By 2050, we need to remove 10 billion metric tons of carbon dioxide from the atmosphere annually in order to keep global temperatures from increasing more than 2ºC — the commonly accepted threshold for when the climate would become unbearably hot and unpredictable for humans in much of the world.
In 2022, we removed two billion tons of carbon dioxide from the atmosphere. Or, I should say, all the trees on Earth removed 99.9% of it and we humans removed the other .1%.
If we don’t ramp up carbon removal at a faster rate than any industry on earth has ever grown we won’t meet our carbon removal goal. At our current pace, we won’t even get close.
Enter Peter Reinhardt, the technologist and startup founder who sold his last company for $3.2B and decided to tackle climate change for his next act. After teaming up with his co-founders, Shaun and Kelly Kinetic, they decided to tackle climate change by running oil wells in reverse and decarbonizing steel. The key? Corn (and other natural waste, or biomass).
The United States grows corn on 92 million acres of land. Every autumn the majority of that corn is cut down by huge tractors, de-cobbed, and the remaining plant matter is left behind.
That’s over a gigaton of embodied carbon, lying in fields. Some of it – about 50% – creates a natural benefit by restoring plant matter and nutrients to the soil. The rest is typically bailed up and burned, left to rot in the field, or in some cases sold.
Plants are efficient converters of CO2 into oxygen. They store the carbon molecules in their stalks and release oxygen back into the air through photosynthesis. It’s one of the reasons natural solutions to climate change are so popular — plant a tree and it immediately starts sequestering carbon.
There’s just one problem: eventually the plant dies and all of the carbon is released back into the atmosphere, which brings us back to the corn stalks being bailed up and tossed.
What if you could somehow keep the carbon stored in corn stalks, almond shells, and other biomass… forever? Could that represent a gigaton of carbon removal in the US alone (as much as 10% of global carbon removal needs in 2050)?
Charm Industrial is betting they can do just that. The story of their approach turning biomass into permanent carbon removal (and one day fueling carbon neutral steel production) is fascinating. It all starts with building a temple to climate change.
Every Saturday for over a year, a group of nerdy technologists gathered to discuss methods to permanently sequester carbon in a way that could be scalable as a business. In between banging their heads against the wall—finding yet another dead end from modeling the finances of a carbon removal method—one of them shared an off-the-wall idea, which Charm’s CTO shared in a podcast interview:
What we wanted to do was produce biochar for soil, but also think about how we can visualize the effects of climate change by using biochar to create these bricks to build the “temple” to climate change.
The idea was to get people to visualize the problem of carbon, in hopes they’d care more about solving climate change. It was a stretch of an idea, but one can understand how ~74 Saturdays in a row researching carbon sequestration methods plus countless hours in excel models would lead you to think a temple made of biochar is a good idea. At minimum, it’s a compelling hook to the early story of Charm.
Much more important than the temple idea, the group gained confidence that there is a clear path to profitability using a biomass-based carbon removal method. That’s a mouthful, so let’s break it down in a quick sidebar before we get into Charm’s business model.
Sidebar: A Quick Reference Guide on Carbon Removal
Carbon removal is the process of taking carbon dioxide out of the atmosphere (or ocean) and storing it so that it no longer creates a warming effect. Because humankind has already emitted so much carbon dioxide, the Sixth Assessment by the Intergovernmental Panel on Climate Change (IPCC) — the canonical international report on climate change from the United Nations — suggests that we will need to remove 11 billion tons of carbon dioxide annually by the year 2050, and 20 billion tons annually by 2100, in order to avoid extreme warming scenarios.
According to The State of Carbon Dioxide Removal report, it is estimated that in early 2023, all the trees on Earth remove just under 2 billion tons per year, while human-generated carbon removal stands at just .002 billion tons per year. This means we need to grow carbon removal by at least 70% compounding annual growth between now and 2050 if we’re going to hit the IPCC goal. Compare that to US GDP’s fastest annual growth of 7% in a single year since 1961. No company has produced annualized capital returns as high as 70% for 30 years straight since 1990.
We need an entire industry to scale at an unprecedented rate over the next 80 years if we’re going to remove enough carbon to make an impact on climate change. It’s not impossible, but if we’re going to achieve our shared goals for the future of our planet, it’s going to be one of the fastest ramp ups of any technology in world history.
As I shared in my post on Carbon Direct, carbon removal solutions are largely broken down into two categories: natural and engineered. In addition to those two categories, there’s a bit of a crossover category between the two.
Here’s a quick reference guide with a sampling of methods in each bucket to help you understand the landscape of carbon removal:
Natural carbon removal solutions include things like:
- Reforestation, afforestation, and forest management
- Peatland, marsh, and wetland restoration
- Plankton, seaweed, and other ocean-based natural solutions
- Soil management through things like regenerative agriculture
Engineered solutions include things like:
- Direct air capture
- Enhanced weathering
- Embodied carbon in things like building materials, concrete, steel, etc
And then there are crossover solutions that involve a bit of both, like:
- Bioenergy carbon capture and storage (BECCS)
- Engineered organisms, such as what Living Carbon is doing to engineer trees to capture carbon more rapidly
- Some ocean methods like those used by Ebb Carbon or SeaChange
Charm fits squarely in the crossover category. They’re using what is undoubtedly natural material in the form of biomass from farm byproducts. But they’re also converting that biomass and storing it with engineered solutions.
Running Oil Wells in Reverse: The end-to-end process from corn to permanent carbon storage
Back to Charm. The first step in turning biomass into permanent carbon storage is to find the biomass. That means working with farmers who have no use for their farm byproducts, and then developing a system to acquire the biomass and move it to a facility where it can be turned into a liquid form.
How Charm goes about acquiring the biomass greatly affects its economics. Based on podcast interviews with their founders, the economics look something like this:
- Picked up off the field: $15 per ton
- Picked up from the side of the field after it’s been cut, raked, and baled: $65 per ton
- Transported to a facility within a reasonable distance from the field: $120 per ton
Today, Charm primarily purchases biomass after it’s been baled, and then transports it to their facilities. They are paying the highest possible price for what is essentially farm waste. This is a problem area we’ll come back to later.
Once the biomass reaches their facility, they chop the biomass into small consistent pieces and then load it into a pyrolyzer. A pyrolyzer is a machine that turns solid mass into liquid form. The machine heats material at very high temperatures in the absence of oxygen, which first turns it into a gas and then condenses it into liquid. Charm uses fast pyrolysis, which produces what Charm CEO Peter Reinhardt calls, “basically BBQ sauce,” because it has a similar chemical profile as liquid smoke.
Diagram courtesy of the Charm Industrial blog
This is a similar process as the one used to produce bio-fuels, but with a key difference in purity. The bio-sludge produced by Charm’s process could not work as a fuel because of its water content. But it will work for storing carbon. The biggest question: how does one get rid of the sludge in a way that stores the carbon permanently?
Charm co-founder Shaun Kinetic noodled on this issue for months before he had a breakthrough: what if we ran oil wells in reverse? What if we became a reverse oil company?
Together with Reinhardt and their team, Kinetic figured out the archaic permitting process in order to run a test. They needed to prove 1) they could transport the liquid to the site of the well; 2) that the sludge would stay liquid long enough to make it into the underground caverns where oil used to live; 3) that the sludge would be stable underground to avoid any potential safety or health hazards; and, 4) that the method would qualify as “permanent storage” to maximize the economic value in carbon markets.
The initial test showed that they could meet all four criteria, and that’s when they knew voluntary carbon markets could become a critical initial revenue driver for the business. Additionally, tests showed that the bio-sludge would solidify once underground, which would allow for permanent carbon storage lasting a thousand years or more—the gold standard in carbon removal and storage.
So the end-to-end process looks like this:
- Work with agricultural companies and farmers to acquire biomass (primarily corn stalks, referred to as corn stover)
- Transport the biomass to a pyrolysis facility (more on this in a minute)
- Chop it into small consistent pieces (harder than it sounds)
- Run the pieces through a fast pyrolysis process to create a low purity, high carbon content bio-bbq-sauce-sludge
- Transport the bbq sludge to oil wells attached to empty underground caverns
- Pump the sludge underground, where it hardens and remains for thousands of years
It’s a reverse oil company! I cannot emphasize enough how cool this is.
There’s just one more thing: the economics don’t work. Specifically, transporting the biomass to pyrolysis facilities breaks the entire financial model for the business. It’s too expensive for the prices carbon markets are or will be willing to pay. The number one reason it’s expensive is because biomass, and specifically corn stover, have very low density (they’re too fluffy!)—which means you need a huge amount of transport space to get a small amount of carbon-containing bbq sludge.
The Charm team had to come up with a way to get closer to the $15 per ton cost of picking corn stover up off the field, rather than the $120 per ton delivered to a pyrolysis facility.
That’s when they came up with another novel idea.
The Future: A Roving Band of Pyrolyzing Tractors
Imagine this: a tractor rolls up with a grabber arm full of corn stover, drops it onto a conveyor belt, and then runs the stover into a machine that turns the stover into BBQ sludge. To be able to recreate this on the site of farms is invaluable to the process.
This assembly line near the farm pyrolyzes the biomass while producing a byproduct of biochar that can be spread back on the field for soil health. It’s a win-win. And creating something like this (which can eventually be patented), is the dream of any mechanical engineer.
But then take it one step further and imagine turning the assembly line on the side of the farm into a system that fits on a tractor. Now multiply by 100,000 tractors picking up waste biomass directly off fields, chopping it, pyrolyzing it on the move, and then spreading the biochar back on the field.
If you don’t see how amazing this would be if the company can get it right, you’re not nearly enough of a nerd to keep reading. I want to drive one of these tractors just to see it in action.
The Charm blog is full of posts about the engineering challenges the team has overcome to create the prototype mobile pyrolyzer units that will allow this whole thing to work. There is an entire class of problems here — like what happens when an errant corn cob cogs up a piece of machinery — that the average person would never imagine.
In order to scale from 5,000 tons delivered in a ten month period to a billion tons a year, Charm will have to create a future where there’s a mobile pyrolyzer on every farm. Or, more precisely, they will have to understand the optimal acreage of biomass waste a given mobile unit can process with minimal downtime, and then produce enough of those machines to process as much biomass waste as they can acquire across the country (and then the world).
Charm’s long-term plan is to produce tens or hundreds of thousands of pyrolyzing tractors and have them rove around the country in pods to follow the harvest schedule of crops throughout the year. This sounds crazy until you realize that this is exactly what harvesting machinery does today. It doesn’t just sit idle on a farm after harvest – it moves on to a new farm to maximize its productive use.
As Charm proves their financial model, there will certainly be competitors who pop up with similar and alternative methods for achieving the same objective. Since we’re racing against an ecological clock to begin with, the game is won when Charm and/or others can scoop up every existing piece of biomass that doesn’t have a positive use and turn it into carbon storage.
The name of the game for Charm is to create a great enough mobile pyrolyzer as quickly as possible, and then turn to manufacturing mobile units for scale as fast as possible. In parallel, their R&D teams can begin optimizing the mobile unit design for minimal downtime, maximum biomass throughput, and cost efficiencies.
This is just phase one of the grand plan. If they can pull off the carbon market phase of their go-to-market plan, they’ll have the cash flow and earned expertise to go after a much more interesting and climate-critical problem: steel production.
Market Expansion: Turning Corn Into Steel
Heavy industry is one of the hardest sectors to decarbonize because of the massive amounts of energy required to produce steel, concrete, and other industrial products. Steel production, depending on the data source, accounts for somewhere between 8-10% of annual carbon emissions.
The classic steelmaking process we’ve used for over 100 years requires burning massive amounts of coal to turn iron ore into a purified form of iron that can be combined with other materials like manganese, nickel, chromium, and others to create different grades of steel.
An oversimplified version of the most common steelmaking process looks like this:
- Mine iron ore from the earth’s crust (remind anyone else of Settlers of Catan?)
- Heat the iron ore at extremely high temperatures to rid it of impurities (including carbon)
- Combine the purified iron with other materials in a blast furnace to spark a chemical reaction that turns it into molten steel that’s then rolled
- Take steel rolls and mold them into whatever steel products are required for end use
Modern technology developments have us on the verge of breakthroughs that would allow low-carbon or even carbon-negative steel. Here’s how James Temple describes it in MIT Technology Review:
“…about 7% of non-recycled steel today is produced in a different type of furnace, using what’s known as a direct-reduction method. It usually relies on natural gas to strip oxygen atoms off the iron oxide ore in a shaft furnace. This produces what’s known as sponge iron, which basically just needs to be melted and mixed with other materials. That second step can be done in what’s known as an electric arc furnace, which can run on carbon-free power from solar, wind, geothermal, or nuclear plants.”
Earlier I mentioned that the bbq-sludge Charm produces through fast pyrolysis is one (complicated) step away from a much higher purity fuel. That fuel is called syngas and it can be used as a near drop-in replacement for natural gas to turn the low-carbon process above into a carbon-neutral steel production process.
Rather than transporting directly to oil wells, the low quality bbq-sludge can be transported to a gasification facility. There it can be turned into refined biofuel that can be used to produce the heat necessary for purifying iron ore. One potential output of that process is a form of Direct Reduced Iron (DRI) called Hot Briquetted Iron, which according to McKinsey is “a less reactive and therefore transportable form of DRI.”
Charm’s CEO communicates an exciting far-off vision of turning corn stover into steel in a vertically integrated supply chain entirely owned by the company…but if that ever comes true, it will be decades in the future. In the meantime, there will be important interim milestones that allow them to chase the grand vision. One of these interim steps would be producing Hot Briquetted Iron and selling it to steel makers.
According to Reinhardt, using Charm’s syngas for iron ore purification leads to byproducts of DRI + carbon emissions. Those emissions are theoretically carbon neutral since they are absorbed from the atmosphere by corn to begin with (this will need to be scrutinized and verified – more on this and other concerns in a bit). If the company were to apply a similar process to the carbon emissions to turn them into the bbq-sludge we’ve been talking about, it could then permanently store them underground and continue to sell those tons on carbon markets.
I want to make sure you’re hearing its impact when I describe the potential here: seed, soil, water, sun, and fertilizer produce corn (or other biomass). Corn is harvested for human food, animal feed, and other uses. The byproduct of harvest is gathered, chopped, and turned into bbq-sludge. BBQ-sludge is transported to a gasification facility, further refined and then FUELS STEEL PRODUCTION. The byproduct is steel and permanently stored carbon.
Are you kidding me!? If, and this is a huge if, Charm can pull this off, it will turn a massive agricultural waste stream into steel + permanent carbon storage.
It sounds too good to be true. And anything that sounds too good to be true often is. So let’s turn to all the things that need to go right for the vision to become reality.
Why This Won’t Work, Just Like Past Bio-Fuel Companies
The number one thing I love about this business is that it’s based on taking a huge swing. Peter Reinhardt, Kelly (Herring) Kinetic, and Shaun (Meehan) Kinetic thought: climate change needs to be solved for the good of humanity, carbon removal is broken as it currently exists, and we’re going to go do something about this. They found a waste material that could be turned into a variety of climate-positive solutions and then thought about the highest impact applications possible.
Any big swing like this comes with hundreds of reasons it won’t work. These are the most critical problems and blockers that Charm will have to solve to scale to a size that matters in the race against climate change.
First and foremost, they will have to be able to scale the sale of tons of carbon removal into carbon markets. For that to happen, multiple things have to go right:
- Voluntary carbon markets need to keep growing, especially the group of first movers funding the green premium to help fund the R&D phase of deep tech solutions
- The value of permanent storage needs to continue to grow in carbon markets such that it becomes a critical decision making factor for purchasers. Right now permanent storage is good marketing, but it requires a sophisticated and altruistic buyer to care enough to pay a premium for that storage.
- Charm needs to be able to prove their financial model in the real world by mass producing mobile pyrolyzers, proving the cost of transport at scale and coming down the cost curve into the range of acceptable cost per ton for more buyers
- Regulatory carbon markets continue to expand, and Charm’s work from #3 above makes them cost competitive in those markets. This includes lobbying for inclusion in the IRS tax code’s 45Q provision, which currently does not cover Charm’s method of carbon removal.
Second, the method actually needs to work, which includes doing no harm to the climate (one of Charm’s core values). That means:
- They need to be able to overcome permitting hurdles, which will grow in scale and complexity as their carbon removal scales. Getting permits to pump at one injection well is very different from getting permits for hundreds or thousands of wells across many states and jurisdictions.
- The storage actually needs to be permanent. The burden of proof here rests on Charm. We need to know what happens to the bbq-sludge when it gets pumped into an injection well or salt cavern. Which leads to…
- We need to know that pumping BBQ-sludge underground is safe. Does it come back to the surface via adjacent wells? Does it infiltrate the water table? Does it produce chemical emissions or leaching that make staff or surrounding communities sick? It is Charm’s job to prove that this method of carbon removal and storage is safe.
Third, is biomass as carbon removal a long-term viable solution? There are so many questions here. The key ones:
- Is the biomass Charm acquires and turns into carbon removal considered “additional” compared to what it would have been used for in the counterfactual? Would it have been put to better use in other ways to benefit the climate, food systems, and biodiversity?
- Are there higher value uses for biomass in the climate solution mix long-term? Who else will be competing to acquire the same materials and will there be enough?
- Are there more efficient ways to scale carbon removal (and carbon neutral steel production)? How does that change over time? Once Direct Air Capture and a host of other carbon removal solutions (some yet to be invented) come out of R&D and down the cost curve, can biomass-based solutions remain competitive? Will that change our answers to the two points above?
And then of course there is a whole other category of questions and concerns related to steelmaking. Charm making steel is far enough in the future that it’s not entirely fair to question the direction as of now. But in order to succeed, they’ll need many complementary technologies to become more widely adopted in steelmaking, including electric arc furnaces to electrify the final stages of steel production.
That will make it more feasible for Direct Reduction Iron to become widely used, which is where Charm’s syngas can become valuable. Charm will have to develop a host of engineering capabilities to produce iron for those furnaces and the full stack of capabilities required to make steel if they hope to become a vertically integrated, carbon neutral source of steel.
Given the likely development curve of sources for green hydrogen from electrolysis (which we didn’t get into here and serves as an alternative to syngas for fueling carbon-free steel production), I’d put the likelihood at low that syngas from corn stover and other waste biomass will be the best way to produce green steel. That said, we need to test as many methods for decarbonizing steel as we can, which is why I still love the ambition. Which is a great segway to why I love this business.
Why This is One of the Most Awesome Companies to Root For Over the Next 25 Years
Every startup has 100 or 1,000 reasons why it won’t work. Startups are inherently interesting for precisely that reason — this probably won’t work, but wouldn’t it be cool if it did?
Charm fits this bill perfectly. It will transform a piece of the world that needs to be transformed in service of solving climate change if it works. And if it doesn’t, it will help a bunch of smart people learn, build skills, and develop as professionals and technologists in service of a grand mission. There is no failure state when viewed through that lens.
A big swing by an experienced founder with all the benefits that come from earned expertise
The thing I love most about this business is the combination of altruism that led to its founding and the massive vision the team has to remove “just a few gigatons” of carbon per year at its peak. This is a tribute to the entire founding team, but I especially attribute this to Peter Reinhardt.
Peter Reinhardt had a huge win in building Segment, his first startup that sold to Twilio for $3.2B in an all stock deal. He gained access to a level of wealth most people cannot conceptualize. Rather than ride off into the sunset, he turned around and plowed (lol) time, energy, and money into starting a company squarely focused on the most important and challenging problem of our time in climate change.
The fact that Charm isn’t Reinhardt’s first startup is evident in small ways from the way he tells the story, to the focus on market and customer development, to the parallelized technical development roadmap. There is a reason that multiple-time founders and operators often find it easier to raise money — they have earned the hard learnings from their past efforts.
Segment’s sale has an important but understated role in the Charm story. While Reinhardt doesn’t talk about it much publicly, partly because it’s now irrelevant with their funding progress, this company would not exist if he hadn’t self-funded the early days. He saw a problem with the state of carbon removal from buying carbon credits as CEO of Segment and decided to put money behind solving the problem the way he wished it were being solved.
If you go down the Charm rabbit hole, you’ll inevitably find your way to Reinhardt talking about his experience at Segment. With an engineering background, he vastly underestimated the importance of sales and customer development in the early days of building Segment.
Reinhardt relays a story about hiring a sales consultant that forced him to 100x his prices on a sales call. Instead he 10x’d them and from that moment on he saw the importance of properly understanding markets and value-based pricing. He goes on to share how the salesperson would ask the most uncomfortable of questions, such as kicking off sales calls with “So, why are we here?” in order to get the prospect talking about their challenges right off the bat.
This is classic consultative selling methodology, and Reinhardt has clearly brought this sales mindset to Charm. This is an unfair advantage compared to purely technical founders.
The last advantage to having an experienced founder is related to product development. In software, product and engineering orgs are often organized into semi-autonomous units responsible for product areas. Those teams build products on parallel pathways.
In my time as COO at ConvertKit, for example, we could have been building a new visual email editor, multiple new triggers for email automations, and a public directory of creators worth following all at the same time.
Reinhardt has brought parallel pathing to Charm. They are simultaneously working on developing their mobile pyrolyzer, testing bio-oil refining for future syngas production, testing and measuring effectiveness of injection bio-oil underground, and building a public measurement, reporting, and verification software to benefit customers and push the industry forward.
By structuring the team into semi-autonomous units, Charm is decoupling progress on multiple fronts and removing the inter-dependencies that would typically exist in a sequential development process. For example, by testing bio-oil refining now rather than waiting until they have perfected their mobile pyrolyzer units, they might uncover critical challenges years earlier that will speed them up when they’re ready to go to market in steelmaking.
Finding the balance between parallel pathing and not dividing focus across too many efforts is a challenge. This takes experience and foresight that might be counterintuitive to a first time founder.
Leveraging their existing VC and tech network to build momentum
Reinhardt is deeply embedded in the VC-backed tech world based out of California. His $3.2B exit gives him infinite credibility with VCs, fellow founders, and talented people considering joining the company.
Add to this the fact that Peter is married to Erika Reinhardt, herself a talented and well connected operator in the tech world, and their impact is multiplied. It was because of Erika’s work at Planet Labs that Peter met his Charm cofounders, Kelly and Shaun Kinetic. Being known and respected in the tech ecosystem creates network effects that drive progress beyond revenue growth.
The most obvious of these effects is the fundraising Charm has been able to do. They most recently raised a $100M Series B that closed right at the apex of the investing meltdown fueled by rising interest rates and the economic uncertainty of 2023.
Charm announced their round in early June 2023 after Climate Tech VC (CTVC), the heartbeat of investing in climate tech, announced in December 2022, “Mid-stage Series B deals are stuck in the dry funding valley of death with two-thirds of investors deploying more slowly.” CTVC followed this up with further warnings of funding for climate tech ventures drying up as of mid-2023, reporting a 40% year over year decrease in funding deals in the first half of the year.
Let that sink in: Charm, a deep tech play tackling one of the hardest problems in climate, raised One. Hundred. Million. Dollars. In the middle of a funding crunch.
They picked up two excellent and experienced folks on their board following the round and added General Catalyst, a follow on from LowerCarbon, Thrive Capital, Elad Gil, and others on the cap table. This is a company preparing for massive scale-up in carbon removal deliveries and that’s partly because of their ties to the tech and investor community.
Before they raised the Series B, Charm was further bolstered by their existing connections, specifically with the Stripe crew. You can hear this at work when Reinhardt describes his cofounder Shaun Kinetic making the critical breakthrough about splitting the pyrolysis process in half to create mobile pyrolyzers that can operate like tractors on farms to make the techno-economics of the entire company work.
Reinhardt goes on to say that immediately after the breakthrough, he reached out to the crew at Stripe Climate (led by Nan Ransohoff with unequivocal backing from the brothers Collison). He dropped them a quick note given that “applications for their latest round of climate grants closed 48 hours later” (as shared on one of his many podcast interviews) and they got back to him quickly to encourage Charm to submit an application, which led to funding in Spring 2020.
If you’re an unknown founder with few connections and an unproven idea, you don’t get that kind of responsiveness from the premier catalytic capital fund in climate. This was accentuated by the $53M commitment Charm received from Frontier in May of this year.
Frontier is the first movers coalition spurred by Stripe in partnership with Alphabet, Meta, McKinsey, Microsoft, Shopify, and others to fund promising technologies through advanced market commitments. The massive vote of confidence from Frontier was a critical factor in the $100M Series B and also tees Charm up to raise further debt-based project financing to scale up pyrolyzer production.
It’s good to be plugged in and Reinhardt is as plugged in as a founder gets. You can call it unfair or you can simply recognize that’s what happens when you build a company that turns into billions of dollars worth of return to owners.
Building in public in an industry that struggles to communicate the value of complex technologies
There’s infinite debate in startup circles on whether building in public creates real value, or whether it’s simply an ego stroke for founders that’s detached from underlying business progress. I’m firmly in the camp of: it’s both.
Building in public communicates, celebrates, and commiserates about the ups and downs of building a company from scratch. It can attract investors and talent when done well. It certainly builds founder notoriety (and sometimes scorn).
But the biggest benefits of all is the morale boost I’ve seen it deliver to teams. Done well, building in public results in the public rooting for your company to win and the psychological benefit to a team working hard to drive progress is not to be underestimated.
Reinhardt has made a habit of telling the Charm story on podcasts, another tactic he took from his experience at Segment. I must’ve listened to 20 hours of podcast conversations with him during my research for this article. The Charm team has increasingly gotten in on the storytelling action, including co-founders Kelly Kinetic and Shaun Kinetic, but also lead engineer Lauren Murray.
Why would they do this? You can think of the podcast tour as ongoing storytelling for fundraising and hiring. But it’s also fuel for articles just like the one you’re reading right now. The team is providing fodder for their story to spread. As they scale operations, this creates a basis of public support that can help accelerate progress and/or buffer against negative news when it inevitably comes.
The team expands the approach to their company blog, writing in an amusing but informative tone about significant engineering challenges and the process they follow to solve them. This gives teammates a chance to share learnings and tells the story of what it’s like to work at Charm. The blog includes a fair share of the typical press release style articles, but the interesting ones are about engineering, which is the heartbeat of the company.
The team is doubling down on transparency, bringing the approach to their core operations as well. You can see this in the messaging about the company making “the largest permanent carbon removal delivery of all time.” It’s part challenge to other companies to step up, part fighting back against naysayers about the value of biomass for carbon removal, and part pride in getting the work done.
They’re extending the approach by building their own measurement, reporting, and verification (MRV) protocol and tool. MRV is an answer to the question, “How do I know that what I paid for actually got done and benefitted the climate?”
You can see every carbon removal purchase in Charm’s public registry. Click through to any given order, and you can view the life cycle analysis, individual deliveries, and whether the full purchase has been delivered or not. Now this is serving as further fodder for podcast interview material, with Reinhardt defiantly challenging the rest of the industry to step up and build transparency into the business model of carbon removal.
He cites Bloomberg’s investigative reporting on the low permanence and additionality of many of the cheap nature-based carbon removals to date as proof that we need more transparency and accountability (while also noting that nature-based solutions are still critical for protecting and preserving biodiversity and ecosystems).
A recipe for executing at a high level: Good leadership, with positive culture, and a talented team
No one who knows me or my work would be surprised by this point: I believe leadership and culture are the fundamental differentiators in any business. Technical chops only get you so far.
In order to scale anything, let alone a never-done-before technology critical to the future of human society, there must be exceptional leadership and cohesive culture. As an executive coach, I’ll fight on this hill for the rest of eternity.
Charm has the technical talent. They have the pedigree of degrees from leading engineering institutions like MIT and Michigan and backgrounds in aerospace, oil and gas, agriculture, and other industries that require domain expertise to succeed.
Every single person I’ve seen say a word about their work at Charm relates back to their personal connection to the mission of returning the atmosphere to 280 parts per million, which is a reference to returning Earth to the carbon dioxide balance that existed prior to the industrial age. It’s the atmospheric carbon concentration that has held for the entirety of civilizational development and that we are now breaking through human activity, primary the consumption of fossil fuels and ecosystem destruction.
The mission is important, it’s ambitious, and it’s personal. A vital mission is the foundation for any exceptional team and culture, but it’s not sufficient for great culture. Stated values also matter. Charm has this covered too:
- First, Do No Harm – we are here to serve the Earth and all of its inhabitants
- Gigatons or Bust – In order to solve the climate crisis, Charm must deliver at massive scale
- Radical Resilience – When the going gets tough, we get going
- Solve the Right Problem – We heat seek toward the problems with the biggest impact
- Weird and Full of Wonder – Never lose a sense of child-like awe and curiosity for the unknown
- You’re Not Alone – We look to others to better ourselves
These are inspiring values. I identify with them and can see how they’d lead to good decisions, collaborative relationships, and a supportive environment. Still, values have become a running joke because the gap between stated values and actions is often large. This is where good leadership comes in.
Leadership is responsible for establishing the behavioral norms and enforcing the boundaries of acceptable behavior. By setting norms and holding people accountable, leaders reinforce culture (and show what will not be tolerated). From everything I can tell from the outside (which is never fully the truth), the co-founders are benevolent and altruistic leaders. They deeply believe in the mission, have technical credibility themselves, and work to reinforce the values through actions.
As with any company, the future of the culture at Charm will rest entirely on the founders’ willingness and ability to hold people accountable and, when necessary, fire people for violating the cultural norms. Early stage startup vibes are often fueled by the smallness of the team, the obvious consequences and rewards of progress or lack thereof, and the feeling of everyone being in it together.
As the team grows, leadership and culture will become the core focus of the leaders much more than technical problems and on the ground execution. This will dictate how far the company takes its mission and vision.
Turning corn into steel is a nice idea. It’s up to Reinhardt and his team to lead well enough to turn that alchemy into reality. We’re all counting on it.
Take Action: Accelerate Climate Solutions with Charm
Three actions you can take to help accelerate Charm’s progress on combating climate change and building a better world:
- Share this story to help more people learn about Charm’s work
- Apply to join the Charm team, especially if you have domain and/or engineering expertise that will help solve problems — having just closed a $100M round of funding, I have to imagine hiring will ramp quickly from here
- Buy carbon removal directly from Charm Industrial – if you’re a decision maker at a business looking to go net zero or someone who’s built the wealth to be able to pay the green premium, first reduce your emissions as much as possible and then buy carbon removal from Charm to combat the rest