Having worked in tech as an entrepreneur and investor for over 25 years, I remember the exuberance of the Web era of the mid to late 90s, which yielded enduring enterprise software companies. The hallmark attributes of many giants were that they had a painkiller value proposition, combined revolutionary approaches that integrated into existing architectures, and enabled enterprises to leverage their current developer resources. Today, we are squarely in the AI-first era, with enterprises rushing to adopt the benefits of AI. With the announcement of our lead investment in MindsDB’s $25 million financing round, I am proud to welcome Jorge, Adam and the MindsDB team to the Mayfield family. I believe that as the industry’s first cloud to serve AI intelligence logic, they will play a role similar to the legendary web application server BEA Systems/Oracle and supercharge enterprise adoption of AI.
To understand the role of an AI intelligence logic cloud, we need to go back in history to look at the idea of a three tier architecture, a well-established software concept that organizes applications into three logical and physical computing tiers: the presentation tier; the application logic tier; and the data tier, where the data associated with the application is stored and managed. During the web era, the presentation tier was dominated by web servers on which websites were built; the middle tier by application logic servers which housed the logic and transaction capability; and the data tier by databases. In today’s AI-first world, there’s a lot of activity on the presentation tier with consumer interfaces powered by multiple AI frameworks; data repositories have grown beyond SQL to include many NoSQL and data lake leaders; but the middle tier of a unified cloud to serve AI intelligence logic is still nascent.
MindsDB, which grew out of an open source project started over five years ago, is growing into the must-have middle tier cloud to serve AI intelligence logic, driven by three attributes:
A framework- and data-agnostic stance (currently supports 10+ front end AI frameworks and 100+ data sources);
The technical breakthrough of adding AI tables to existing databases which enables users to identify patterns, predict trends, and train models;
A data-centric approach that eliminates the need for ETL and minimizes data exposure risks.
As a result, existing developers can grow into an army of AI engineers who quickly deliver production-ready applications, thereby enabling enterprises to generate revenue, but also control costs by leveraging in-house talent.
Building on the momentum of its open-source project, MindsDB has achieved several key milestones:
Adding more than a hundred platform integrations, including with big tech players like OpenAI, Hugging Face, Snowflake, MongoDB, Databricks.
Being recognized as one of Forbes’ Top AI 50 Companies and named as a Cool Vendor in Gartner’s 2022 Data-Centric AI and multiple Hype Cycle reports.
Transforming into a mature open-source project with more than 500 code contributors, 16k+ stars from the community and more than one hundred thousand installations.
Launching a Cloud Enterprise version, proven by tens of thousands of developers.
We believe that MindsDB is well on the evolution path from open source phenomenon to a must have cloud that serves AI intelligence logic to enterprises. This will firmly establish it as a key player in the AI-first landscape, similar to how BEA powered an entire class of web apps. We are excited to partner with the MindsDB team and investors and look forward to their journey from inception to an iconic company.
Since the turn of the millennium, the tech industry has navigated a few downturns – the post-2000 Internet bust, the 2008 financial crisis – including today’s challenging times of a market slowdown and a banking crisis. Through it all, our team has been powered by two beliefs: that great companies are created in tough times and that great venture capital firms are guided by a set of values and operating principles that are independent of market conditions.
Setbacks and adversity are unavoidable during the company building journey. It’s also natural for your confidence to waver after a series of tough outs. But you need to stay centered and relentlessly look for silver linings. Not just for yourself, but for your team.
“Early startups are founded on energy, meaning there’s going to be a lot of downs, a lot of bad news, and a lot of rough spots. If as a leader, you’re not bringing a mindset of abundance, you’re not getting everybody up, you’re not making everyone believe, you’re not re-centering everyone on the vision, the startup fails and it falls apart. As a founder you have to make people believe in something that doesn’t exist and yet it could change the world.”
MANNY MEDINA Co-founder and CEO, Outreach
Your team is here because you sold them on the vision. But while your people can be as scrappy and as gritty and as tough as they come, there are going to be days where it’ll be hard for them to see the forest for the trees.
In moments of apprehension, your team will naturally look to you to light the way and remind them of the big picture. For that reason you must project optimism and clarity of purpose, especially when there’s turbulence ahead.
“Building a company is really hard,” says Rajeev Batra. “You’re fooling yourself if you think otherwise. But if you have to commiserate, do it with your mentors, or your peers. Because in the trenches, with your team, you need to be steadfast. If the sky is falling but you keep your cool, people pick up on that, and it’ll help them to power through.”
I am excited to share Windfall Bio, emerging from stealth today.
Windfall converts methane emissions from dairy, agriculture, oil and gas into high grade organic fertilizer. Mayfield incubated and led the inception round of $9M in late 2022. The following are some takeaways from Windfall that can be applied by entrepreneurs fighting climate change.
Solving methane buys decades for us to win the climate war
I hadn’t really heard about methane until last year. And certainly not as the molecule with a gun to the planet’s head. Yet I began to learn that around the world, 24 hours a day, a gas known as methane is belched, farted, released and seeped from livestock, chickens, gas generators and pipelines into the sky, where it spends about 20 years trapping 85 times more heat than CO2. These methane emissions are the unknown front line super-villains of climate change. According to a study published in the journal “Environmental Research Letters” in 2021, reducing methane emissions by 45% by 2030 could help to avoid about .5C degree of global warming by 2045 – a significant slowing of the temperature rise, buying humanity decades to win the war on climate change. Well, let’s go after methane then.
Of course, there is a catch. Most methane emissions are 100ppm (parts-per-million)-1000ppm at the source of emission. For contrast, the critical point of runaway global warming is 400ppm of CO2 in our ambient atmosphere. So this methane is incredibly dilute. Because of this, dilute emissions are nearly impossible to capture and cannot be burned off. Trying to use it for fuel is inefficient since concentrating it is far more expensive than using natural gas – which is a whopping 900,000ppm. People have so far focused mitigation efforts on limiting natural gas use and stopping cows from belching methane. Neither work because society wants and needs milk, meat and heat. So the world’s worst greenhouse gas goes up, up and up while we all run out of time.
Josh Silverman, serial entrepreneur, founder of Calysta, and the world’s leading methane-eating-microbe (methanotroph) scientist had the insight that evolution created a perfect solution for capturing this dilute methane. Methanotrophs, his life’s work. Methanotrophs emerged early in the planet’s evolution as simple bacteria that ate the most abundant energy source, the methane seeping from the oxygen-poor vents and rocks. As methane levels fell, they evolved to capture whatever was available. Today, they efficiently catch stray methane and use its energy to grow – exactly how plants and trees got really good at using dilute CO2 to grow over thousands of years. Together, they form the backbone of our ability to control greenhouse gas sequestration. So back to dilute methane. How can these tiny methane eating bacteria help us?
By literally eating dilute methane emissions at their source. Up to half of methane emissions are dilute forms emitted from agriculture, oil and gas operations. Dairy herds, swine manure piles, cattle, chicken coops – they all produce enormous amounts of dilute methane. Methanotrophs, Josh reasoned, can be harnessed to capture this methane and use it as food to grow, making them our best front line soldiers in the war on climate change.
His proposal was to pipe the dilute methane from the dairy barns and sheds into simple containers and compost that housed the methanotrophs in conditions similar to their natural environment. There, they feed on the methane and pull nitrogen gas from the air to make their amino acids. This process creates a high quality biomass that plants naturally use for nutrients, creating a win-win situation. Methane from dairy herds are destroyed while creating organic food for plants. The wedge market is dairy since they have no methane solutions and the milk they produce can become more climate friendly.
His proposal was to pipe the dilute methane from the dairy barns and sheds into steel containers that housed the methanotrophs.
Make a better fertilizer not a new product
Last summer, on a misty, cold and drizzling day I was walking to the newest volcano eruption in Iceland. It had erupted just a couple days prior, and only a couple thousand people had trudged their way across the virgin Icelandic landscape for almost 10 miles, across untouched lava fields covered with inches-deep fields of moss. I kept my head down during most of the hike to avoid the rain and wind stinging my face, giving me plenty of time to study the narrow path getting trampled through the moss.
It struck me then. The underlying igneous volcanic rock was being pulverized into a mixture with the moss being ground together underfoot, speeding hundreds of years of rock weathering into an afternoon. I was watching volcanic rock become dirt mixed with ground up moss, the nitrogen, phosphate and potassium, amino acids and fats serving as a nutrient-rich base mixed for the volcanic particles. This, I realized, is fertile soil. Primordial soil, the way soil evolved on our planet. And from this new fertility, seeds can gather needed nutrition and become towering plants and trees. And it all started with microbes, lichens, algae and mosses growing on the cooling surface of Earth.
Methanotrophs, Josh realized, can do the same job as the moss. By using methane as the carbon and energy source, Josh’s proposal of growing methanotrophs in dirt would create high quality organic fertilizer while eliminating the methane from our atmosphere. It happens like this. As the methanotrophs eat the methane, they double, and double and double. Every time they double they are pulling nitrogen from the air, and tearing it apart to make amino acids. These nitrogen-rich amino acids enrich the dirt and become readily available as food for plants.
The resulting fertilizer is different from the synthetic pure ammonia used today. It is organic biomass and so resembles pre-industrial age soils, which are healthier and more fertile than those of today.
Farmers buy fertilizer, so the best product to sell them is a better fertilizer, rather than something they are not used to buying. Farming is a very low margin, difficult business so farmers want to minimize risk. By offering them a replacement product rather than a new one, Windfall will shorten the sales cycle, and provide a faster go to market strategy.By offering them a replacement product rather than a new one will shorten the sales cycle, and provide a faster go to market strategy.
Great people want to work with other great people
I got to know Josh through my friend Tom Baruch, legendary climate investor and senior advisor to Breakthrough Energy Ventures. He introduced us knowing Josh wanted a partner to work through commercializing his methanotroph idea. I was game.
The first step was really understanding the problem and its extent. The second was examining the proposed solution and the bench scale prototypes that gave us confidence in the technology. Together we worked on the business assumptions, and the go-to-market strategy. What emerged was a simple pitch deck, compelling enough to get good people excited. We funded Josh to build Windfall in October 2022. Things went fast after that.
Recruiting the best team to execute the vision was next. The steps to build the team were in two parts: first, identify the core skill sets needed for the seed milestones, then find the best people with those skills.
Jordan Smith, an engineer with decades of experience designing anaerobic digesters (bioreactors for organic waste eating methanotrophs), signed on first. Carla and Judy, both previously senior scientists at Calysta, have spent their careers becoming methanotroph whisperers. The yin to Josh’s yang arrived in Frank Crespo, former Chief Procurement Officer at Caterpillar and former Chief Supply Chain Officer at IndigoAg as Windfall’s COO to make sure the operational plans were focused and realistic. Steve Chu, former secretary of energy and Nobel laureate, joined the advisory board along with top USDA/EPA regulatory expert Daniella Taveau. Louis Stenmark, their marketing associate, is also an Olympian track athlete, competing for Australia in the 2024 Olympics. Tom Baruch joined the board. As the team came together, the agricultural industry started hearing about Windfall. Cavallo, the VC arm of Wilbur Ellis (largest agronomy company in the country) invested. TetraLaval, the world’s manufacturer of milk cartons and dairy equipment, invested. SOSV/HAX invested to enable mass manufacturing of the sensor enabled steel boxes. The company, advisors and investors are aligned and committed.
The best sustainability company is the best product company
Josh worked out a critical insight early on. Synthetic biology fails when you try to use high tech to build a low tech product. His answer to make a better fertilizer was less technology, not more. Scaling up synbio companies requires a cathedral of steel and pipes hooked up to cauldrons of bubbling bioreactors, engineered to get organisms to make something they normally don’t. In contrast, for Windfall he designed a box filled with dirt and bacteria, and that’s about it. This creates high gross margins since there are few costs. With the price of dirt being cheap and organic fertilizer being around $900/ton, there is a lot of room to build a profitable business.
The farmer wins. They get methane free milk. See, they want to sell their products to consumers who have woken up to the carbon footprint of dairy. Dairy is under attack, from almond milk, oat milk, and more. A carbon friendly seal of approval on cheese and milk products will help win those consumers back. The farmer wins again with access to a more natural, lower cost, live organic fertilizer. And the planet wins. It gets primordial soils back, land that is more harmonious with nature and a reduction of methane, cooling our planet and buying us time to win.
The long term vision of success is a decentralized manufacturing network of live fertilizers across the country which creates a resilient food supply chain, impervious to regional or global disruption. Which is important because when food does not cross borders, armies will.
The idea that capitalism is required to fight climate change may seem odd. Or even inflammatory. But customers will buy products based on self interest. So the best sustainability companies are also the best product companies. Which is why Windfall is focused on innovating and delivering better fertilizer for farmers.
As a founder, you are your product’s chief advocate, but the natural consequence of this relationship is confirmation bias. This in turn makes it difficult to get an objective sense for where your product really stands. In this situation, one of the best things you can do is pressure test your offering with prospective customers.
“I started asking folks if they would pay $25K for it and most said ‘no.’ I kept asking until someone said ‘yes.’ Once the first customer said ‘yes,’ that’s when I knew we were ready to raise money.”
CHRISTINA ROSS Co-founder and CEO, Cube
If you’ve identified your target customer, it is never too early to start talking to them. Initiating dialogue sooner rather than later builds deeper relationships, which in turn create more valuable conversations.
Ask candidly about the strengths and weaknesses of your product, and use that information to refine it. Compliments are nice, but they’re also free, so don’t be afraid to push customers and dig a little deeper on where things need work. When they’re ready to reach for their wallets, you’ll know you have something genuinely cohesive and compelling.
“Customer feedback fills in your blind spots,” says Rajeev Batra, who led Mayfield’s investment in Cube. “You know all your product’s highlights because you wrote the pitch, but it’s much harder to look at something you’ve worked hard on and point out its weak spots. You need honest user feedback for that, so start the conversation early, and build from there.”