Cody Simms is with me today. Cody is a partner with MCJ Collective, a climate tech venture fund and community. Cody is well-known and well loved in the LA tech community. He was the very first Techstars managing director in LA when he set up the Techstars Disney accelerator, he then became an investing partner at Techstars’s institutional fund, and he was the head of climate and sustainability at Techstars before joining MCJ.
So MCJ Collective has been around for about three years, but the first two or so years of that was my partner Jason's podcast. So my partner Jason Jacobs is a successful entrepreneur. he built a mobile fitness app over the last decade called Runkeeper.
And then after he exited it he was trying to figure out how he could make his next chapter about purpose was really intrigued by notion of exploring climate change, but didn't know how someone with a background like his could help.
And so he started a podcast to interview folks a lot of experience in client. And today it's done close to 250 episodes and it's just become quite an influential podcast
Wait. So let me jump in and just put in a plug for listening to the. Cody interviews, Jason cause it's great. And he tells about his entrepreneurial experience starting Runkeeper
Yes so it started as this podcast called my climate journey. And then enough people said, Knocking on his door and including methat he ended up starting a slack community which is now the MCJ collective member community.
So member community took off. I became a member in there pretty early on in my own journey.
And then about a year ago launched the MCJ collective venture fund,
And how many investments have you guys made?
We've made over 50 in the first, roughly year, plus that we've been around.
I wrote that down in my notes. But then I wasn't sure whether it was 50 or 15 and I
you really make 50 in a year?
We have. Yeah. So, we're making currently about 10 to 12 investments per quarter. Um, And the funds have been live now we're on our sixth quarter, so we built the MCJ collective investment platform on the Angeles rolling fund platform. and it worked and the amount of funds we've been able to raise.
Has continued to grow quarter over quarter. Um, You know, with the Angeles platform, every quarter is a new fund and as a new clothes. And so you can bring new LPs in every quarter. You don't have to wait two and a half or three years for your next. And so that's us like we're trying to invest alongside , folks who are really deep in the climate space and what MCJ collective does is we have this network and this community and this podcast platform and the ability to really help create connectivity for the founders in this space, So many questions. The first is just on the rolling fund,
What has surprised you about the rolling fund?
What surprised me about it? I think honestly, you know, having worked at a traditional venture funds set up at Techstars the biggest thing that surprised me is how easy it is, you know, it's a 5 0 6 C. So we can talk about anything we want to talk about. We can talk about the fact we're fundraising.
We can talk about the fact that, we have these investments happening this quarter or whatever, a public platform. And so just the amount of handcuffs you often have when running venture fund are for the most part. Not there. Hmm.And tell me a little bit more about the focus I mean, correct me if I'm wrong, but like a decade ago we all talked about clean tech and now we all talk about climate tech.
Yeah, um, you know, I, think the realization is that while energy is a huge part of. You know, the emissions mix and what's causing the warming of our planet. idea of investing in climate change technologies is broader than just energy.
So this whole clean tech movement in the late two thousands, it was all really about energy. And what I think has happened with climate tech is this idea or this notion that energy is critically important and there's a lot that needs to happen. The foundational infrastructure for the renewable energy ecosystem is there now, like wind and solar are pretty much exists.
And you know, now there needs to be a lot of innovation in how it gets deployed and scaled, but beyond energy there's a significant emissions footprint to food and ag. There's a significant emissions footprint. So manufacturing, there's a significant emissions footprint, obviously to transportation and mobility.
And then beyond that there's even significant implications around Finances, how things get funded, where money flows, how your bank account works and what it invests into
And so that's where I think , it's broader than clean tech though. Inclusive of, energy related technologies.
Hm. What have been some of the areas for you as you've dug in, on tech?
you know, the thing that I think we all tend to do is get caught up in the lives we live today and sort of the world that we know. And it's really. Hard to take a step back and pull ourselves out of our own lived perspectives. And I think the thing that, I try to remind myself is the world that we all know around us is not the way earth has been for pretty much ever, right.
Like the last 100 years. Is so different than anything else the earth has ever seen. You know, human population in my own lifetime has doubled
it's tripled right in the last 80 years or so. , it's really, truly on an exponential curve. If you zoom back from earlier than like 1850, I mean, it's like straight up hockey stick.
, you think about transportation, right? A hundred years ago, people were riding horses, Hey, there were a lot less people and B, they were riding horses. They weren't traveling in planes or automobiles or motorcycles. None of that existed. Plastics, plastics, pretty much.
It didn't come around until the 1950s. Right? Like plastic production was basically a zero until the 1950s. And then it's just one Greek straight up.
What can we just talk about plastics? Like,
Are we just going to regret that? Are we going to be, it's like smoking and we are doing in dark rooms only, or whatever.
, I think single use plastics will become like smoking you know, soon enough. , and that's sort of the point I was making was all this stuff that we've taken for granted is all like one or two generations old. That's it? Like, all this stuff is brand new to the earth and human life expectancy has doubled in the last hundred years.
People in extreme poverty has actually dropped in the last two decades.
But what it's done to the rest of the planet is basically if you were an entrepreneur and you opened the financial model of. earth You would say this doesn't work. I'm not going to invest in this thing because we are basically living off of venture capital dollars and haven't figured out how to sustain ourselves.
Right? Like we have funded ourselves with fossil fuel growth to the detriment of everything else. And you know, you look at what's happened around the world, 96%. I think it is. Mammals by bio-mass today are humans and livestock. 96%, 4% of mass is wild animals. Crazy. Like what we've done to support humanity in the last a hundred years.
Right. Wait, what? Present is human versus livestock. Just out of
I don't know. I don't know the answer to that. I should know the answer to that. But you look some of statistics , when you were able to zoom out and compare like where we are today versus where we were. And so my, like what gets me excited about this whole movement as a result of that is we are living in a world where we've basically built like the human.
Prosperity model 1.0, and we've kind of gotten ourselves to a certain point and we, tapped out, we have hit a point where we can't keep going the way we've been doing it. And now it is up to entrepreneurs to figure out what does 2.0 look like? How do we redefine energy?
How do we redefine food and ag, how do we redefine manufacturing? Because all of it's going to shift over the next. One to two decades,
it actually has to.
And so it just creates such an interesting opportunity from an innovation perspective to think about like, how do we rewire the global economy?
Hmm. I mean, can we talk about some of the rewiring of the global economy?
some of those things, like,
how does energy change? You know, what is a green grid look like? What does electrifying everything look like?
Yeah. So, you know, on the energy side, obviously we're at the point now where. Renewables are cost competitive with traditional forms of traditional traditional in the last 50 years, right? Traditional for most of human existence was burning wood. But you know, in the last, 50, 60 years oil only became a thing after.
Right. So again, like moving out of what we expect to be normal. But if you take the last two generations of human existence as traditional , we're at a world now where renewables are cost competitive. The challenge with renewables is storage, right? They're intermittent you know, either the sun is up or not, or the wind is blowing or it's not.
And so big investments that need to be made in the energy sector right now or around. Storage both short-term duration in terms of batteries and then long-term duration in terms of, , ideas like, you know, using gravity to manage energy or the like, And then I think from a grid perspective it's about how do we move utilities from building monolithic power plants to enabling decentralized production and distributed energy resources that could be the solar panel on the top of your house, or it could be a community solar farm or a community wind farm.
And then, you know, your car parked in your, driveway or your garage, which has a battery actually. It's storing energy, which the grid could eventually take when it needs to in the middle of the night, when you're not driving it. So the notion of sort of load management load balancing all this stuff that in the software world, we've learned how to do with cloud computing needs to be applied to the energy sector.
So that's energy
let's pick on some you know, transportation of food and ag.
So with food and ag, I mean, I already shared some of the crazy stats about, the amount of land that is used for mammals , and livestock and whatnot. crop production has increased 300% since 1970 300% globally. Half of that has come at the expense of forests.
Right. Which is not good. And so figuring out how we more sustainably use the land we have. The biggest culprit of that is beef. Um, In terms of both land use, water use, and cows produce a lot of methane themselves. So I think the challenge we have there is as the rest of the world continues developing which is inevitable.
Like we can't just ask the rest of the world. like pause where they are, like people are going to want to catch up to the prosperity that we get to enjoy in the United States. As an example diets tend to move toward meat, eating diets. And so you know, that makes the. Unfortunately, even more challenging, And so with food , the innovations that we're going to need to see one are, how do we obviously start to look at other forms of protein cultivation that aren't necessarily requiring huge amounts of land use?
Some of that could be lab grown meat. Some of that could obviously we're already seeing a boom in plant-based foods. But beyond that, it's also looking at supply chains and food and the amount of food that's wasted going from point a to point B At the grow sites at the shipping site.
And then at the destination, whether it's a grocery store or a restaurant. And so, you don't have to have a PhD in. , atmospheric science to be good at that. And so, you know, I think we're going to continue to see a ton of innovation in supply chains, around food how it's kept from spoiling um, et cetera.
In addition to, again, trying to reduce the amount of land use for beef production, mostly.
Well let's stay on supply chains, logistics and maybe broaden it to talk about how transportation more generally is being transformed
Yeah, well, you know, I mean, obviously moving to an electrification of everything from a transport perspective, that's obvious. But we're seeing it, not just in cars. We're seeing it in. Ocean going freighter vessels
That are using distributed charging mechanisms to help them make long haul ocean routes.
Distributed charging. Like I thought you were going to say like solar panels or something. Wait, do they charge in the ocean?
Yeah, like, like battery stations that are set up around the ocean. Yeah.
not know like sort of my, Tesla charging thing, but out
I mean, but that's also, presumably the solution for long haul trucking in the long run is, you know, batteries that can load on and off the truck as it moves across the country.
So I think, you know, every one of those types of innovations require. New infrastructure to be built requires, , not just new hardware infrastructure, but new software management tools and all of that. And so you know, that's an example, , we're seeing depending on your climate, things like e-bikes becoming fairly mainstreamyou know, again, depending on your climate we'll take a substantial amount of emissions off the road.
And so, I see that as being an important change and then, you know, , so much of it, isn't tech though. So much of it is still infrastructure like investing in public transport and the like in major cities,
Yeah. And so there's electrifying everything in transportation. How about just electrifying beyond transportation?
Well, the built environment is a huge one, right? , like for example, in my own home, which again, the residential footprint is smaller than the commercial one. But in the last year, I've swapped out my gas, HVAC, and my gas water heater for an electric heat pump, HVAC and an electric heat pump, water heater.
And I do have solar on my roof. And so, , now the main. Consumers of gas in my home have been replaced with electric utilities. And again, I've got solar panels on my roof as well. So I'm actually producing most of the energy that my home appliances, are consuming
our gas appliance is much worse than So the thing with gossip plans is they're certainly better than other forms of appliances. Like you know, a lot of things in the east coast, the us are, using actual, like heating oil as an example. The challenge with gas was a very clever branding person who branded it natural gas.
Natural gas is just methane it's methane. Right? And so the challenge with methane is that it is between eight to 10 times more heat trapping than carbon dioxide. Excuse me. it's 300 times more He trapping the carbon dioxide.
The benefit of it is that it only stays that way for about eight to 10 years. so methane, when it gets leaked or released to the atmosphere, creates a significant amount of heat trapping issues. And so the problem we have is when you have. Natural gas or carbon gasses.
People like to call it appliances in your house. You know, you're continuing to support the exploration and development of more gas plants that then tend to leak methane. And is it the gas plants leak methane.Yeah, I mean, any pipeline, you know, nothing's uh, odorless, colorless gas, and so there's been pretty significant research on the amount of leakage that is happening in pipelines across the U S that. Fairly significant vector of emissions. The challenge is it depends on the local jurisdiction as to. What the penalty is for a leaking pipeline. And in some cases it's just cheaper to pay a fine , how much do you look internationally? And just different countries have very different attitudes and they might not just slap a fine on you. What can the us learn?
yeah, sure. I mean, you S can learn a ton. Um,
Um, Certainly countries in Europe are further along in this area. You know, they've got legislation where they, they actually have the price of carbon they've got uh, mandatory carbon markets and whatnot. And so I think, from a, us perspective , , most of the progress we've seen has been local um, in terms of legislation , you've seen a lot of progress happening in places like California or New York or Vermont and the.
Federal legislation has just been, as it is with most things in the United States, unfortunately just completely deadlocked in terms of actually pushing incentives for utility companies to switch over to less fossil fuel intensive infrastructure in terms of creating incentives for consumers to switch to appliances that are more, less.
that stuff tends to be kind of deadlocked right now.
Yeah, we should all vote
Well better. And then also, you know, one thing that I did about a year and a half ago was through the MCJ communityI met a few folks who were really concerned about. Politics and climate the MCJ slack, and we co-founded a political action group called climate change makers.
And the whole idea of climate change makers is can you turn taking political action around climate into a once a week habit? And so what we do is we set up Actions that the climate change makers community then zooms in, on either Wednesdays or Thursdays for an hour takes those actions together.
And so, you know, one week we may be calling our members of Congress and asking them to support a certain piece of legislation, or one week we may. Be helping all the community members draft letters to the editor, for them to write to their local newspaper. And so. do think voting is clearly important, but I think one thing everyone can do is be more active from a civic perspective.
Yeah, I'm always amazed at how much Congress people actually care about hearing from their constituents.
For sure. Yeah. I mean, so I think many of them care more about hearing from their donors. But you know, second to that is hearing from their constituents One more on this. about China? I know you have lot of background and depth with China.
is going on with , China, and the climate
Sure., I have a weird background with China and that I studied Chinese in college, like 20 plus years ago and lived there then, and then didn't revisit it until maybe three years ago. When I, when I spent some time over there quite a bit of time over there with Techstars with China I mean, China today.
Emits more on an annual basis than all other developed nations combined
it's yeah, it's close to 30% of global emissions are all from China. And now the U S by far is the, leader in cumulative emissions over the history of ever. But China is the number one emitter today.
It makes sense. There's I don't know what 1.2 billion people who live there or whatever. And so, you know, that's, again, The cautionary tale of where the world is headed. If we don't develop new technologies and deploy the technologies we do have today. As the rest of the world continues to develop places like India, places like Indonesia, places like Pakistan that have large populations, if we don't actually help develop and enable the scaled rollout of modern.
Renewable energy, modern transportation, et cetera. You know, what we've seen happen in China over the last two decades will surely happen in many other countries, which is only going to accelerate, the volume of emissions that we, have today. And so with China in particular yes, they are the number one.
You know, by a large margin. They're also the largest renewable energy producer by a large margin. And so it China's just big. And so, you know, I they did pass a state run carbon market into China last year. So they're taking steps obviously to change the trajectory.
But you know, like with anywhere else, you have to make trade-offs between local progress and quality of life and longterm outcomes.
do you think a little a field from climate, but what do you think about sort of U S China relations right now in tech bifurcation tech crackdown in China?
Well, I mean, general, I mean, China has, is basically a separate internet and has been you know, there's a, there's a service. I mean, first of all, the language barrier. Significantly different. And you know, there is basically a leading service in China for just about every service that used in the U S that is a Chinese version of that service.
And then I think . The battles that you're starting to see, , happen in tech. are actually playing out less in China and less than the United States and more in parts of Southeast Asia, parts of Africa, where it's really a question of what infrastructure stack are developing economies going to build on,
you know, for the last.
15 or 20 years it was, you know, are you going to build on Microsoft or Google? , now it's, are you going to build on Alibaba or Amazon? As an example.
and you know, obviously there are huge incentives for these mega companies in China to get. Global distribution of their services.
And so, you know, that's how things are really playing out. There, even if we don't see that playing out in United States at all is going to be interesting to see happen. It's, it's almost like a digital cold war to some extent Uh, scary stuff. I think i hear people say that world war three happens when china invades taiwan and all global chip production stops
I mean, you know, certainly a huge percentage of chip manufacturing happens in Taiwan. And obviously there are incredible tensions between Taiwan and China.
So that's not a farfetched
Okay. Let's get lighter notes.
I really wanted to ask you a bit about advice for startups and a little bit more about your career. I have not read your book.
Sure. No problem.
but I really want to know your advice. You were at Techstars for eight years. You wrote a book full of startup advice
Sure. Yeah. So I, , co-wrote a book with a couple of other current and former Techstars colleagues it's called levers the framework for building repeatability in your business and the book itself is actually a set of workshops. So it's, it's a book. You do not a book you read,
And. A set of workshops that are quite battle-tested with hundreds and hundreds of startups, having gone through them over the last decade or so.
You know, my big push for founders is to really, really have a good grasp on what your key assumptions are about your business. And so the main chapter I wrote in the book is a workshop I'd given. I don't probably 200 times probably more than that. Called assumptions, hypotheses and roadmaps.
And it's all about helping you figure out what are the highest priority. Unknown. The assumptions in your business and what are the highest priority validated assumptions in your business and how do you build a plan accordingly? And it's a really simple framework you can use. have companies who use it as often as once a month, just to run a problem through this little framework to figure out what they know and what they don't know and what they want to do about it.
And, my general feeling is when I talked to a startup as an investor. It's always really important for me to, to know that the founder has a grasp on those things.
Here are the things we've tested and we've learned, and we feel pretty good about them. Here are the things we don't know yet. And of the things you don't know yet, these two are really important and here's how we're approaching, trying to learn about these things.
Before moving into the investment world with Techstars, 2013. So almost a decade ago worked for almost 15 years in consumer internet product roles and the big thing I learned in my time building product and operating was boy, I published lots of roadmaps that were crap.
I published lots of roadmaps that honestly were probably more. Does the page look balanced in terms of how many features are in how many boxes in which quarters so that it looks good on slide
versus are these actually the things we should even be thinking about because. You know, most product managers know this, but whatever you're putting into a roadmap, four quarters from now is kind of BS anyway.
And so a big thing I pushed founders for is less around. What features are you building in wind and more around? What are you trying to learn about? So, you know, I call it a learning roadmap. And what are the, key things that you want to learn by what date? So that you can then decide what features do.
So what actually happens in the workshops do startups come to the workshop they thinking they know all their assumptions does it change
I think two things happen. One is A lot of founders, honestly, don't take the time to fully think about it. At first they may have one or two like big unknowns, but they haven't really thought about in what order they should try to tackle those. And the other thing that comes up is I always ask teams to do it together as a team.
So like all the founders do the exercise together and way the, workshop works is. I start the process off with about 10 minutes of just pre-writing, where you're writing down. Like, what are the things you believe drive your business. So everyone's just writing out these belief statements.
So the way students all over the place, and there are different levels of granularity and, and whatnot. So everyone gets all their ideas on the table. And what you also see is a lot of things that. Two chess moves away
and to be on the table, like we believe, because we're able to attract this customer at, and who's going to buy our product.
Like this will eventually be able to unlock these markets with the data we're able to
Exactly, Exactly, And so then when you lay them out on the table, you see pretty clearly like, okay, and do you have data to back this up? No, we don't know yet. We don't have data on that.
B is this critical to your business right now? Like your business is going to stop working. If this doesn't work? No, not really. Okay. So that's not a high priority assumption and it's unvalidated. And in my book, anything, that's, a low priority unvalidated assumption. Isn't something you should be spending time on right now,
And so, you know, that's an item that you can move. To the back of your mind now for a lot of founders, like being able to have that clarity of like the, three moves out, chess, move, being so important. It actually doesn't really matter today because it's not going to make or break what you're doing right now.
It's very clarifying
Yeah, Yeah. So you had this career as a PM and then in tech stars. So you, did a lot of slides where you balance the number of bullet points, but you were a successful PM. Like, what do you think Cody about yourself? What are your qualities that make you a successful.
first of all, being a PM when I was a PM is so different than being a PM today in that career path of a product manager didn't exist when I started, I think the, thing. At least when I was doing it, that mattered were being curious about the motivations of your customers.
, why our customers doing this thing or what is it that they're trying to solve? And, and trying to actually think about The underlying sort of psyche of who the person is and what they're trying to do, , taking it into a nonprofit context, taking it into a sales context. My coauthor Amos Schwartz, Barb, who's the managing director of Techstars Austin his big workshop is helping you understand who your customer is. And what are they buying from you? Not what are you selling to them, but what are they buying from you and why? The other one is as a PM, you've got to be good at being able to communicate the vision and getting, , other people around the org to understand the why so that you don't have to come up with every feature.
Cause that's never going to work, but if you're good at communicating the why it inspires other people to come up with features that need to be developed A hundred percent. I wish I had understood that concept better that I didn't have to figure out all the features when I was starting in product. Anyhow, you, you moved from product to Techstars Disney. To a strategic role running strategy for tech stars for the Americas. What is Techstars strategy and how does it fit in with the rest of the venture? Ecosystem
Sure. I mean, I'm not there anymore, so I don't want to speak to the current strategy, but. you know, Techstars absolutely is trying to be the, biggest global investor in the world in startups, And from a financial returns perspective, it's uh, basically a model of diversification.
It's a story that, diversified investment practices outperform over the long term. Do you think that accelerates or lends itself to a first-time entrepreneur, more than someone who accelerate and goes straight to their whatever, $10 million seed round.
Uh, I think it depends on what network you need. If you are. An experienced entrepreneur, but you're waiting into a new industry or new vertical, a new sector.
You're in a new geo you know, you need ways to short circuit building your network in whatever way you need.
And, Techstars has always made that more of the emphasis that. You know, let's go out and help you raise $15 million within the next two months. You know, ridiculous valuation, which for some founders, that's what they prioritize.
But I think Techstars is really more focused on how do we help you build the tools you need for the long-term success of your business and for you as an entrepreneur?
Okay. Cody, I need to be respectful of time. So we, when we just get a little bit about you, like,
Where did you grow up? What are the big lessons from your youth that you took?
I was born in Texas, but I grew up in Kansas , you know, I spent my childhood there and went to university in Kansas. And you know, I think what growing up in the Midwest did for me was it instilled me with curiosity about what in the world was going on in the rest of the world.
You know, as I said at the beginning, like I ended up studying Chinese in college. I lived in China a few times. When I graduated college in the late nineties, I moved to San Francisco, ended up falling into the.com boom by accident. And you know, just. I think I've always been a curious person.
And , I don't know if that's because I grew up in Kansas and uh, you know, just was curious about what else was happening. But certainly that's been, core to my background.
Okay. Anything else we really need to cover? We covered so much. I think it was really good.
Yeah, I mean, I would just say, , I learned from Techstars that. I don't know that I would be personally fulfilled if I was just investing, like, I like that there's sort of a platform aspect to what we're building at MCJ that the investment side of what we do benefits from the community the media side of what we do,
And so, you know, they really do build off of each other and That to me is exciting because I think the entire world of investment is changing right now is, you know, capital is more and more of a commodity. And , every fund, , really does need to take. A unique approach to how they support their portfolio, how they support innovators broadly and how they help raise awareness for the thesis that they have in the problems that they're trying to solve in the world.
well, it sounds like there's a lot of great ways to plug in with what you're doing
And you know, I'm sure we're all wishing you massive success in this endeavor. And hopefully can be a part of it in some small ways. So thank you Cody for coming on the pod.
Super well, thanks. Many. This has been a lot of fun.