Episode Transcript
[00:00:09] Speaker A: Hello and welcome to Hacking Kaizen. I'm Graham Newman. Today we're joined by Cicari Kizakul, co founder of Absinthe and Nature to need biomaterials here in Bangkok to talk about how best to scale teams and build sustainable futures. Our discussion reveals the significance of maintaining consistent values as an organisation grows beyond its founders. Well, explore the nuanced concept of authenticity at work. How it's not all about showcasing every facet of oneself, but rather presenting a version that aligns with team objectives and company culture, fostering effective collaboration and a professional atmosphere. As the company scales, we'll also turn our attention to nature to need pioneering green raw materials company at the cutting edge of the bioplastics revolution, developing composites that not only match but often surpass the performance of conventional plastics. And these materials are lighter, stronger and cost effective, presenting a compelling alternative poised to significantly reduce our dependency on fossil fuels. We'll ask Cesari to share his insights into the key bioplastic markets, including home appliances, consumer electronics, automotive and building materials, to not only lessen the environmental footprint, but also propel the market towards more sustainable practices. Stay with us as we navigate the crossroads of leadership, technology, sustainability and human ingenuity.
[00:01:42] Speaker B: You are part of the senior leadership team at Absinthe, building it into one of the top UX UI agencies in Southeast Asia. Can you tell us about that?
[00:01:51] Speaker C: Yeah, so I was with absinthe for a little bit over ten years. I was on the founding team, you know, back in 2012, and it was a great experience to kind of come in very early to a company and help build and scale it from, you know, less than ten people when I first started to nearly 150 people when, when I left to start my new venture. So it was a great experience. I mean, I first came in, joined my friend who, who was the original founder of the business, Bob Gallagher, and he asked me to kind of help come in to help grow the business. On the customer development side, I've done a lot of enterprise and b, two b, sales and consulting and stuff like that. So he just needed help with, with everything basically. And it came in and I would say wore many hats within the organization as we grew the company. Originally it was around sales and customer development, but we didn't have any project managers at the time, just a few designers and developers. So the clients that I would bring on, I also managed those early projects, primarily with startups, but also with some large corporations in the early days and as we scaled and worked more with larger corporate clients, mainly in Thailand but in the region, we were able to hire more people to do various things, such as project management, QA testing, more designers, and things like that. So my role kind of evolved from sales into client service, so kind of overseeing all the activities we had for clients, both on the sales side and also delivery, you know, of the projects and customer attention and all that. And it's really interesting, around 50 or 60 people. You know, Bob and I kind of looked at each other and said, maybe it's about time we, we have an HR manager. You know, the team's getting so big, and, you know, I always saw the importance of, you know, developing our people and taking care of them and whatnot. And I, you know, we tried to do what we could before we hired an HR manager, used various software tools, and started doing one on ones performance reviews. But it just got to be too much, you know, for basically the founding partners to do. So. You know, I dabbled a bit in HR, then we hired a professional experience HR manager. That helped us. A bit. Later on, we hit a constraint around financial management of the company. So Bob was kind of leading that till then. And we hired a part time, very experienced CFO to come in, and he helped us tremendously in terms of cash flow management and collections and things like that. So up to that point, to give you a little anecdote, on paper, we were profitable. Everything looked pretty good, but we were always cash constrained. And after we got the CFO on board, he helped us with our collections policy, coming up with annual or bye, biannual price increases, things like that.
[00:04:32] Speaker B: Right.
[00:04:33] Speaker C: We were hiring people at increasing rates, but we weren't able to raise rates to clients and things like that. So, yeah, I would say those two areas, you know, like key hires, helped quite a bit and just helping the company grow up, you know, prior to joining absinthe, I worked at a management consultant. I worked at multiple big companies.
So I think that that's one of the areas where I was able to bring value to absinthe as we scaled.
[00:04:56] Speaker B: And from a senior exec position, let's talk about strategic vision and alignments. Can you describe how that evolved in terms of the vision as you scaled?
[00:05:06] Speaker C: Yeah, yeah, it's interesting. I think some founders and some early stage companies, they might be very intentional about this, meaning that they might set a vision or have a vision from day one or close to day one. They have a vision, very clear plan and roadmap. Okay, things might change along the way, but the destination is clear. Other businesses, it might be more practical in the sense that, okay, there's an opportunity here, we have the skills, or we can build the capabilities to address this opportunity, solve this problem that customers have. And it's just about selling widgets, right? Selling widgets or selling your service because there's demand for it. I think in that type of situation, maybe a vision is not as necessary, at least in the early days. Right. I can say for absinthe, in the early days, we didn't have an official documented vision. It was more like, okay, early days of mobile, right? This is the early 2010s, right? And if you think about when the iPhone came out and the app store came out, that was 2007, right? Where Steve Jobs had that keynote where he talked about the app store and all that stuff. And absinthe was founded in 2011, so only four years after that, it was pretty early days, right? And my business partner, I would say he had a vision of where the market was going, but not necessarily a crystal clear official vision for the company. Where he saw the market going was, there's going to be a ton of apps in the app store. App development is going to become a commodity, right? So how do we. How do we stand out from the crowd?
[00:06:34] Speaker B: Right?
[00:06:34] Speaker C: What value can we add to clients, businesses, startups that want to build apps? Right? And the value add was around, how do we help them monetize their apps? How do we come up with really effective designs, engaging designs? So people would keep using the app rather than downloading it, testing it, having a bad experience, and never using it again, or even deleting it.
[00:06:55] Speaker B: Right.
[00:06:55] Speaker C: So it was around the user experience as a value add. Um, and it was around monetization on the backend after the app goes on the App store as another value add. And I think we were quite unique in the early days, because the early days, it was kind of like everyone wanted an app built. So it was kind of like, hey, we'll build an app for you. Forget if the UX UI is good or bad. It's just, we'll build that for you. Forget if it'll make money for you or whatever. But I think because both Bob and I are, we're analytical, but we're not coders. We didn't come from a deep technical background. It was more the business or marketing perspective. And I think having that perspective, it really resonated with clients that we were not just building something for them, but we were helping them succeed in a business context.
[00:07:35] Speaker B: I want to talk about talent acquisition and acceleration, particularly now. There appears to be a worrying trend amongst founders who have scaled successfully and are running large SME's, let's say a headcount of about 50. And they don't know how to motivate Gen Z. What advice can you give them?
[00:07:52] Speaker C: Yeah, I don't know. My advice might be a little bit contrarian, and I wouldn't say it's the best. Maybe it's not even the best answer. My approach is like, okay, I read a bit about the different gens. There's definitely differences, but for me, my approach is much more personalized and individualized rather than generalized. So what that means in practical terms is I really try to understand for each person kind of what motivates them. Right. What they're looking for. Yeah. What they're looking for in terms of not only a job, a career, but holistically their life.
And I think there's certain universal truths that are kind of timeless.
[00:08:30] Speaker B: Right.
[00:08:30] Speaker C: So things like working smart is important, but like hard work will always be. I think it will always be important. It will always be rewarded, it will always be recognized. Right. Communication, the ability to have difficult conversations, to set expectations with a customer, to ask for a raise, to manage up or manage down. I think I kind of focus on those things. To me, I don't feel like there's a particular problem with, you know, the current generation or previous generations. It's more like understanding that person's motivation. You know, I've talked to some friends, for example, in the US, who are involved with HR, and one example comes to mind where they say that some of the younger workers in their organization, they say they can't be productive without a emotional support animal by their side in the workplace. So I guess this would be bringing their dog or cat or whatever to work or stuff like that. And I've never encountered that here in buying businesses. But I guess if I did, and that person was. I guess my point is, if that person was really a high performer and that's what they needed, then I would try to accommodate them, you know, but, you know, maybe I'll get some slack for saying this, but I also haven't met many high performers that do require something like that. They're a little bit tougher.
[00:09:43] Speaker B: Yeah, because this is a real hot topic at the moment. There are many founders and senior execs that are asking the same questions of, you know, I simply don't know what to do anymore. And the culture of work has changed since when you started 20 years ago. And I guess there's something in purpose and values alignment and career development and continuous learning. And a little bit more of an empathetic management style than perhaps existed when we entered work.
[00:10:11] Speaker C: I would say. The other thing is, the way I look at the work world is maybe this is influenced. I mean, it's influenced by a lot of businesses and business leaders I respect. But the one example that pops to mind now is Disney. So the parks. At Disney, the people that work at the parks, they don't call them employees, but I think they call them, like, cast members. So, okay. You know, you can say that's. That's good or bad or whatever, but. But what I take away from that is that basically, we. We play various roles in our lives, right? At the end of the day, we're the same people, but. And we might have. We should have consistent values throughout our roles, but our behavior changes, right? When we're with our family, with our parents, with our friends, with our kids in the workplace, the behavior that's considered acceptable or contributing to that setting and environment, it changes. I think that's natural, right? So my point in using that Disney example is that, you know, they say that when you're working at Disney, you're a cast member. No matter what's going on at home, what your problems are, are who you are, you're fulfilling a role while you're at the park working.
[00:11:07] Speaker B: Right.
[00:11:07] Speaker C: And there's certain expectations you have for that role.
[00:11:09] Speaker B: Right.
[00:11:10] Speaker C: Be pleasant to customers, you know, that kind of stuff. And, you know, I kind of feel the same in the workplace, and I think that's the way we've managed the company, and I'll probably continue to manage other companies I'm involved with, which is like, yes, we respect you as an individual, but when you come into work, there's a certain role that you play, and that doesn't mean that you can't be authentic, but it's a version of yourself, right, or a subset of yourself where you can contribute as a team member in this particular workplace. You know what I mean? So there has been some. I have been frustrated at times, you know, with, let's say, maybe some. Some younger colleagues where I didn't feel like they understood that, you know, in order for our business to thrive and for us to pay good salaries, we need to satisfy our clients. And to satisfy our clients, we have to go above and beyond and do certain things. Right. You know, we can afford privileges like hybrid work or work from home or the benefits we have to the extent that we can really provide good service to our clients and they want to continue paying us. So, again, maybe it's a little bit old school, our generation, but I still feel like in a business, right, the business is to solve problems and serve customers. So you got to make sure you do that first. Then you can have all the other nice things. You can't flip it around. Yes you have to give a minimum level of respect and benefits to your employees, right. Because they're the ones that take care of the clients. But there has to be a balance.
[00:12:25] Speaker B: So what's making you tick right now with nature to need Thailand? What's the value proposition?
[00:12:31] Speaker C: So the specific business I'm in and the problem we're trying to solve. So the business is called nature to need, nature to need biomaterials. So we're looking at the plastics industry and the plastics industry. As many people probably know, plastics are made from crude oil. It's a waste product of refining oil. Plastics, if you look at it like a snapshot in terms of their cost and their usage, they're really great. Actually where they're not so good is if you look beyond their primary use and look at things like downstream like plastic waste or you look at how much energy is used in extracting oil to make fossil fuel based products and stuff like that. The carbon dioxide emitted in creating polymers and plastics, it's not so good, right? It's not so good for climate change. So our solution is that we've come up with a renewable alternative to fossil fuel based plastics and it's actually a composite. So what we do is instead of using 100% oil based plastics we're able to reduce that down to about 50% oil based and the other 50% it's bio or renewal based. So we're using agricultural residues. So these are things like rice husks, sugarcane biogas. Yeah. The leftovers from agriculture. Yeah, yeah. So it's not as controversial as let's say conventional bioplastics, which, you know, you're growing the crops solely to make polymers and plastics from it. We're using kind of like leftovers from, from the farming process to reduce the oil based content in these materials.
[00:14:01] Speaker B: So am I right in thinking this is a b two b model and you are producing the raw green bio based materials in order to sell to manufacturers who hopefully responding to customer demand in being more biodegradable aware.
[00:14:16] Speaker C: Yeah, yeah that's exactly right. We are a b two B business. At least right now we are. You know we've kind of thought about coming up with our own end products and selling to consumers as well to see if the demands there or actually to generate demand more pool. But currently what we do is the way plastics are made, whether they're fossil fuel based or agricultural based, you create these little pellets out of them, and those pellets are melted down and shaped into all the products, plastic products we.
[00:14:43] Speaker B: See in the world using extrusion techniques and.
[00:14:46] Speaker C: Yeah, yeah. Different molding techniques. So extrusion, right. Those are things for, you're pushing things out of an opening to make like pipes. Right. But there's also injection molding, blade molding, blow molding. Yeah. Thermoforming, things like that. So we make those raw materials. And one of the benefits of our solution is that it doesn't require any new equipment, any new tooling. It's a drop in replacement for oil based plastics.
[00:15:10] Speaker B: It's inevitable that likes of SEg are looking at this as well and ptt to an extent. So where's the sweet spot for you in the market?
[00:15:18] Speaker C: Yeah, it's a good question. And we've talked to both of those companies and more and, you know, they're definitely interested, but it's a bit of a wait and see from them right now. Their main businesses have been oil based plastics and polymers for decades. So they have vested interest in that and basically keeping it going as long as they can.
[00:15:38] Speaker A: Right.
[00:15:38] Speaker C: I mean, I think we would do the same if they were in their, we in their shoes. And the, the way they're tackling kind of sustainability or climate change now in their business is, um, they're investing more in recycling technologies. Right. So not changing the, the actual materials, but trying to increase the recycled content, which I think is a, is a great solution as well. Um, with, with our solution, it's kind of a complementary to recycling. Um, a lot of people might not know this, but, um, recycled plastics actually cost more than, than what they call virgin plastic. So virgin plastics are fresh plastics from crude oil. And the reason recycled plastics cost more is because of the reverse logistics of collecting that plastic, sorting that plastic, separating it from other types of trash and plastics washing and stuff like that. So that's really expensive. I mean, it's more feasible in developing countries like Thailand, in more developed countries where the labor cost is more expensive than recycled plastics actually cost more. You know, so I would say we're not, we're not competing with recycled plastics. We're providing another way to reduce the dependence on fossil fuels and another way to keep costs low. But, but to get back to your question about, you know, petroleum chemical companies, how are they viewing our solution? They're viewing it with interest, but they're not rapidly embracing it yet because they're still going the recycling route for now. I think with time as demand for that goes up, it might push up the price and they might have to look at other solutions like ours. But there's also some plastic applications where recycling is not really in the mix.
[00:17:05] Speaker B: Right?
[00:17:06] Speaker C: So when we talk about like building materials or home appliances, consumer electronics, basically plastic products that use for years and years, then it would be good to recycle those. The end of life. But it's not as pressing or urgent as single use plastics.
[00:17:21] Speaker B: Precisely. Precisely. And this all comes down to the economy of scale. How can we make green based bioplastics cost effective at scale such that it can compete with virgin based polymers? And we're hearing good things about polyhydroxyalkanotes, phas. These are raw materials from starches, sugars and plant oils, finally reaching an economy of scale as a viable biodegradable plastic. So we are getting there.
[00:17:45] Speaker C: We're heading the right direction, but we're still quite a ways from getting the same cost or lower cost. So you mentioned PHA. You know, one application of PHA would be like single use clear cups for cold beverages. They might use PHA plastics in coffee stores or any restaurant that has takeaway cold beverages, right. And there's some large companies investing in PHA production, but the cost is still much higher than oil based plastics, you know, like five x eight x ten x. And that's just, unfortunately, it's not feasible.
[00:18:18] Speaker A: Right.
[00:18:18] Speaker C: I mean, I think companies and consumers might pay a little bit more, some might pay a little bit more. Probably most won't want to pay more. But to ask them to pay five to ten times more for cups, that, I don't think that's practical. So we still have a long ways to go in terms of getting the cost curve down, you know, with, with our technology, our solution, you know, we're not going after single use cups, you know, but for other more durable plastic applications, we already are at unit cost parity with oil based plastics. Some applications were a little bit less, ten to 15% less. But I believe to really get the market to flip to a more sustainable solution, we have to try to get the cost down even further. So it's kind of like a no brainer in terms of economics. Right. And the environmental benefits almost are secondary.
[00:19:03] Speaker B: Yes, exactly. I think this is about looking at technological advancements to improve the yield and efficiency of bioplastic production.
[00:19:11] Speaker C: Yeah, for sure, for sure.
[00:19:12] Speaker B: I guess the other question is a lot of this could come down to marketing. Coming down to the sentiment and inclination of manufacturers and aligning that with the needs of consumers. Consumers are very smart. Their purchasing decisions are based on ethical considerations as well as price point. And I think there's a golden opportunity here. If we look at Southeast Asia, particularly Thailand, Malaysia, Philippines, Indonesia. There's a huge market for these types of products. And we have the benefit of having agricultural based raw feedstocks for this as well.
[00:19:42] Speaker C: Yes, yes for sure. I mean that's one of the reasons, you know, we're expanding into Thailand because of the agricultural infrastructure.
[00:19:48] Speaker B: Right.
[00:19:49] Speaker C: And the supply of low cost feedstock. Thailand a lot of people might not know but Thailand's one of the largest exporters of plastic. So there's an established polymer industry ecosystem here as well. And I think. Sorry, could you restate the question about.
[00:20:06] Speaker B: Certainly the question was about as a company nature to need are effectively an OEM supplying raw materials. But in terms of bringing that to the consumer a lot of that is about marketing and the perception of how you actually position that value to consumers.
[00:20:21] Speaker C: Yeah, so the consumer. I think there's good potential for consumers to demand more sustainable products from the brands, the large companies that they buy from. At the same time, back to the previous point we were talking about the cost and the economics. They're definitely still important. Right. So if you ask someone, let's say you know I think single use plastic is an easy example. So if someone normally pays let's say $2 for the coffee and now they have to pay $3 in order to have a more sustainable cup that's going to be a tough sell for the majority of people. Yes there's going to be kind of a niche or the high end market that's willing to pay a premium for a more eco friendly product. But for. For most consumers I think asking them to pay more than five or 10% is going to be challenging. So I think for consumers yes there's definitely room for education, a room to try to generate pool so that manufacturers and brands switch to more sustainable solutions. But there is a limit to the premium consumers are willing to pay. Right. So I think that's what we were saying earlier. It's got to be a strong part of the value proposition, has to be the cost parity or the cost savings ideally then it becomes a no brainer for businesses because they can make more of a margin by switching to a more sustainable product anytime it costs the same or a little bit more. I think that's a challenge for most manufacturers and brands, I think it's also.
[00:21:40] Speaker B: A cultural thing as well. And it is unfortunate that Thailand has this love affair with single use plastic. And why on earth in 711 single bananas are sold in plastic wrappers is beyond me.
[00:21:52] Speaker C: Yeah, I mean, it's really for convenience. Right. And, yeah, the consumer, I think brands and manufacturers, they try to cater to consumers. If the consumer's not demanding something, then they probably won't switch unless there's some legislation forcing them to switch, you know, but, um, you talk about, you know, single, single bananas being plastic wrapped. You know, I've actually looked on, on the website, sustainability website of the company that does that. And to their, to their credit, though, they are trying to do things and something they've done is they use less plastic on those wrappers. They're thinner.
[00:22:23] Speaker B: Right.
[00:22:24] Speaker C: And they're actually measuring. I was actually surprised how much they're doing, how much they're measuring. You know, ideally they wouldn't be using plastic wrappers at all.
[00:22:30] Speaker B: Right.
[00:22:30] Speaker C: Or finding other, other non plastic ways to wrap those bananas. But, but I think the main thing as consumers, you know, it's, this is, this is one of the big challenges really, is, you know, we're in a consumer driven, convenience driven type of society, right. Not only Thailand, but I mean, this is, this is probably started off in the west. It came to Thailand. Now the west is trying to correct for problems they've caused in the past and hopefully those will come to Thailand as well. But I was reading, I've read that, let's say Heinz ketchup, for example, when they came up with their single use, little pouch, their sales numbers, like, took off because it solved the consumer problem. It was, yeah. Who's going to carry on a bottle of ketchup in their, in their purse or their backpack or brief briefcase all day, right? They go to lunch or they get takeout or take away and there's some packets of ketchup in there. That's great. It's really convenient. But what's not great is what happens after that, right? I mean, like out of sight, out of mind, right? We throw stuff in the trash and then we don't think about it anymore. It doesn't pile up in our living room, up somewhere else. It doesn't affect us until it affects us. Right? So there's, there's more awareness with like microplastics and, you know, studies showing that we ingest, you know, a few grams of microplastics a week or something like that. So it's, it's it's sad, but I think that's. That's just kind of the way humans change and evolve. You know, once. Once we encounter a crisis or once something that was out of sight, out of mind, comes back and impacts of us individually, negatively, then there's more awareness and more motivation to change how things are.
[00:24:03] Speaker B: Last question, which is very open. I don't want you to consider the following. What would you like to see the impact nature to need can deliver culturally, socially, and economically?
[00:24:13] Speaker C: Okay, that's a big question. Let me try to handle that. So really, my ideal future with this business. Right. So right now we're working on a bio plastic composite that can replace most types of durable plastics. And doing so, you know, the performance is good. The plastic is actually lighter, it's stiffer, it's stronger, costs the same or a little bit less. So it would be wonderful if we could replace a good portion of the plastics out there in the world. Right. So we're looking the markets where we're targeting right now, the industries we're targeting, as I mentioned, are like home appliances, consumer electronics, automotive. We have a couple projects with automotive interiors and building materials. Right. So those are the market's main markets we're targeting. If we can have some impact on those markets, it would be great, because then we would. We wouldn't need to extract as much oil to make plastics. But after that, you know, it's like, how do we move away completely from. From fossil fuels? So I think from the plastic waste problem, single use problem. There's a lot of companies working on bio based, biodegradable plastics for single use.
[00:25:18] Speaker B: Right.
[00:25:18] Speaker C: They're getting the cost down. A lot of these companies are using seaweed, for example, where it just kind of, like, dissolves. Sometimes it's even edible. So the task there, again, is to get the cost down. So it's a no brainer for businesses, and.
Businesses and consumers will switch over, you know, and those are closer for single use. I mean, a lot of single use plastics you see these days, it's a little bit misleading because you see on the packaging or printed on the. On the cup that it's compostable. What it doesn't say, or at least in this part of the world yet, is that it doesn't say that it needs to be composted in an industrial facility. You can't just throw it away with the trash, or you can't even compost it at home. And even an industrial composting facility where, you know, basically it has a higher temperature to break down that plastic. Industrial composting facilities, sometimes they don't like to take these type of plastics because they do take longer to break down. So when they mix them with other things and they go, look at the compost, compost, the plastics are not completely broken down yet, so then they have to invest in kind of a different line of equipment to compost the bioplastics. So it's, it's, it's, it's a good solution, but it's not a complete solution. If you throw away industrial compostable plastic now, most of the time it still goes to a landfill. Maybe. Maybe after, you know, a couple decades, it'll completely break down, which is better than not breaking down at all, right?
[00:26:35] Speaker B: Better than 400 years?
[00:26:37] Speaker C: Yeah, yeah. Depending on what numbers you look at. But. But, yeah, it'll break down eventually, which is. Which is better than not breaking down at all. But ideally it should break down within weeks rather than decades. Right. And ideally it's not creating methane and other greenhouse gases, which, which it does if it goes to a landfill.
[00:26:56] Speaker A: My thanks to our guests. It's Sari Kitsikle there on our website, you can find the program notes and a reading list for this episode. Hacking Kaizen is produced by DSA and Nikki edited the show. We'll be back at the same time next week, but until then, from me, Graeme new. Many thanks for listening.
