William Leonard
Hey, ladies and gentlemen, welcome back to the Atlanta Startup Podcast. I’m William Leonard, your host and investor here with Valor Ventures. Valor is a leading seed-stage venture capital firm here in Atlanta, Georgia. today, I’m really excited to sit down with Jeff Gold, founder and CEO of Nexus. Jeff, welcome to the podcast.
Jeff Gold
Well, I appreciate it. Thank you very much. Pleased to be here.
William Leonard
Great, great, Jeff, I am eager to dive in here and learn a little bit more about what you’re doing in the world of waste management in energy production. But first, I’d love to learn a little bit more about you. What is the Jeff Gold story?
Jeff Gold
The Jeff gold story? Well, I’ve been doing environmental work now for close to 40 years. I’ve done that in a variety of environments and places. I have an environmental remediation firm that I’ve been running now for about 30 years which is, I guess, a long time. I’ve got a couple of spin-offs from that even but we actually operate globally doing projects. I guess you might say that most other people don’t want to do it; they’re a little more dangerous and a little more tricky. We handle things like chemical weapons and radiological materials and things like that. Most of my life has been spent doing that. And then, of course, Nexus came along. That occupies a vast majority of my time these days.
William Leonard
Awesome. Are you from Atlanta originally?
Jeff Gold
No, I’m not. I’m actually from upstate New York. I was born up there and went to school at Cornell up there. My wife got into Emory as a grad student, and we never left. She never left Emory. She’s now faculty there. We’ve been here now since ‘79 I think. A long, long time. Yeah, definitely.
William Leonard
Well, we’ll get into how you’ve seen the Atlanta business and startup ecosystem evolve a little bit later in this episode. Can you give us the two-minute rundown as to what Nexus is, what you’re practically doing, and how it’s impacting not just the United States, but the globe, really?
Jeff Gold
Sure. Nexus is currently processing waste plastics and we convert these plastics back into oil and wax. Now, these are plastics that do not have a life outside of their original use. They’re actually landfilled for the most part. They don’t go through the traditional recycling facility where they’re repurposed and used for other things. These are plastics that largely are film plastics, but some of them we get, you know, gardening pots and things like shrink wrap, bubble wrap, and all these different things. We go through a process known as pyrolysis which is nothing more than heating these things up in the absence of air or oxygen. And in that process, you’re able to basically break the plastics down into very easy-to-move and easy-to-use waxes and oils that are then used. The whole story here, they’re currently being used to make new plastics, these things go to some of our partners. We have two main partners right now. They handle these in the form that allows them to then produce new plastics and new materials out of certified recycled material. Now, what that does as far as an impact goes is, it’s our desire that we make a dent in some of the plastic pollution issues that we’re facing today. I don’t think there’s hardly anybody around that hasn’t seen a plastic bag up in the trees, or in the bushes, or blown across the street, or something like that. I don’t think there’s anybody that I know that thinks that’s attractive or desirable. Aside from that, there are very few people that don’t understand the nature of the pollution in the oceans, where it’s affecting seabirds, and of course, fish. You hear about the whales washing up their stomachs full of plastic bags and things they think are jellyfish. We’ve heard that these plastic particles are found in the Himalayas, and it’s the deepest trench in the Pacific Ocean, the Marianas Trench. It’s an obvious problem that we have to confront. Plastics are something that is, in some ways, in many ways vital to our modern lifestyle and modern society. It’s unlikely and I think unrealistic to think they’re going to go away or be replaced by wood, glass, metal, or something like that because they afford so many benefits, we can get into that later. But the waste of the product that comes about from their use is a problem. There is no one that can deny that. And there’s a lot of effort underway now, not just us. We’re just a small part of this hopeful solution, to be able to better manage this material in a way that harvests the value in that plastic. It took a lot to make it into plastic, oil, or natural gas, and then all the refining. There’s a lot of energy that’s going into a lot of carbon emissions that went into that. We feel that burying that in the landfill is probably not the best way to handle it. And that’s just something that we feel at Nexus is an area that needs to be addressed.
William Leonard
Now, that is a lot of waste per year. I knew it was a large figure, but I didn’t know it was that large. This is interesting, you spoke about the complex process of breaking this plastic down and repurposing it. Prior to you starting Nexus, were there other options for repurposing this plastic? Or was it solely just going to landfills? Is that what led you to start Nexus?
Jeff Gold
I guess what led me to start it was simple curiosity. I read an article back in, I don’t know when it was 2007 or 2008, and it was about a company in Switzerland that had been taking plastic bags and converting them back into oil and I thought, “Wow, that’s just unbelievable.” Because even then I knew plastics were an issue because they don’t degrade very quickly, if at all, and when they do degrade, they break into smaller and smaller pieces. I know it’s a problem and so that is kind of what led to the initial steps that were taken to develop Nexus and to answer the first part of your question, there’s a huge variety in plastics. There are all kinds of plastic. Like your grocery bag or something, there may be multiple layers, different inks, different additives that make it stronger or more stretchy or resisting UV radiation. All these different things go into it. So even within the plastic, there’s a huge variety. And within that variety, you have some plastics that are easier to recycle than others. You mentioned, prior to us doing this and others, there are other companies in the world doing this as well. We’re not the only ones. Most of the clean plastics and the high-value plastics were being mechanically recycled. And by that I mean the water bottles, those called PET, or it’s a number one designation, if you look on there, you’ll see that little triangle with a number in it, that’s a number one. Those were being captured and recycled. And then the number twos, which are like your shampoo bottles, or your laundry detergent bottles, also have high value, and they can be mechanically recycled fairly easily. Where you started getting into trouble is with the number fours, which are your films, your low-density polyethylene is called. It’s difficult to recycle those. It’s difficult to get them clean enough. However, there are companies, one example of that is a company called Trex and they make plastic lumber, basically, they mix it with wood, and they are able to produce a very weather-resistant type of product. That was one outlet but again, the material had to be fairly clean. Where we fit into that whole puzzle is we’re able to make plastics that are not so clean, not so good, really not suitable for a company like Trex to use or other companies that want to take the plastic and make it into new plastic by simply just re-melting and reforming it. That’s kind of the niche that we filled, we’re taking material that really is a little dirtier, a little more mixed, you might have five or six different kinds of plastic mixed in there. We can process that and end up with a good product at the endpoint.
William Leonard
Gotcha. That’s interesting. I didn’t know there were so many different classes of plastics. But I guess it’s more so obvious when you think about it, and to practically repurpose these plastics. Can you provide our listeners with a high-level breakdown of the supply chain that you go through to fulfill this repurposing?
Jeff Gold
Sure. The key question in this whole business is how do you get feedstock? We call it feedstock. Where do we get this stuff from? You think, gosh, there’s plastic everywhere. You go to the grocery store, and you have the boxes out in front, put them in plastic in there, and you see them blowing around, and there’s just tons of plastic. But the problem comes in terms of contamination. We’ve heard millions of stories about those collection bins at the supermarket, where people are putting in their used bags and plastic bags then you’ll see somebody walk by, and they’ll throw their drink in there, and it’ll be half of a slushy in there. They’ll throw their half-eaten hot dog in there and they treat it like a garbage bin. That’s the problem because contamination is one of the main reasons we don’t have higher recycling rates here in the United States. We recycle only about 9% of our products or materials. At least in northern North America, we have such ready access to landfills. Land is cheap. Landfills are not expensive to put stuff in. We’ve grown accustomed to just kind of well, you know, just throwing it away. That also goes back to when plastics in the 1960s were first getting widely adopted. The mantra then was, “No, use plastics because they’re so easy. You don’t have to worry about cleaning them, you just throw them away and they’re gone.” You don’t need to think about it and that kind of attitude, that kind of culture still pervades what we do today. It’s something that the Europeans are a little bit different from us and they’ve been much better at recycling for a much longer time because they don’t have land over there to use for landfilling, as it’s much more expensive to do that. There’s a lot of other reasons that they are much better at recycling. That’s one thing we had to overcome. But it’s a matter of just getting this material and sourcing it from a number of different places. We have what we call a couple of primary suppliers and what we refer to as a long tail, smaller supplier. We get it from a variety of places, sometimes brokers. There’s recycling brokers and what they do is they aggregate from a bunch of different sources, they go through, they take out the high-value things like aluminum cans and the water bottles. What they do then is they build the rest up, and they send that to us. That’s what we’re using. Well, in other cases, we’re getting material that comes directly from some of the manufacturers. Some of the larger companies that use a lot of plastic and have a lot of plastic waste, whether it’s through packaging or scrap, and they’ll ship directly to us. That’s what we call post-industrial or post commercial plastics. Everybody’s thinking, “Well, what about the post-consumer? What about that stuff that I put out on the curb in my blue bin?” What happens with that is a little more convoluted. Right now, we are not taking very much postconsumer. We’re taking some, we get it here in Atlanta, there’s a place called the Center for Hard to Recycle Materials. It’s the acronym CHaRM. People will bring paint, tires, old car seats, all these different things down there, and including a lot of plastic. We take delivery from them, at least once a week, a truckload delivery from them of plastics that they’ve gone through, sorted through, and we can take that. It’s really good stuff. We also work with a program called the Dow Energy Bag Program. This is currently active in Cobb County. What they’re doing there is Dow has subsidized a program where they manufacture an orange bag and it’s orange so that the recycling facilities can easily spot it. What they do is put these in the supermarkets for people to buy. They’re specifically designed for the plastics that you don’t put into your blue bin. The blue bin, they want your water bottles, your detergent bottles, they don’t want your dry cleaning bags, and they don’t want your dog food bags. They don’t want all those different things. This energy bag, they call it, is meant to handle that material. Those bags then are brought to a recycling facility where they do an initial sortation on them and then they all come to us. We get to process them as a post-consumer kind of thing. But we have little ways to go yet, not only in Atlanta, but we have a little ways to go as a country in terms of getting our post-consumer recycled streams clean enough that we can handle them in a place like Nexus people again. The folks that have these or their kids or whatever, often don’t distinguish between the recycling bin and the garbage bin. And as a result, we see things like shoes, shirts, wood, cardboard, and paper, you name it. We’ve probably seen it come through and people think this is good to recycle. The other thing you’re up against here is people who want to recycle. People really do. They really want to recycle and they often think, “Gosh, if I just put this in there, maybe they’ll find something to do with it. Maybe they’ll be able to recycle that.” We call that wish cycling. And unfortunately, it doesn’t work that way. What that usually does, when that load arrives at the recycling facility, it’s considered contaminated. It generally is going to go to the landfill, and they aren’t going to sort the good stuff out because it’s just too difficult and not economical to do it. That’s the long answer to where do we get our stuff. We did get it from a number of places, we have a radius in Atlanta in the southeast, we go out about anywhere between 150 and 250 miles to sources material. A lot of it’s really local. But that’s kind of the radius we’re working in right now where it’s economical to bring the material and we pay for this plastic. We pay a couple of pennies a pound generally. In some cases, it’s delivered free because the user just wants to get rid of it, which is great. But we want to see people rewarded for their work, sorting it, and segregating it out.
William Leonard
That’s an interesting point. You touched on the concept of wish cycling. People want to throw something away but try to find a recycling use case for it and actually end up contaminating the entire load so it just goes to the trash. That’s interesting. Is there education around that? I feel like people do that often and maybe they’re not realizing what the true impact is.
Jeff Gold
It’s really incredible. Like I said, people want to recycle, they really do. They don’t want to see their stuff go to waste. They just don’t have the information they need, which is one of the big education efforts that is trying to be launched not only at us, local and state, but even at a federal level, to bring people kind of up to speed as to what is recyclable and what is not. Now, that gets into a whole bunch of other issues like manufacturer responsibility. Manufacturers are being pressured now, and I think rightfully so, to try to make their products easier to understand what can be recycled. What I said earlier, film and plastic aren’t just film and plastic. In some cases, bubble wrap may have eight different layers of plastic in there and do different things. And who is thinking, “Oh, my gosh, eight layers and that little thin film?” Oh, yeah, there really is. If manufacturers can make products that are easier to recycle, easier for consumers to understand what is and what isn’t recycled, well, that is a big part of the battle. You mentioned education. With the Dow Energy Bag, yes, with the box, the bags, and everything that comes with it says here’s what you can put in, and here’s what you should not. I think most people on their blue bins, even have a little message on there. One program that was done in Atlanta I think was called Feet On The Street. It was a program that was funded by I think the EPA. What that did is they had people literally, Feet On The Street, that would go around and they would look in people’s recycle bins before they were picked up. It kind of sounds weird, but they would kind of rummage through there and say, “Okay, this is good. This is good. This is a bad one.” What they would do is if they found enough material in there that was not compatible with the recycling goals there, they would put a little “Oops” sticker on that. That would signal the truck not to pick that load up. It was extremely effective. People, as I said, weren’t like, “Oh, darn, I was trying to slip one by.”They’re like, “Oh, my gosh. I never knew.” They would take the material out the next time that came around, bingo! They had jumped from 9% to over 40% compliance with the type of materials that were needed for recycling. Unfortunately, it was a limited-scope program. But that’s the kind of thing if people just knew, I think they would be much more responsive and much more apt to recycle properly.
William Leonard
I think the education piece is so important. I do recycling here at my house. I have a stand-up trash bin and the stand-up Recycle Bin. I made sure to really separate between the two. I’m not want cycling as you mentioned before, but you know, taking a step back, is it correct to say Nexus was started in 2008?
Jeff Gold
That’s correct. I mean, that’s kind of when the idea was hatched. I think we applied for our name and all. It was an outgrowth. As I mentioned earlier, this other company has another environmental company. It was really an offshoot of that company. We had a lot of resources in terms of material and personnel available. At the time, when I could do some basic research, we had a laboratory and all these different things. We were able to do, like you do any good research, you do a literature search, and you do research that way. You look at patents and do all these things. You say, “Huh, so this worked, and this didn’t.” What we then did is come up with some concepts of what a viable system might look like. We did a bunch of bench-scale testing for probably a year and a half – two years. We actually built a little pilot plant to test out some of these ideas. We ran that for four years. It turned out it worked very well. What we found here, and this is a key element because we should probably be talking about what makes Nexus different from other companies doing as well, one of the things that we shot for right in the very beginning was that we wanted to have something that was very energy efficient. We wanted to be part of the solution here, not part of the problem. Unless we could make it energy efficient, we knew that we really were no different than anybody else. More importantly, we weren’t going to have a sustainable business. You can have some interesting technologies. You go on YouTube and look up pyrolysis, you’re going to find people in their backyards, making oil. All doable, you can make this stuff in your kitchen at home, if you want to make some oil out of plastic, you really can. But to do it at a commercial scale and to do it on a consistent basis, you have to have an operating business. You have to have the technology right in the middle. You’ve got to have compliance with regulations in place. You’ve got to have your off-take and your feedstock and your engineering and your strategy. You’re finding all these different elements have to coalesce to a nexus of being a viable business. That was a really important thing. After we ran our pilot plant for four years, we had proven that in fact, we were extremely energy efficient. And that gives you an idea, we had a third party come in and an engineering firm does an analysis. And they concluded, after a lot of testing, that for every energy unit we were putting in, and that included both gas energy and electrical energy, that we were getting almost 40 energy units out. To give a comparison, ethanol is about 1.3. In other words, for every one energy unit you put in, you get about 1.3 energy units out in the form of ethanol. For us, we get about 40 energy units out for every energy unit, whether it be DTU, or kilowatt, or whatever it might be, for every one of those we put in. That’s a very high return. Now, our commercial plant is not operating at that level yet but we fully expect that it will be. What that means is, we’re getting really good, efficient use of the resource. That’s possible. You say, “Well, how is that? Are you creating energy?” No, of course, we’re not creating energy. What were essentially doing, what this process does, and the reason we’re able to get those efficiencies is we’re doing nothing more than taking basically chemical scissors and just cutting up those plastic chains. Plastic is made up of these long chains of molecules. All we’re doing is cutting those chains apart into their smaller forms. People should recognize the names of some of these smaller forms like propane, for instance, or octane is another one. We get the whole gamut there. But all we’re doing is we’re just breaking it back down and making it into these smaller compounds, which we then collect. That’s our product. It’s that simple.
William Leonard
I love how you broke down the story there, how you set out at the onset of the business to really be the most efficient player in the space. I think that gives you that strategic advantage to not only scale but to be sustainable. I think that’s why you’ve had that much success is because you set out with that efficiency. I’m curious, you started out with your first plant, you said for four years, which operated and ran. How has the business evolved, really, since 2008? I know we touched on this before we started our conversation live, but Nexus versus Nexus Fuels, you drop the fuels part of the name, what was the genesis behind that?
Jeff Gold
That’s a great question. We always started as Nexus Fuels, because at that time in 2008, though really 2013/2014, the market that this material would be sold into was the fuels market, whether that be diesel or possibly refining into gasoline, or what they call bunker fuels, which is a lower grade fuel for that’s used in ships oftentimes. That was the available market. That’s what we thought that we would be selling into. Well, interestingly, there was a bit of a revelation in the refining business in the chemical, plastics, manufacturing business, and that were that they could take this kind of oil because it was very close to what plastics were anyway, put it through what they call a cracker, which basically cracks or further breaks down these different molecules. And at the tail end, you can get brand new polyethylene or polypropylene. Usually what they’re doing is making polyethylene with it. You can take the wax that we make, you can take the oil that we make, and create brand new virgin plastic. Now you know people say, “Wow, it can’t be that clean.” Well, it is chemically, physically, in every way identical to what you would get out of a plastics plant that’s making brand new plastic. It is brand new plastic. What happened then is around the 2014/2015 timeframe, we started seeing this little change occur. We were like, “Wow, this is great.” And the reason for us, it was great. As I said, I’ve been doing environmental work for a long time. And as a person that was concerned about the environment, we didn’t want to see our product burned or combusted in engines. If there was an alternative because we’re helping with the plastics pollution problem, but we’re adding to the greenhouse gas problem. That is something that we really don’t want to do. I think we probably shifted maybe two, maybe three of our first tankers went off to fuel usage. And then after that, we completely shifted gears, and dropped the fuels part and work now exclusively, every drop of the product we make goes into making new plastics. That is very important to us philosophically because we want to be as good stewards of the environment as we can be and not create a new problem out of something that we’ve done here. That’s how the name went from Nexus fuels. We’re just using Nexus. We just think it’s more appropriate.
William Leonard
Interesting story there. I’m always curious to hear how a company has evolved over its lifecycle because it’s guaranteed that you’re not going to be the same business that you were at the inception of the company. I think you’re still going to experience a lot more involvement and continuum as you stay building here at Nexus. And, you know, Jeff, you’ve given, I would say a masterclass on waste management, and in really understanding energy production, I want to take a step back here and talk about the city that you and I both love. And in Atlanta, you landed here in 1979, I recall. What impact was building in Atlanta had on Nexus?
Jeff Gold
Atlanta is extremely well-positioned for what we’re doing. And the reason I say that is because it’s such a transportation hub. As I mentioned earlier, we have a radius of collection that we go out to and so that makes it easy for people, even if they’re in Chattanooga, or Macon, or somewhere like that, to get material up to us, you know, taking just the Interstate. It’s a transportation hub. Being in Atlanta has really helped us, the southeast. In general, though, aside from just the logistics element, the southeast is a great place, because it’s got a lot of manufacturing here. There’s a lot of companies that are using this plastic, they’re transporting goods, which require shrink wrap, which then has to go somewhere or packaging, which is a lot of what we do. The southeast is a great place to have a company like this because there’s a lot of material available to us. There is the infrastructure to support that getting to us. I think that the regulatory environment, Georgia was the third state to adopt legislation that basically said companies like ours that are taking this material are not classified as waste management companies. They’re classified as a manufacturing company. You can imagine if you’re not a waste management company, and have to comply with all those regulations, that makes doing business here a lot easier. That was a really big, big part. We actually testified with the state legislature to help get that bill passed. I think no one’s looked back. Right now, there are 15 states that have adopted this same position to encourage companies like us to come there and build businesses like this to help those states and cities manage their plastic waste issues. That part of it has been very helpful as far as being in the southeast and being in Atlanta specifically, has been very beneficial to us.
William Leonard
You’re right at the first point. You mentioned the logistics piece of it and you think about the major interstates that are running through the heart of Atlanta. You’ve got 75 going right up to Michigan, you’ve got 20 going all the way to the Mexico border. You have access to so many areas of the country. I’d say, just being based here in Atlanta, and I think your point of Atlanta as one of the first or one of the first three states to actually reclassify manufacturers and waste managers are interesting. I didn’t know that, and I’m sure that had a great impact on your business as well.
Jeff Gold
Oh, it did. And I think it merits saying that. The requirement prior to getting that pass was that we have to basically turn in our inventory every 90 days, which can’t be that hard. We’ve stored here about maybe 1000 tons of material at any given time that we’re processing, and to turn that every 90 days, and to keep track of it and file the reports and all these things, that was going to be a major burden. Having it as an inventory now, we still, of course, track it and everything internally, but we have to comply, of course, with the environmental regulations, wastewater, and air emissions, and things like that. But having that one regulatory shift take place was very helpful and very meaningful to us.
William Leonard
Definitely. Well, Jeff, this has been a fantastic conversation. I can say, I think our listeners will, like I said earlier, find this almost as a masterclass and in just a showcase of your expertise in this industry. I really appreciate you sharing more about your story, as well as being an entrepreneur. I think this is an interesting space to be in right now. As you see a lot of businesses like Amazon, Apple, pledging to reduce their carbon emissions down to zero, I think that’s a whole nother conversation for another day. But I think there’s a lot of innovation happening within this space and Nexus is really leading it, I would say.
Jeff Gold
Well, I appreciate you saying that. We really are trying and just to give you a little bit of an idea, you hit exactly the right point there in terms of these different companies. They have announced very ambitious recycling content goals and they range anywhere from 5% to 50% to 100%, in some cases. When they announce these goals, generally the people announcing that really don’t know what might or might not be available, but that is in fact, driving the innovation and driving the business development in the direction it is right now. If we built 100 plants, and had them running tomorrow, we still could not make a dent in the demand requirements of even just our two offtake partners, which is Royal Dutch Shell and Chevron Phillips Chemical. They have these goals for 2025 and 2030 that are very ambitious, and for us to help them meet those goals. We’re running very hard, but we also have very, very aggressive expansion plans, too so we’re moving forward with that. Right now, there’s a very limited supply of this kind of oil and virtually unlimited demand. If you want a good intro into a business area, boy, you can’t find something better than that. I have to say, though, it’s a hard thing to do.
William Leonard
I can only imagine. Well, Jeff, thank you again for your time. Hopefully, we can get you back on the podcast sometime soon, man. I would love to continue the conversation.
Jeff Gold
I appreciate it. I would welcome the opportunity. I enjoyed the conversation. I think I’ve kind of monopolized the conversation here but I really do appreciate your interest and of course, appreciate your listeners’ interest. If you want to learn more about the company, we have a website https://www.nexusfuels.com/ Fairly easy to find. And, of course, you’re welcome to contact me directly, too.
William Leonard
Awesome, Jeff Gold, nexusfields.com Jeff, thanks again. We’ll talk soon, man. Take care.
Jeff Gold
Thank you. Appreciate it.
Lisa
Thank you for listening to the Atlanta Startup Podcast. You know, we’re not just a podcast, we’re a community, and we’d love to see you at one of our digital or physical events, go to valor.VC and sign up for an event that makes sense for you. We have events for founders and the investors who back them. Another event you might enjoy is Startup Runway. The Startup Runway Foundation is a Valor organization that provides $10,000 grants to founders who are women or people of color building next-generation software products. Applications are free and we’d love to hear from you at startuprunway.org. And as always, thank you so much to the organizations that make this podcast possible. Not only Valor Ventures, but also Write2Market, a tech marketing and PR agency in Atlanta, Georgia, and the Startup Runway Foundation and Atlanta Tech Park Valley’s headquarters, and also headquarters for over 100 local entrepreneurs, building global businesses. See you next week. Please bookmark the podcast and join us.
