4 ms·

Wow - they raised $100 million. They're expecting people to pay $33/mo for the service, which includes the grinder/dehydrator bin, plus the cost of mailing the

Wow - they raised $100 million. They're expecting people to pay $33/mo for the service, which includes the grinder/dehydrator bin, plus the cost of mailing the dense milled organics back to their processing facility. Figure that actual physical expenses cost $18/mo, leaving $15/mo profit per household; on top of that, they'll have extensive marketing costs - let's say marketing & employee costs take another $10/mo, leaving $5/mo profit per household. That means they'd need 1.6 million households to subscribe for a year just to get their investors their money back, or about 1% of the potential market. How did they possibly win over investors? If I could short this I would.

arcturus17 4y ago
> How did they possibly win over investors? Low interest rates have shifted massive amounts of capital to vc. We’re talking trillions possibly, including sovereign funds and ultrabillionaire family offices. Are those wealth and investment managers nuts? Maybe, but I’ve concluded the most likely explanation is that they know exactly how to play the vc game: place a number of wild bets and hope that one in a hundred pays off. They sometimes seem to barely do due diligence, perhaps for efficiency and speed in allocation, and because the vc portion of their otherwise well-diversified portfolio is tiny. You and I get to partake in the schadenfreude if these stupid ventures collapse but they’re wiping their tears with the returns they make on other asset classes - stocks back then, fixed income now, etc. If interest rates go back to the “old normal” for a sustained period of time then maybe this ends, but maybe the new normal is here to stay. We’ve been told there’d be a big cleanse of stupid or otherwise unprofitable ideas (can we really cram more SaaS solutions into every single niche under the sun?) but I’m seeing very little of the sort, other than layoffs and downsizings which are not thus far commensurate with the fireworks we were promised.
- smallerfish 4y ago
  It's true, but the raise _just happened_, which means there's still loose VC money out there. The narrative has been that there's been a transition to more conservative funding...apparently not in this case, at least.
  - junofan 4y ago
    There’s usually a lag… raise might’ve happened >1 year ago.
- michaelt 4y ago
  > the most likely explanation is that they know exactly how to play the vc game: place a number of wild bets and hope that one in a hundred pays off. But isn't a key point of this theory of investing that you invest in many companies that have a 1% chance of making a 100x return - rather than investing in companies with a 0% chance?
  - arcturus17 4y ago
    Paid composting collection sounds like a ridiculous idea but if for example they manage to become a standard and get monopolistic contracts like waste management companies, on a national level… there’s your moonshot. Here, have a hundred mill.
nstart 4y ago
There is the part where they expect to earn back from reselling the compost. > Mill has partnered with two processing facilities that purchase and turn all this dried food into a chicken feed ingredient, filtering out any errant forks or inorganic materials that accidentally get tossed in the bin. The bit about filtering out inorganic material seems a little too convenient to gloss over though.
- eitland 4y ago
  As a kid who grew up on a small (by Norwegian standards) dairy farm I remember it confused me that food waste couldn't be sold to farms. As a grown up, seeing all the stuff people put into food waste I can understand it. What I still can't understand though is how many people mistake food wrapping for food..!
  - yourapostasy 4y ago
    > ...how many people mistake food wrapping for food..! It isn't mistaking, it is not prioritizing the cognitive load for the separation effort. When I was in Japan, I was impressed with the level of fastidious compliance I witnessed in materials separation. That convinced me the talk in the US about how mainstream households could not possibly support a comprehensive cradle-to-cradle materials handling infrastructure are really talking about culture and/or necessity and not logistics.
    - rsync 4y ago
      "... I was impressed with the level of fastidious compliance ..." Diversity is neither bad nor good - it just has benefits and costs. You witnessed one of the costs. On the other hand, we invented jazz and snowboarding. Those are examples of benefits. I prefer the diversity.
      - SirSavary 4y ago
        Japan, a country famously known for lacking innovation?
rcme 4y ago
I paid around that much to have my compost picked up from my apartment weekly. They would drop off a reuseable bucket for the upcoming week and pick up the bucket from the previous week.
- Thrymr 4y ago
  It's a reasonable local business for a waste disposal company. How is a VC funded company expecting "tech-like" returns?
elil17 4y ago
How did you figure those numbers? They don't seem related to any of the content in the article or any other content I can find about them online.
hedora 4y ago
I'd pay $100-200 for the trash can thing. There is a company making a smaller one, with the idea that you toss the output into your own compost pile. It cuts down on odor, rodents and time to compost completion. What happens to the trash can if I stop paying the subscription fee? (Fast forward a few years, and someone will rewrite the above as a postmortem.)
- twosdai 4y ago
  I used a local version of this type of product in a city I used to live in. Main positive is as you mentioned, food waste smell is gone, and no rodents/animals in the trash either inside or outside.
- sh1mmer 4y ago
  We have a Vitamix Foodcycler [1] we got on sale. It works well but the cycles take a while and it doesn’t process that much at once. Honestly we just went back to using a counter top bucket and then putting it in our municipal food waste bin. Austin turn all that stuff into compost, and then give it away to the community (just turn up with bags) and I assume use on city run parks and so on. [1] https://www.vitamix.com/us/en_us/shop/foodcycler-fc-50 https://www.vitamix.com/us/en_us/shop/foodcycler-fc-50
- soperj 4y ago
  Honestly if you have a big enough pile, just bury the waste in the compost. Or get a Green Cone Solar Digester, I've literally put hunks of meat & coconut husks and it just disappears, no rodents, no smell. I was putting buckets of compost in there every week and it would just melt into the earth.
kragen 4y ago
a grinder/dehydrator for organic household garbage would be pretty useful without the service, because desiccated organic garbage won't rot and stink; you can dispose of it at your leisure thereafter, whether by composting, burning, feeding to chickens, or just dumping
gwbas1c 4y ago
Makes me wonder if they're just iterating until they find a business, or trying to have some cashflow while they develop some IP.
swamp40 4y ago
> How did they possibly win over investors? Matt Rogers cofounded Nest. People will throw money at that without asking any questions. Winners often win twice. Plus the hardware grinder/dehydrator could be used in either your own garden or picked up weekly/monthly and sold locally. Plus it's Green and it actually makes sense to try and capture that waste. Something individuals can do to make a difference. I agree $33/mo and a mail-back service is never going to get their $100M back.

arcturus17 4y ago

> How did they possibly win over investors? Low interest rates have shifted massive amounts of capital to vc. We’re talking trillions possibly, including sovereign funds and ultrabillionaire family offices. Are those wealth and investment managers nuts? Maybe, but I’ve concluded the most likely explanation is that they know exactly how to play the vc game: place a number of wild bets and hope that one in a hundred pays off. They sometimes seem to barely do due diligence, perhaps for efficiency and speed in allocation, and because the vc portion of their otherwise well-diversified portfolio is tiny. You and I get to partake in the schadenfreude if these stupid ventures collapse but they’re wiping their tears with the returns they make on other asset classes - stocks back then, fixed income now, etc. If interest rates go back to the “old normal” for a sustained period of time then maybe this ends, but maybe the new normal is here to stay. We’ve been told there’d be a big cleanse of stupid or otherwise unprofitable ideas (can we really cram more SaaS solutions into every single niche under the sun?) but I’m seeing very little of the sort, other than layoffs and downsizings which are not thus far commensurate with the fireworks we were promised.

smallerfish 4y ago
It's true, but the raise _just happened_, which means there's still loose VC money out there. The narrative has been that there's been a transition to more conservative funding...apparently not in this case, at least.
- junofan 4y ago
  There’s usually a lag… raise might’ve happened >1 year ago.
michaelt 4y ago
> the most likely explanation is that they know exactly how to play the vc game: place a number of wild bets and hope that one in a hundred pays off. But isn't a key point of this theory of investing that you invest in many companies that have a 1% chance of making a 100x return - rather than investing in companies with a 0% chance?
- arcturus17 4y ago
  Paid composting collection sounds like a ridiculous idea but if for example they manage to become a standard and get monopolistic contracts like waste management companies, on a national level… there’s your moonshot. Here, have a hundred mill.

nstart 4y ago

There is the part where they expect to earn back from reselling the compost. > Mill has partnered with two processing facilities that purchase and turn all this dried food into a chicken feed ingredient, filtering out any errant forks or inorganic materials that accidentally get tossed in the bin. The bit about filtering out inorganic material seems a little too convenient to gloss over though.

eitland 4y ago
As a kid who grew up on a small (by Norwegian standards) dairy farm I remember it confused me that food waste couldn't be sold to farms. As a grown up, seeing all the stuff people put into food waste I can understand it. What I still can't understand though is how many people mistake food wrapping for food..!
- yourapostasy 4y ago
  > ...how many people mistake food wrapping for food..! It isn't mistaking, it is not prioritizing the cognitive load for the separation effort. When I was in Japan, I was impressed with the level of fastidious compliance I witnessed in materials separation. That convinced me the talk in the US about how mainstream households could not possibly support a comprehensive cradle-to-cradle materials handling infrastructure are really talking about culture and/or necessity and not logistics.
  - rsync 4y ago
    "... I was impressed with the level of fastidious compliance ..." Diversity is neither bad nor good - it just has benefits and costs. You witnessed one of the costs. On the other hand, we invented jazz and snowboarding. Those are examples of benefits. I prefer the diversity.
    - SirSavary 4y ago
      Japan, a country famously known for lacking innovation?

rcme 4y ago

I paid around that much to have my compost picked up from my apartment weekly. They would drop off a reuseable bucket for the upcoming week and pick up the bucket from the previous week.

Thrymr 4y ago
It's a reasonable local business for a waste disposal company. How is a VC funded company expecting "tech-like" returns?

elil17 4y ago

How did you figure those numbers? They don't seem related to any of the content in the article or any other content I can find about them online.

hedora 4y ago

I'd pay $100-200 for the trash can thing. There is a company making a smaller one, with the idea that you toss the output into your own compost pile. It cuts down on odor, rodents and time to compost completion. What happens to the trash can if I stop paying the subscription fee? (Fast forward a few years, and someone will rewrite the above as a postmortem.)

twosdai 4y ago
I used a local version of this type of product in a city I used to live in. Main positive is as you mentioned, food waste smell is gone, and no rodents/animals in the trash either inside or outside.
sh1mmer 4y ago
We have a Vitamix Foodcycler [1] we got on sale. It works well but the cycles take a while and it doesn’t process that much at once. Honestly we just went back to using a counter top bucket and then putting it in our municipal food waste bin. Austin turn all that stuff into compost, and then give it away to the community (just turn up with bags) and I assume use on city run parks and so on. [1] https://www.vitamix.com/us/en_us/shop/foodcycler-fc-50 https://www.vitamix.com/us/en_us/shop/foodcycler-fc-50
soperj 4y ago
Honestly if you have a big enough pile, just bury the waste in the compost. Or get a Green Cone Solar Digester, I've literally put hunks of meat & coconut husks and it just disappears, no rodents, no smell. I was putting buckets of compost in there every week and it would just melt into the earth.

kragen 4y ago

a grinder/dehydrator for organic household garbage would be pretty useful without the service, because desiccated organic garbage won't rot and stink; you can dispose of it at your leisure thereafter, whether by composting, burning, feeding to chickens, or just dumping

gwbas1c 4y ago

Makes me wonder if they're just iterating until they find a business, or trying to have some cashflow while they develop some IP.

swamp40 4y ago

> How did they possibly win over investors? Matt Rogers cofounded Nest. People will throw money at that without asking any questions. Winners often win twice. Plus the hardware grinder/dehydrator could be used in either your own garden or picked up weekly/monthly and sold locally. Plus it's Green and it actually makes sense to try and capture that waste. Something individuals can do to make a difference. I agree $33/mo and a mail-back service is never going to get their $100M back.