rashma's favorite micro organism, her least favorite trait in a coworker, and the one piece of advice she'd give to somebody who is trying to solve a hard problem. Now let's get back to what's your problem? Now, it's just the lightning round. Can we do the lightning round? Absolutely? What's your favorite micro organism? E coli? That's what I did. My PhD on tell me why E Coli is great? So. Equali is this little microbe. It's found in every person's gout, smells awful, smells like pooh. Right, it's part of what makes your poo smell like pooh. And we did a project when we were at MIT mentoring a group of undergraduates to change the smell of ecali to smell like weren't a green and bananas. So while Eli gets a bad rap for smelling bad, You can actually reprogramage to smell pretty good. What's your favorite trade and a co worker? Passion and curiosity? What's your least favorite trait in a co worker? Self promotion? If you have a ten minute break in the middle of the day, what do you do to relax? Take a walk through the lapse? What is one piece of advice you would give to somebody who's trying to solve a hard problem? Better to try and fail than not try at all. It sounds trite, right, but you know, the way I could get myself to a place where I felt comfortable, you know, making the leap and starting a company is that, you know, starting a company working on really hard problems, you may or may not succeed, right. You just don't know. It's a crapshoot, right, And so what you want to do is be able to get to yourself to a place where you'll never regret try, right. And the nice thing about hard problems and important problems is that it's very hard to regret working on them. Rash Machete is the co founder and chief operations officer of ging Go Buy Awards. Today's show was produced by Edith Russolo, edited by Robert Smith and engineered by Amanda kay Waugh. Our theme music is by Luis Gara. A huge team of people makes this show possible. This team includes, but is not limited to, Jacob Weisberg, Milobell, Leta Mulad, Justine Lang, Heather Fame, John Schnars, Kry Brody, Carli Nigliori, Christina Sullivan, Jason Gambrel, Grant Hays, Eric Sandler, Maggie Taylor, Morgan Rattner, Nicole Morano, Mary Beth Smith, Royston Baserve, Maya Kanig, Daniella Lakhan, Kazeia Tan and David Clover. What's Your Problem is a co production of Pushkin Industries and iHeartMedia. To find more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts, or wherever. I'm Jacob Goldstein and I'll be back next week with another episode of What's Your Problem

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