Episode 145

S11E145 Mattias Karls/Direct Carbon - The Importance of Carbon Capture Solutions

In this episode, I speak with Mattias Karls, a seasoned entrepreneur hailing from Stockholm, Sweden. Mattias shares his journey from the heartland of Sweden to becoming a serial entrepreneur, starting right after his university days during the IT boom of the late '90s. We dive into his experiences with his first company, which grew rapidly and hooked him on the thrill of entrepreneurship. Mattias also opens up about his time at Disruptive Materials, where he helped launch a groundbreaking new material, and how his career took a turn after a personal health challenge. His story is one of resilience and passion for innovation, and it's fascinating to hear how these experiences have shaped his approach to leadership and business.

We also explore Mattias's current venture, Direct Carbon, and the exciting potential it holds in the indoor farming and air quality sectors. Mattias talks about the company's origins, the innovative technology they're developing, and the unique challenges and opportunities in the vertical farming industry. He shares insights into the decision-making process behind joining Direct Carbon and the strategic moves they're making to expand their impact. Whether you're interested in entrepreneurship, cutting-edge technology, or sustainable solutions, Mattias's journey offers valuable lessons and inspiration.

Join us as we uncover the story behind Direct Carbon and the future of indoor farming.

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Bio520

Key Takeaways

02:05 Journey of a Serial Entrepreneur

8:26 The Disruptive Materials Journey

12:10 The Origin Story of Direct Carbon

18:09 The Potential of Direct Air Capture and Indoor Farming

22:54 Greentech Conference Experience

26:44 Direct Carbon Capture for Small Farms

29:25 Plug and Play Farm Technology

38:08 Challenges in the Indoor Farming Industry

39:42 Transitioning to New Technologies

Tweetable Quotes

"I think when you get more experienced, you have the confidence to actually make decisions, even if you don't have all the information. Early in your career, you gather input endlessly, thinking it will make the decision easier, but it often doesn't."
"We launched our first unit at Greentech, and having the machine running in the booth drew a lot of attention. It was a smart move because it allowed us to show how it worked, which was crucial for engaging potential clients."
"Balancing spending and progress is always a struggle in a startup. You want to invest in everything—fairs, customer visits, better processes—but you have to decide if it's the right time or if you should achieve certain milestones first."

Resources Mentioned

Website - www.direct-carbon.com

LinkedIn - https://www.linkedin.com/in/mattiaskarls/

Connect With Us

VFP - LinkedIn - https://www.linkedin.com/company/verticalfarmingpodcast

VFP Twitter - https://twitter.com/VerticalFarmPod

VFP Instagram - https://www.instagram.com/direct/inbox/

VFP Facebook - https://www.facebook.com/VerticalFarmPod

Vertical Farming Jobs - http://verticalfarmingjobs.com

Vertical Farming Weekly - www.getrevue.co/profile/verticalfarmingpodcast

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Mentioned in this episode:

Indoor AgCon 2025

Indoor AgCon 2025

CEA Summit East 2024

CEA Summit East 2024

Transcript

Harry Duran

0:00 - 0:10

So it's always helpful for the context, for the listener and the viewer to understand where my guests are coming from. We've had guests from all around the world. So where's home for you right now?

Mattias Karls

0:10 - 0:16

Yes, home right now is Stockholm, Sweden. So I'm in Sweden right now.

Harry Duran

0:16 - 0:18

And were you born and raised there?

Mattias Karls

0:18 - 0:37

Yes, I was born and raised here. I come from the heartland of Sweden in Dolona, the middle part of Sweden. I grew up there, but then I've been living in Stockholm for 25 years, I guess. And I lived for two years in the US as well, and in Norway. And, yeah, I've been traveling around a bit.

Harry Duran

0:37 - 0:45

But for anyone who may not have been to your hometown, how would you describe it to anyone who hasn't been there before? What makes it so special?

Mattias Karls

0:46 - 1:19

I guess it's a bit of a cliche to say that your hometown is a beautiful city, but Stockholm is really beautiful, I think. I mean, we have so much water here in downtown of Stockholm, so it's really nice in terms of the weather here. I mean, in the summertime, it's great, right? So you have the sunlight and beautiful weather, and then, of course, in the middle of the winter is not as fun. So it's a little bit dark and so on. But, yeah, I like Stockholm a lot, to be honest. I've been traveling a lot, but Stockholm is super nice, I think.

Harry Duran

1:20 - 1:22

And where in the States did you spend a couple of years?

Mattias Karls

1:22 - 1:23

In Chicago.

Harry Duran

1:24 - 1:26

Okay, so you got a taste of the cold.

Mattias Karls

1:26 - 1:41

Yeah, yeah, that was a little bit sort of. The climate is pretty much the same as in Sweden, I guess, in Chicago, but it's a little bit more extreme. So you get like 100 degrees in the summer and minus fahrenheit degrees in the winter. And here it's a little bit more leveled out, I guess.

Harry Duran

1:41 - 2:01

I'm currently in Minnesota, and there's a surprisingly large population of Scandinavians in Minnesota. I'm sure maybe you've heard of that, but you get a taste, and it's probably that they can handle the weather better than most others because they're used to it. So I imagine that's what draws them.

Mattias Karls

2:01 - 2:04

Yeah, maybe that's why they ended up in Minnesota when they.

Harry Duran

2:05 - 2:20

Yeah. So what's interesting, I was looking at your LinkedIn profile, and you had your title there, entrepreneur. And one of the email conversations we had, you referred to yourself as a serial entrepreneur. When did that journey start for you?

Mattias Karls

2:20 - 3:39

It actually started right after I graduated from the university. So that was back in 99. And, I mean, times were really strange. Back then, I graduated from a master's degree in industrial engineering and management. So especially here in Stockholm, I think maybe, I mean, in the Silicon Valley area as well. But Stockholm was really hot in 99 with the IT booth boom, and I graduated. So, I mean, you can get. You can. Every company wanted to hire you, basically. I mean, it was such a big hype, but I still ended up in starting a company, so I'm really glad I did. So that was sort of an IT company. We offered, like, solutions for procurement as a software, as a service offering. So that was really cool back then to install software and offer it as a service rather than selling the, you know, cds and install the software behind the firewall. So that was my first job starting that company with some friends in Stockholm, and it went really well. So the company grew really fast. And then I was hooked, I guess, to the feeling of starting a company, being part of everything when you're setting it up, your first customers, your achievements that you do, and of course, a lot of hard work as well. But it's really rewarding, I think.

Harry Duran

3:39 - 4:29

Do you get the sense? And obviously there was a lot of a big wave. I mean, I actually left my corporate job in 99 to go work for a startup. It didn't turn out as planned, which is why I had to go, you know, crawling back to my ex boss a year later to ask him for a new job, which, thankfully, he had something open. But there was a big wave of enthusiasm around.com and a lot of tech. But obviously, in the scandinavian countries, the Ericsson's and the Nokias, there's. I sense that there's always been, like, companies to admire and look up to in terms of this startup culture or this enterprise, you know, or this entrepreneurial culture. Did you. Is that a sense? Do you get the sense that that's the same thing for you when you were in university, that there were role models and people to look up to in terms of starting your own company.

Mattias Karls

4:29 - 5:22

rom, let's say if you go back:

Harry Duran

5:22 - 6:06

So yeah, I think there was a recent post by the Paul Graham y combinator and he recently had on, I think Brian Chesky from Airbnb. And this post has been making the rounds. And Brian talks about this idea of being a CEO versus a founder. And I think some of the advice that he was given was to say that they push these founders into becoming CEO's and creating these management teams and you end up having all these managers who have no experience starting a company or founding a company. Brian was saying how disastrous it ended up and he had to go back to thinking like a founder and having that direct connection with his employees. And I'm wondering if that resonates with you.

Mattias Karls

6:06 - 7:15

Yeah, it's an extremely interesting topic, I think, because you can always throw out some examples like with Airbnb or Google or someone like the founders, they are still running the company after so and so many years and so on. But I think normally it's, it's hard to mix, I think running a big corporation like that and also be entrepreneurial and sort of visionary as well. But of course, I mean, the big corporations, they have a big staff of team taking care of most of it around them. But I tend to sort of, when I think back in my career, I think I really enjoyed the like the first startup phase where you actually can be creative and you're forming and shaping the company and so on and then down the line. Of course that's fun from another perspective, I guess. But you end up in so much on your table all the time with processes and quality and customers and I mean agreements and someone is leaving the company, someone is to be hired and everything at the same time. So it's hard to find the time to actually work on what's really mission critical for the company, who has been.

Harry Duran

7:15 - 7:27

Important for you in terms of your development, whether it's mentors or people that you ended up working for in previous engagements that you look to or maybe think about as you start to work on your current project.

Mattias Karls

7:28 - 8:12

I think that first company I joined, that was a really good lesson for me because we had a really strong team, I think, and we hired a lot of people as well, so we grew from like four people to 300 in a couple of years. So that was, and it's quite unswedish to do it like that. It's more Silicon Valley style to hire a lot of people and build a company so fast. But I think we had a really good team from the start and also we hired a lot of good people along the journey. So that was really useful for me to be able to see all these different people coming in and the first CFO and all these different roles in HR and how you can manage that in a professional way. That formed me a lot.

Harry Duran

8:12 - 8:26

I think you spent a bit of time at your previous company, disruptive materials, and I'm curious about the type of work that you did there. I mean, just from the title of the company, it sounds like you really, you know, the founders had a mission to do something disruptive.

Mattias Karls

-:

I'm curious, very humble name, right, of the company. It was a really interesting story because I knew some people at the Uppsala University, which is one of the biggest universities here in Sweden, and the professor there, I met with her a couple of times before, and they invented a new material, a really cool material like a porous magnesium carbonate material that you can use for a lot of different applications. And they got a, I mean, when they talk to like the incubator and investors and so on, they always, everyone told them, like, bring in someone with, from more of a business background. Don't try to run this by just a group of scientists inventing the material. So I got the request if I wanted to get engaged or starting to work with the company, and I did for some time. And then we launched. So the first paper was published and it was a super big hype, so it was pretty much all over the world. So they talked about it in like Huffington Post and Washington Post and Der Spiegel and every newspaper almost wrote about this new material from Sweden and how it could change the world and so on. It was a very interesting start for a small company. And we had like, I think we had like 50 grams of this material from the lab. And we got 2000 customer requests within two months when we founded the company. So it was a really interesting journey. And I guess I was, I mean, I had a lot of good researchers around me sort of understanding the material and what you can do with it and how to manufacture it and so on. But I was basically building up the company and hiring the right people and deciding on where to focus, basically because there were so many different application areas for this material. So we really needed to focus, but it's hard to know where to focus if you don't really know those industries as well. And you can't start to hire people knowing all the industries. So that company ended up focusing on cosmetics and on drug delivery, so making cancer drugs in this case. So the company is split now into one pharmaceutical company, one cosmetic company.

Harry Duran

-:

Talk a little bit about your decision making process when it comes. And obviously, hindsight is 2020, so you can always think back what you should have done or maybe could have done better. But I'm always curious for leaders how they go about thinking through problems, not just what decisions you made, but are there any models that you like to use, or is there any frameworks that are helpful for you when you have to make such a complicated decision that could determine the future of a company?

Mattias Karls

-:

I think I thought more about sort of models when I was younger, I guess after, you know, I read a lot of management literature and stuff. And then you say that normally that if you read like a big book on a specific topic, there is like one or two takeaways from the whole book. So I think I try to make it less complex. When you get more experienced, you really just want to put down on paper, like, what do we know how to address this issue? Sort of divide it up in pieces. And so it's not so fancy, I think, more basic approach.

Harry Duran

-:

Sometimes you just use whatever information you have in front of you to make the best decision possible.

Mattias Karls

-:

Yeah. And I think when you get more experienced as well, you have the confidence to actually take the decision, even if you don't have all the information. When you're a little bit early in your career, like, how can I decide? I don't know anything or I don't know everything, and you just want more and more input, and you gather input, input, input, and then it doesn't get any easier to take the decision. Right?

Harry Duran

-:

Yeah, it's helpful to know. So if someone were to look at the life of direct carbon, it may look like it's a young company, but it's something you've been working on for some time. And I think you mentioned it was being incubated under a different name. So what is the origin story of direct carbon?

Mattias Karls

-:

Yeah, it was a company here in Sweden called Sale, named after the first female astronaut, I think. So they founded a company. It was two brothers, actually, Anders and Frederick. They founded a company, I think, back in 2017 or something like that, with one mission that was to make more energy efficient, like ventilation systems. So they thought about how do they solve the. This is by actually a quite common background to direct air capture companies, I've heard. So there are some other companies coming from the space industry as well, but they started to look at the International Space Station, like, how do you solve the oxygen and carbon dioxide and how to ventilate using little energy and trying to be as efficient as possible. So they entered the Essa space incubator, and they actually licensed some technology from NASA back then, I think. And one of these guys, Anders, is an incredible guy. He can build, I mean, pretty much everything on a complex system. Like, he can make the programming, he can make the hardware, he can, you know, all the bits and pieces. So he had built, I think, like, four different prototypes over the year for direct air capture units. And so that's. I think they had it installed in a couple of greenhouses as well. So that application was on the radar. And they also had some partnerships up and running with some ventilation companies on how to take out the CO2 from indoor air and save energy, basically. But then the company started to focus more on the algorithms that they developed to control the ventilation in the buildings. So as it is, I think that's quite common as well. Like, if you have two different sort of part of the business, and one is where the board and the management thing think that you should go, the other one is sort of lying there so that you can do some work from time to time, but it's not really taking off. That was the situation when I first came in contact with Dior carbon, that they. I was quite impressed because they had a working machine, and they've solved a lot of problems around that. Maybe it wasn't really scalable to work on that late prototype that they had, but they had all the knowledge, at least, and they had an approved patent as well on the unit. So that was the background of tyrocarbon. So it was actually a subsidiary of this company, Salura, but the subsidiary was sort of just parked, so it wasn't happening anything in that subsidiary.

Harry Duran

-:

So I'm curious, in terms of your thought process, when you think about making a decision to join a company or to decide if you want to take a leadership role, it's not an insignificant decision. Given your experiences. And obviously working at a place like disruptive, you're used to working with some maybe cutting edge technology. So what is it that you saw, or what is it that you see in terms of the potential potential for what can be built with direct carbon?

Mattias Karls

-:

Yeah. And the reason, I guess, why I was actually even looking for something else was that I had a brain tumor. So it's, yeah, so it's, it sounds harder than what it was, but I got it diagnosed and I realized that I needed to get surgery, so I had to quit direct carbon because I knew that I would be on sick leave for like a year. So I quit thyroid carbon or disruptive materials, and then I removed the tumor and everything went fine. I had no symptoms before and no after. But you get this, you get really tired after a big surgery like that. So I was pretty much doing nothing, just chilling and hanging with my family and so on for at least for nine months. And then when I should get back and do something again, I mean, it's coincidence all the time, right? So I ran into the chairman of the board for direct carbon and he introduced me to the company. And it felt so right. So be part of it from day one and not from day one, but at least building up the company from where it was back then. So that was, that's why I started to. But I got the introduction to Dior carbon.

Harry Duran

-:

Well, I'm glad to hear the recovery went well. I imagine getting a diagnosis like that, you know, it must be pretty shocking to hear when you first get it, and obviously it probably has ripple effects for you and your family and your friends. And I'm sure it was a very, very emotional time for you. So I'm glad to hear you came out on that positive end of that.

Mattias Karls

-:

Yeah. So it was tough. I mean, it's always, I guess you start to think about where you are in life and what you want to do going forward and so on, which is always good for you, I guess, to do, but of course you want to do it under other circumstances than this, but, yeah, so that's, it was so much fun because first when I got the question, like direct air capture for me, that felt like one of those big climb works or something like that, where you are building something huge and you rely on government money and subsidies and so on, was when I realized that this is actually a really interesting opportunity for a startup to be in because of the vertical farming and that space and also the indoor air quality space as well, and that we had a machine that was, I mean, so many problems were solved already, so it felt like a really good time to get in and get engaged with the company.

Harry Duran

-:

And so what was your visibility into the indoor farming space? I know you mentioned they had some engagements with greenhouses, some curious what you had known about indoor farming up until that time and how much of a crash course. It's been since then, it's been a.

Mattias Karls

-:

Hell of a crash course, I can tell you that now. I didn't know much, to be honest. I think, I mean there are some vertical farms here in Sweden for example, that I've seen. I haven't visited a farm I think before I joined, but at least we had a lot of customer discussions that was sort of omnipresent pos I guess so that was of course really important to me to get started and call those contacts and talk about, I mean what's important for you and how does it work and what are you looking for in terms of CO2 solutions for your farms and so on. And for me, I think coming from the industry of course you realize how complicated it is with all the economics around it, but also on the technical side with all the irrigation and gutters and leads and drivers and air control units and so on. But I think when we talk to the farms early on, at least for the CO2 solutions, then it's a little bit more basic I guess because they just want to have a certain ppm level in the farm and they always know sort of we want to have 1100 ppm or 1200 ppm or something like that. If you really start to ask them why is it 1100, why is it not 1200? They don't know, but someone told them or someone decided that's a good level.

Harry Duran

-:

And everyone decided that that's the number.

Mattias Karls

-:

Yeah. And I mean it's all about setting that value and for a unit that we produce to keep that Ppm level in the farm, that's the most important thing. And then of course cost, if you're talking about farms and like oh my God, this is a super clever solution to capture the carbon from the air, inject it into the greenhouse. Of course we want to go there, but then of course reality is there as well. I mean it can't be too expensive because yeah, you have the reality. You need to live on the profits you're making and of course if you spend more on expensive solutions, that's really tough on bottom line. But I think it's fairly, I mean I've been visiting a lot of farms and they are so different as well. I'm sure you have visited a lot as well. I mean some farms are really sophisticated, they're automated and everything is sort of working for real, for working. And then you are visiting other farms and it's a lot of duct tape and it's a lot of, it's like.

Harry Duran

-:

The wizard of Oz when they look behind the curtains, don't look in that room.

Mattias Karls

-:

Don't look in there.

Harry Duran

-:

Yeah, yeah. It's amazing how many different types of systems get connected together with like, you know, duct tape and like a system from the UK or european system connecting with like a us system. And obviously the pieces don't match so they have to figure out an interim connector. And getting all these things to work together, it's a miracle. Some of these, you know, keep on going the way they do.

Mattias Karls

-:

Oh, this is the metric system. Well, this is not. This is half inchdev.

Harry Duran

-:

Yeah, so that's.

Mattias Karls

-:

And I mean, the dynamics in this industry is really interesting as well. It's sort of a little bit like the IT industry is back in late nineties, I guess, where this is hype and there's a lot of technology and a lot of engineers and a lot of different ideas coming in from different directions and you don't really know what should win. And you have the big farmers or the greenhouses laughing at the vertical farming guys vice versa. And I think I like that. I wouldn't really want to work in a super sort of stable industry where, you know, where the players are and it's slow. So this is fun.

Harry Duran

-:

Yeah, it's been interesting to see the sort of like the, it feels like the parents coming into the room when the dutch folks come in and with all their greenhouse experience and be like, ah, it's so funny to see what you've been doing. And we've been doing this for decades and we've kind of figured out some of it. And so they're coming in and I probably providing some much needed guidance and best practices and what's worked. And I think now we're starting to see some mixing, some even some hybrid solutions, some applications where vertical farms are partnering with greenhouses and realizing that maybe there is a way that you can get some of the seeds started maybe in a vertical farm and maximize your space there and then eventually move into a greenhouse. But I'm curious about your experience at Greentech. You had debut there. It sounds like it went pretty well.

Mattias Karls

-:

Yeah, it went really well. I think it was a lot of fun too. We launched our first unit there and we had a booth and it was really good for us to bring the machine. So we had a machine running in the booth, which I think that a lot of attention from that aspect, I think because when you're walking around, I mean there's, I mean, it's a fairly big show, so it is a lot of booths to visit and so on. But it's. Yeah, so we had, especially in the morning, like from nine to noon, I guess, was really crowded and then it was a little bit slower in the afternoon normally, but yeah, so it was a lot of fun. And companies from pretty much all over the world. I mean, of course maybe it's european focus, but we had from, you know, from Mexico and from Thailand and from Japan and China and so that was really, really fun.

Harry Duran

-:

Was that your first indoor farming conference?

Mattias Karls

-:

No. Well, I attended a green tech show the year before just as an attendee, so walked around and met with some companies, but it's a lot of fun, I think, to just go around and look at, well, you have the big players, right? You know, the Siemens and prevans on the big booths, and then you have all these small sort of one trick pony companies as well with this gutter system. That's it. And everything in between.

Harry Duran

-:

So I keep hearing great things. I'm going to try to make it out there next year, but it's almost like a festive atmosphere. It's so big, it's so many days. It's almost like a party atmosphere. I imagine you have to be really good at marketing yourself to even get someone's attention because there's so much happening and there's so many vendors there. If you're a small company, it's probably a big investment for your marketing department. So I think the companies that succeed are probably the ones that just push the limits in terms of what they can do to get people's attention there.

Mattias Karls

-:

Yeah, as I said, I think just having the machine in the booth and run it, I think that because, I mean, there are some other companies in this doing the same as us, I guess, and they've been exhibiting like one or two years before, I guess, but they haven't really showed off their products. I think there was a, it was a smart move of us of running it in the booth and just, you can open it up and show how it was working and so on.

Harry Duran

-:

And it sounds like you'll be doing the same at Vertifarm as well.

Mattias Karls

-:

Yes. So we will go there as well. I haven't been there before. I think it's a smaller fair, I guess, but it's more niche towards vertical farming, I guess, so that should be a lot of fun. We have a lot of meetings.

Harry Duran

-:

Yeah. Last year I connected with the team and I, we spent a couple of days there, so it's. Yeah, it's a very much more intimate space and it's in Dortmund, which I'd never been to. So I got to see a local football game as well, which was very interesting. I didn't realize how many, how much they love fireworks in the stands as their team is winning and or losing. The amount of fireworks going off in the fan section was pretty crazy.

Mattias Karls

-:

It's always a problem here in Stockholm, at least when these Stockholm clubs are playing against each other. Then they light up these banks, all fires. And so the game should start at like 830 or something, but they need to ventilate, so it's half an hour late. And then everyone should get back home and find their cars. And so it's a little bit annoying.

Harry Duran

-:

So for the viewer and the listener, who are just getting acquainted with direct carbon and capture systems that are similar, who would make for an ideal client. As you think about the types of services you have and the new model that you've rolled out, when you have that conversation and people are coming to you and trying to understand if direct carbon would be a fit for them, what's that conversation like?

Mattias Karls

-:

Yeah, so the first unit we have now, that's a fairly small unit. It's a five kilogram of CO2 per day. So it's sort of catering towards more of a like container farms or in store farms or small vertical farms, which is a good start because a lot of our clients, they have like a demo sort of farm or showcase farm, or they are building maybe a smaller version of the modular system so they can show it off. And it's also a good unit for if we talk about the indoor air quality side, where it will fit under the ceiling, for example, in a conference room or a classroom, if you want to purify the air from CO2. So I'm glad we started with this smaller unit. It's pretty easy to scale it up. I mean, if you. When, now when we sold everything for this smaller box, I mean, it's basically the same larger fans, of course, and a larger rotary wheel that we're using, that's the adsorbent and so on. But it's the same physics and same control system and everything. So I think it's for. I mean, if you look at some of the clients that we already signed, I think it's in store farms. It's quite popular here in Europe, where you're actually growing leafy greens or some lettuce and stuff. Inside of bigger supermarkets, they don't want to use the compressed CO2 either because of the press vessels inside of the store. So they pretty much rely on the CO2 generated by the people shopping. And it's now not 24 hours shopping. So it fluctuates a lot of. And it's smaller farms, I think, that want to be green. I think that's the main drive will be. Sometimes we can see that we actually can. It's less cost to run our unit than to buy like liquid CO2 on tubes and tanks, if you look at the total cost of ownership for that. But I would say normally we are more on pars. You don't want to switch just to save money, I think. But of course, I think all the farmers I talk to at least, or the operators of farms, they want to be green. I mean they really less transportation, less water, you know, organic fertilizers and everything. So of course to have that tank of fossil gas outside of the farm is not something that they want to have going forward, of course, and also just not to be dependent on those companies delivering the gas as well. So if you can capture it from the air and just set the PPM level and the machine will take care of it for you, I think that's a big usb as well.

Harry Duran

-:

Is there anything that the farms have to do to prepare for installing a unit of this size? Or is it pretty much a plug and play unit?

Mattias Karls

-:

Yeah, plug and play. Of course, you need to make some holes in the wall to connect it, but that's pretty much it. We really try to make it easy for the operators. So you can either go in just using an app to set like the PPM level you want in the farm, or you can connect it to your software you're using to manage your farm. Yeah. So that's a very small installation.

Harry Duran

-:

And so as you think about expanding and accommodating bigger farms, what do you have to the point that you can't speak about in terms of the roadmap for future development?

Mattias Karls

-:

Yeah. So in the roadmap is to make a much larger unit as the next step. So it will be based on the same architecture and sort of same technical solutions as in this first unit that we launched. We said that it should be available in the end of this year. I think that's a bit of a stretch. I think it's more early next year. So of course, I mean, I think if you look at it, a lot of smaller farms, they are very innovative when they're looking at new technologies and a lot of the cool stuff and so on, but it's also hard to get it to run with a profit. So of course, going to the larger farms makes perfect sense, of course, but I think also from a sort of step by step approach, it's good to have this first unit, and you can show that it's working, and customers can test it in the nursery or in a smaller farm, or like a showcase farm first, and then they can go for the big unit as the next step.

Harry Duran

-:

How do you think about, in your leadership role as CEO, the next decision to make, who to hire, how big to grow the team, how fast to grow the team? I'm curious about your thought process, because this is something that a lot of your colleagues deal with, especially in an industry like this, that's growing so fast. And you talked about this earlier with the nanotechnology company you were working with, how quickly you had to figure out what was next. So maybe there were some lessons learned there. But I'm curious about your thought process, about how you think about where to invest, your, what's the best use of your time and the company's time.

Mattias Karls

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Yeah, that's a very interesting topic and question, I think, because I think if you can go so many different ways when you are starting a company like direct carbon, because what we really had was a very efficient adsorbent taking up the CO2 from the air, and we had this patent on how to do it, basically on to implement that in a machine. I guess the normal way to do it would be to hire a big tech team. Like you need someone to design everything and make the drawings and source all the components and parts and do the assembly and so on, which is really tough, because then you focus so much on the operation of the business, just to make the machine ready so you can ship it. What we did instead was that we sort of looked at, what is this that we want? Like, we need a machine that can generate the CO2 to farms. That's it. And it should be easy to operate and it needs to be inexpensive. So we started looking at similar sort of type of equipment, and Sweden is quite famous for air handling. So we had this guy, Carl Montana, he was a super swedish inventor, and he invented this sorption wheel back in, I think, in the thirties, I think. So that's what in most dehumidifiers around the world, this honeycomb structured wheel. So super clever invention because it has large surface area, you can push a lot of air through it with low pressure drop. So it's a perfect surface for us to do the coating of our absorbent. So instead of building sort of the same system, we're actually reusing, like 90% from that type of equipment today. So instead of spending time on drawings and where should we make the hole and should the fan be placed like this or like this? And how can we make it, you know, the seals and electronics and all of that. So we didn't have to work on that aspect at all because we're sourcing the parts and we can just focus on getting the system out there. And the same, I think, for the larger unit as well, we will use the same approach. So, I mean, we have launched this system now and sold units with a very small team compared to a lot of other companies, which also makes us flexible, I guess, when it comes, because companies I've founded in the past, you raise a lot of money, you raise a lot of expectations, and you need to keep a really high pace and you need to deliver every quarter and if not everyone gets disappointed. I think in this case, we have sort of under promised and over delivered, I think so. Managed to get the first product out there with a small team and not spending as much money. I think that's. It's fun, I think, to do it like that instead of doing the big bang, sort of doing everything, there must.

Harry Duran

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Be a sense, a little bit of national pride as well to have that historical context of the, you know, of that invention. And now working in the same space. You're almost following in the footsteps is most interesting.

Mattias Karls

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Yeah. And I guess I was a little bit inspired as well to talk to someone from this industry that. Yeah, he made a little fun out of some of the engineers sort of building the vertical farms that they make it so complex and say, what if they didn't build so much and test so much? What if they just went to the hardware store and looked at what solutions are already out there? It's true. I mean, if you have a lot of clever engineers and you have a payroll of like 40 people, as opposed to develop a new system. They develop the system, but it takes them two, three years and 50 million crowns to do it.

Harry Duran

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Well, yeah, I mean, it's almost like they have to show, you know, their work to justify their paycheck and they're doing work and they have to create something and then it'd be too easy to go to the store and buy something because then they'd be out of a job. So it's challenging, like a normal nut and bolt.

Mattias Karls

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It won't work. We need a special one because it needs to be so and so and.

Harry Duran

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Yeah, yeah, yeah. Reinventing the wheel. What's a tough question? You've had to ask yourself recently, tough question.

Mattias Karls

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Good one. Not sure. I ask myself tough questions all the time, I guess, but no one in particular, I guess it's always, I mean, what you always struggle with as an entrepreneur, like a startup company, is balancing the spending and the progress of the company. I mean you have, even if we're a small team, but I mean you want to go to all the fairs, like you want to go and visit all the customers, and you want to buy stuff and invest in better processes or consultants that are supposed to do something and you want to hold it back. But on the other hand, of course you need to have progress as well. So that's, I guess, where I struggle the most. Like, yeah, it makes sense we should probably invest in that, but should we do it now or should we so go through some sort of value points first? So that's always on my mind, I guess.

Harry Duran

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And it's probably helpful that you've had so many experiences leading companies before and seeing what works, what doesn't, what's been tried and how other leaders have probably reacted or pivoted in the same situation that you were. So I'm sure some of that historical context is helpful for you as you make these future decisions.

Mattias Karls

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Yeah, I hope so at least. But it's always hard. Always hard. But of course you maybe get a little bit wiser if you've done it a couple of times before.

Harry Duran

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Yeah. So I've been leaving some time at the end of these conversations to foster a conversation between your colleagues and your peers in the indoor farming space. So I know this is something that you're just getting acquainted with, but having had your experience, especially your leadership experience, I'm curious as to any thoughts you might have for your peers, your colleagues in indoor farming, the industry itself, from what you've seen with direct carbon. Any thoughts that come to mind?

Mattias Karls

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Not really. I mean, for me it's still learning, I guess, the industry and you see some clients and it feels like this is a really clever solution. Right. It doesn't seem over engineered, it's just clever and it would, it seems like it would scale really well. But maybe the time is maybe hasn't been enough time, I guess, because you don't see that many large sort of large adoptions of the cool technology, I guess, yet. So I guess that's more to come. But of course it would be interesting to see some. I guess if you're setting up a big vertical farm today, I would assume that you can actually source the different components that they will actually fit together. As we joked about before, like, there's no issue with the inches and metrics compatibility.

Harry Duran

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Yeah.

Mattias Karls

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So maybe that's where the industry is right now. But I guess I've seen a lot of the companies that were supposed to buy like, a turnkey solution like two years ago for setting up a farm. You just need the premise and then you can just source the components and someone else will build it for you. Will be up and running in six months. And then it takes two, three years and it's still not really operational because some machines are not, I guess, showcasing some really efficient, big vertical farms that are actually running that I think could be really inspiring for everyone in this industry.

Harry Duran

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Yeah. I want to thank you for taking the time to come on. It's been inspiring to hear all the different places where people come to in this industry. And you've had a very interesting background working with some cool technologies. And I get the sense that you feel like you're in another industry now working with some new technologies, which seems like it's fulfilling your desire to always be working on something interesting. So I really appreciate you coming on and sharing your background and your story.

Mattias Karls

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Yeah, thanks for having me. I think that a pretty interesting discussion.

Harry Duran

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Yeah. And so for folks who want to learn more, it's direct dash carbon.com. any other place you want to send listeners or the viewers to connect with the company?

Mattias Karls

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No, that's probably the best start. We have some LinkedIn feeds as well, but start with the website and you can sign up for our newsletter and follow us on LinkedIn.

Harry Duran

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Okay. Yeah, we'll make sure we have all those links in the show notes. And if you are watching or listening and you are going to be at Vertafarm, make sure to stop by the direct carbon booth as well.

Mattias Karls

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Yes, please do.

Harry Duran

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All right, thanks, Matthias. I really appreciate your time.

Mattias Karls

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Thank you.