How Mission can Move the Needle

Rog How (00:01)

Hello everyone. I'm Rog How and this is The Nugget where we are uncovering business gold for founders. And today I'm joined by a really special guest, Diego Sayez Gil, who's the CEO of Pachama. He works in the field of nature -based carbon projects, essentially with the mission to enable forest conservation and restoration at scale, which is an incredible mission for a company to have. And we'll dive into that in a bit more detail, but first it'd be great to hear

bit about your background Diego because as a founder Pacham is very much not your first rodeo.

Diego Saez Gil (00:37)

That's right. Thank you so much for having me, Rog. yeah, so I am originally from Argentina. I grew up in a place called Tucuman in the north of Argentina at the foothill of the Andes and surrounded by a beautiful forest, the Yunga forest. In Argentina, I studied electromechanics and business.

And then I was lucky to get a scholarship to do a master's in Barcelona, Spain, in project management. So I moved from Argentina to Spain. In Spain, I worked in consulting and I traveled around Europe taking the Eurorail ticket and visiting so many countries in Europe, backpacking. And then I came to the US to do an internship.

And here is where I decided that I wanted to become an entrepreneur. give my try to creating something on my own. And since I was coming from backpacking in Europe, was, the first idea that came to me was, the need of an app to book hostels from your phone. This was the early days of smartphones and apps, and there wasn't any app to book a place to stay.

So that was my first startup with a friend of mine. We built an app called We Hostels where we connected hundreds of hostels with hundreds of thousands of students that use our app to book a place to stay. That company ended up being acquired by a larger travel agency. And it was my first rodeo as an entrepreneur, made tons of mistakes. But it was great to see that you could come out with an idea and bring it into the world.

Right after I sold the company, I went to visit my family in Argentina and the airline lost my suitcase. I was very frustrated because I had a bunch of gifts from my family on that suitcase. And that was the genesis of a new idea, which was how come there are smart watches, smart thermostats, and there isn't a smart luggage that you can track? And that ended up being a...

the beginning of a company called Blue Smart where we created the world's first smart luggage, a suitcase that you could track anywhere in the world. We launched a crowdfunding campaign that was very successful and we ended up selling tens of thousands of this product. That led me to China where we had to source the manufacturing of the product and...

And the company ended up in a difficult situation when the airlines decided to ban lithium ion batteries and we couldn't sell the product anymore. But of course we had all this intellectual property, the patents and the inventions, and we managed to sell that to a larger travel company that was interested in this idea of tracking objects around the world. But that second company will both increase my...

self -confidence, in this time building a hardware company, which is much more difficult than building a software company. But also, my time in China made me become aware of the environmental problems of the planet. I was a couple of days in Chinese cities seeing the pollution of the city. There are days in which you cannot see the next building in Beijing or in Shenzhen.

So I started becoming very worried about climate change and the environmental state of our planet. So I took a sabbatical after we sold the company. And in that sabbatical, I went back to South America and I did a trip to the Amazon rainforest with my brothers. And it was in that trip that the beginnings of the seeds of the idea for Pachama came to me, seeing the deforestation.

on the borders of the Amazon rainforest, which is heartbreaking to see, clear cuts of the forest. Spending time with the indigenous communities that still live among the forest, who had been the guardians of the forest for thousands of years, and seeing their connection to nature, and seeing the power of this forest, these trees, these giant machines that sequester carbon from the atmosphere and turn it into living biomass.

and the biodiversity of these ecosystems. So I became very passionate about that. How could we, as a society, drive more funding to protect and restore forest as a solution to climate change, but also as a solution to the biodiversity crisis, the nature loss crisis? And in doing so, we could create an economy that gives value to nature.

So that was the beginning of Pachama and that's a bit my journey towards this company.

Rog How (05:42)

Great. And it sounds like you've had, you you're the sort of person who has ideas and, you know, there's the first, I guess, component of running a startup or any business. Did you have any ideas along the way that didn't make it?

Diego Saez Gil (05:57)

Yes, since I was a kid, I always been full of ideas and inventions and imagination. And I had to learn the power of focus on one single idea and obsessing about one single idea for a very long period of time, which is a way that you actually turn an idea into

something that works in the world. yeah, mean, the first two styles were related to travel, which was, know, passion of my youth, right? And I had plenty of ideas around travel. And since I became, my main focus has been on sustainability, climate, nature, and environmentalism. I had plenty of ideas around two. Now with the rise of AI,

I'm all the time looking at how AI is going to allow for new things. But yeah, I think you have to stay focused. And then once you found an idea that you believe that you can stay focused for many years, there's a lot of sub -ideas that you can have around how to make that big idea work.

Rog How (07:17)

How about when it sort of doesn't work or works okay, but doesn't hit that kind of scale that you're hoping for? When can you tell if an idea has got legs and when do you make the call to abandon something and move on to something else if you might have invested quite a lot of time and money into it?

Diego Saez Gil (07:36)

Well, I think one evolution that I had was instead of focusing on an idea, to focus on a mission, right? On a purpose and a mission. With my first startup, it was really an idea, you know? It was an app to book hostels. And there wasn't a thought of what was a bigger mission that we were trying to accomplish, right? And if the idea didn't work, then yes, you're in trouble, right? Whereas with Pachama, and over the years I discovered that

what's more powerful is to fall in love with a purpose, a mission, a change that you want to bring to the world. And then you start coming up with ideas that contribute to that mission. And those ideas might or might not work. And if they don't work, you come up with a new idea and you're all the time, you know,

iterating and inventing, but you're very stubborn about the purpose and the mission and very flexible and adaptable and not attached to the ideas and the tactics.

Rog How (08:40)

interesting isn't it because the more developed a company and a brand becomes the more products it starts to produce underneath that brand. So if you take something you know like a consumer brand like Nike or something like that the number of products they actually do now is really wide so it's interesting because starting with that point of okay what is our brand mission and then the products all sit underneath that and they could be many different things.

Diego Saez Gil (08:49)

Mm -hmm.

Yeah, totally. And I think that is what will inspire people to come and join you and come out with their own ideas. And then, yeah, you can create an ecosystem of ideas around a mission that is much larger than any particular idea.

Rog How (09:25)

And through your journey so far, what's been the toughest of the three businesses to run and why?

Diego Saez Gil (09:33)

You know, like the three of them were very difficult for different reasons. I think that.

You know, in general, the job of the founder is to attract all the resources that you need to bring this idea to life. But then also to continue building an ecosystem, and I'm using that word again now in a different context, but an ecosystem around the company, right? In the case of Pachama, we are an ecosystem where we have

project developers and landowners around the world who are, you know, reforesting land, conserving forest and intervening the land, you know, to produce the regeneration and the carbon sequestration. We have an ecosystem of corporations that are buying carbon credits or investing in projects upfront to make these projects happen. We have an ecosystem of investors that invest in the projects and in the company. We have an ecosystem of

verifiers and certifiers that participate on the market. We have an ecosystem of data providers, We ingest satellite data from a lot of different providers to train our algorithms that we use to monitor and verify these projects. And building an ecosystem is hard, right? You need to have the magnetism to attract everybody to work with you. And there is a chicken and egg problem always on like, to get one part, need the other part. So that's one.

And you have to constantly renew that ecosystem, right? You have to refresh and grow that ecosystem. And that is difficult to do. It takes a lot of intentional work, and especially when all these different stakeholders have competing interests sometimes. And in the middle of that, you have to build a business model that is strong and valuable for you and your shareholders. So I think that's been one of the difficulties of

but of all the companies. Every company is an ecosystem of suppliers, customers, investors, employees. And again, coming back to the mission and the purpose, that is to me the guiding force. If you have clarity of what is your mission, what is your purpose, what are your values, that is what is gonna be the north star of your ecosystem.

Rog How (12:01)

Yeah, great. And I imagine along that journey through the different companies that you've run, you've had many highs and many lows. Is there a particular time that you remember which is fondly recognized as the kind of highest high that you've kind of felt along the way?

Diego Saez Gil (12:22)

Let's see. Yeah, definitely many highs. Well, what came to mind is the first time that a company that I created was featured in the New York Times as a big media outlet, right? It was with my first company, actually. They wrote an article in which they talk about my company. I was like, wow, the New York Times. And I remember I sent it to my mom and she was like, that's cool. She got really excited when we were featured.

on a local newspaper in Tucuman, Argentina. she cared about that much more than New York Times. But that is a high that I remember. And of course, this high lasts very little because the next day you had to go back to work and that was it, right? With Pachama, think that one of the great highs that I had with Pachama was meeting some of my heroes, the likes of Jane Goddall.

Rog How (12:53)

Ha

Diego Saez Gil (13:21)

Yvonne Chonnard, the founder of Patagonia, you know, Johan Rockstorm, who's an amazing scientist, and being able to be in venues, in events where I get to meet these heroes of, you know, the environmental movement, have been great highs. And then, of course, you frankly, a high that I get all the time with Pachama is being on the field, seeing the forest that we are helping.

restore and protect.

Rog How (13:53)

And as founders, we all have those stressful moments that happen along the way. What have been some of the toughest things that you've had to deal with?

Diego Saez Gil (14:04)

Yeah, well, actually, not long ago, we had to reduce the size of our team at Pachama. And that is a very painful thing to do. We had to adapt to the changing times, right, where we had to re -forecast. You know, the last two years have been very difficult for many markets, and our market was not immune, and our company was not immune of the storms in our market, and we had to decide to reduce the size of our team.

to ensure the endurance, the financial endurance of the company. And having to let people go, people who were doing a good job, that it was not about them, it was about you and the market, that was very tough. We tried to do it with the biggest generosity and integrity that we could, but that's always a very tough thing to do. I think at this point,

I am, you know, over the years, you become someone who can face, you know, any challenge with equanimity, with centeredness, with an inner peace that if you're doing things with integrity, it's okay, the outcome. But of course, at the beginning of my career, yes, bad things will happen. I will get depressed for a day.

or I'll be totally destroyed if a big deal fell apart. I do remember situations where a big deal that was about to happen didn't happen, an investor rejected us or something like that. And then you put so much intention into this thing that you wanted to happen and it didn't happen. These things used to be very tough these days, to be honest, not really. I can't...

navigate the rejections and the ups and downs with centerness. And we can talk about how I achieve that, but yeah.

Rog How (16:08)

Yeah, yeah. It's one thing you do never know what's going to be thrown at you. It's been described before. I think it was Elon Musk, all people, who was saying that running a startup is like chewing on glass and staring into the void every day.

Diego Saez Gil (16:28)

It is incredibly hard, especially being a leader, being someone that has to give direction to people and you are the center of a network of promises, right? There's a lot of weight in the shoulders of leaders and not just the founders, but anybody who has a leadership position.

and stuff and it requires a lot of emotional maturity to be able to navigate that with you know with with centerness.

Rog How (17:03)

Yeah, great. And coming back to the time of having to let staff go, mean, can you tell us a bit about how you approached that? Because it's something that many founders face and even when times are good, you forget about it. When it comes back round, you have to tackle it again. And there's many schools of thoughts of the best way to do it, the best way to actually structure that kind of process. So was interested to hear how you went about

Diego Saez Gil (17:33)

Yeah, so the way we did it is we did it quickly. We one day announced to the company, to the entire company that we had to make this decision and I was very transparent about the why. I took full responsibility, but I was also very transparent about the financial situation, the market, and...

the reasons why we needed to ensure that the company was sized to the magnitude of the market at the moment. And then we, right after announcing to the entire company, the people who were affected, 15 minutes later, got an email letting them know that they were affected, and the people who were not affected got an email letting them know that they were not affected.

And then we were very generous with the severance. You we gave an above market severance. We gave, you know, six months of healthcare. We let them stay with their equipment. We offer them career services to be placed in other companies. I personally made introductions to many people to other companies and, you know, just invest the time and effort to care for the people who are affected. And...

And then what's important is what you communicate to the people who stay, right? Which is okay, what is the direction of the company? Why did we do what we did? And what are the new things that we're going to be doing and the new things that we're not going to be doing because we're a smaller team now, right? And I think that being clear, transparent and earnest is something that people see.

We also gave the chance for some people to step down if they felt scared or unhappy about that moment. And some people did decide to step down on that moment. And we didn't take it as a negative thing. We were like, okay, this is a new chapter on our company and we want people who stay to be fully bought in into the chapter. As I said, this is a mission -driven company. It's supposed to be hard. We are...

trying to get something, you know, a dream that many people think is impossible to happen, which is for society to give value to nature, for corporations to pay, to take responsibility for their carbon emissions and to pay to protect and restore nature at scale with high quality. So it's a mission that requires endurance and some people...

you know, are gonna be for a part of the journey and then they might want to step out and let other people come in and continue the journey that will continue. So, I mean, these are, think, the finding moments in a company that if you do it right, actually make the company stronger. And the team that stays is gonna be a team that is gonna be...

fully bought in to take the mission to the next level. And the people who go hopefully stays part of the family, stays part of the alumni. And in fact, we have stayed with great relationships with everybody who has been part of the company.

Rog How (21:07)

Fantastic. So let's get into a little bit more detail about Pachama and how you have managed to achieve that scale and how you've also managed to make it a viable business because having that mission is all well and good, but in order to make a company successful, you need to be driving profit for your shareholders. So I was interested to just to dive into the business model and how you've managed to make the financials work.

Diego Saez Gil (21:33)

Yeah. Yeah. So as I was saying, we are in the business of helping drive capital money from corporations and investors to projects that are doing reforestation and conservation around the world. And some of these projects are projects that already have current credits issued and are selling those current credits where we act as a verified broker. We verify the quality of the credits and then we facilitate the transaction.

and we get a fee for that. In other cases, these are projects that are in the earliest of stages and these projects need investment where we help originate the project, we help underwrite the investment and we help commercialize the credits that will come in the future and we get fees for that, right? And we're exploring new ways in which our technology and our data can be used for others to solve their problems and we can get fees for that. So we try to...

find different ways in which as a result of the connectivity, the facilitation of transactions and the tools that we utilize to make that happen with trust, we can charge a fee that is fair for the parties and that will allow them to keep coming back to us, right? So, and so far we have done it and yes, we have driven tens of millions of dollars to forest projects around the world.

already helping have a big impact into hundreds of thousands of hectares of land.

Rog How (23:09)

How about that scale piece now? How are you looking to achieve the kind of scale that your ambition is driving?

Diego Saez Gil (23:19)

Yes, so our ambition is to have a planetary impact, a climate impact. And when I say a climate impact, I mean that so much carbon has been sequestered back from the atmosphere to the ground that actually has an impact on the degrees that the planet is going to warm, right? So for that to happen, we need to drive

billions of dollars to restoration and conservation around the world. And for that to happen, what we need is we need the demand side of this market to continue to grow. And that entails having more pressure on corporations to take responsibility for their carbon emissions, to have more clarity and guidance to corporations about

how to claim net zero, how to source carbon projects, what is a good carbon credit versus a bad carbon credit, to have support when companies do things right. Something that's been frustrating is some people that are very skeptical about corporate climate action, who would criticize any company that talks about their sustainability efforts when they include carbon credits.

But actually that is a shame because these companies are trying to do the right thing. What we found is that the companies that are investing in high quality carbon credits are actually investing much more on decarbonization, on moving away from fossil fuels, on renewable energy, on clean transportation. And then they take responsibility for their residual emissions with carbon credits. And we need the public to support that.

when the public gets to or the journalist, journalists sometimes are very skeptical, sometimes for good reasons. So we need to keep companies and the market accountable of doing things right. But if there is too much criticism, that leads to inaction. Companies will just rather do nothing and not be criticized than do something and be criticized. So we need the demand to expand and we need more financing.

to come to the market, we need more investors to see the opportunity that exists on investing in these projects and then getting a return when the current credits are sold, which is what is starting to happen and it's a very desirable outcome that this is an investable asset class that then can attract a lot of financing to get these projects started, projects that need upfront investment and that are gonna generate income for decades in the future.

And then ultimately we need more projects and the way to get more projects is to get more capital flowing into the market, but also to get more tools, more knowledge, more capabilities distributed across the board in the countries where this project can exist. Latin America is a big hotspot, a big destination for these projects. We have the largest forest in the world in the Amazon rainforest and the Atlantic forest in Latin America, but also of course,

Africa, Southeast Asia, and the rest of the world, frankly, there is always opportunity for restoration. So in short, we need more demand, we need more financing, and we need more projects.

Rog How (26:51)

Excellent. in growing Pachama, being the third company that you've founded, how have you approached things differently to how you've tackled things in the early days of your founding career?

Diego Saez Gil (27:06)

Yeah, again, I think that as I said before, I I I started with a mission and the purpose first. I made it clear that our purpose was to help protect life on Earth because we deeply, we feel part of nature, we feel connected to nature. feel that is one of the highest responsibilities of humanity is to live

a healthier planet for future generations, and not just for humans, but for all other species that we share this planet with. And the mission, which is to restore nature to solve climate change and the strategy of using technology, AI and satellite data and the internet to bring more transparency and trust to carbon markets that can drive the funding needed to restore nature. So we started from a very high level to

lower and lower levels of definition on the company. Whereas in the past, I started with the idea and the product and then, you up. So here I started from the top to the, to the bottom. And then I think what I did different as well was, you know, on forming the team, I had a really high bar for talent, but also a really high bar for mission alignment and for values.

And we were able to attract an amazing group of people that I couldn't have hired otherwise if it wasn't because they saw the mission and they felt called to come and contribute to the mission. We got people quitting some of the largest corporations in the world, Google, Microsoft, Space X, Tesla, to come and work for us. And it was because they felt called.

for this mission and they wanted to contribute.

Rog How (29:06)

And when it comes to that hiring piece, what do you think you look for in the qualities of people when you're selecting them as someone who is the right fit for Pachama?

Diego Saez Gil (29:22)

Yeah, so you want people who have problem solving capabilities, someone who gets excited about solving problems and who has the creativity, the resourcefulness, and the grit to solve difficult problems. So I always ask in the interviews, what's a problem you solved? What is a...

a project that was difficult that you work on and how you participated in. I'm trying to look for their problem solving capabilities and their problem solving passion. You want people who in front of problems don't get frozen or on a victim mindset, but see a problem as an opportunity to go and solve it and create something of value.

Tenacity is part of that and tenacity plays for everything. Cells, engineering, operations, you need people who will persist and will keep going in the face of all challenges. Integrity is super important and integrity to me is not just doing the right thing, but it's saying what you think and doing what you sell.

And that's what I look for, people who are just earnest, genuine on their intentions and who will do the right thing even when nobody's watching, right? And then, of course, excellence and the care for the details, care for the quality of your work, sense of pride in the craft is something that I think makes a big difference.

And then of course, people who are fun and interesting and good to hang out with, positive interpersonal relationships, team spirit, it's super important to create a good culture.

Rog How (31:29)

Excellent. one of the other key roles of the CEO for a scaling company is obviously keeping the money flowing. And so I wondered how you personally approached that when it's come to looking at your raises, who you've approached, what have your kind of tactics been when it comes to fundraising?

Diego Saez Gil (31:52)

Yeah, we were fortunate to, you know, always get interest from amazing investors and several investors at the same time, which allowed us to pick and choose who we wanted to work with. And yes, I always look for people who, and I say people and not firms, because sometimes people say, well, we were invested by ex -firm, but you were actually invested by the person, the partner who,

who put his or her name on the line and who would be the person that you will interact over the journey of the company. And so I look for people who saw the vision that we were seeing, who... I have a preference for founders, for investors who in the past were founders themselves and that therefore has the empathy to understand how difficult the journey is.

And how long sometimes it takes to create a very valuable company. And then, you frankly, I mean, my advice for founders always is a numbers game. You have to talk to a bunch of people to, you know, find the right ones and for them to fall in love with you too. Right. So it's like dating, you know, it's not going to happen in the first date. You have to, you know, see a lot of people until you find the right match for your company. So.

So yeah, mean, fundraising is an ongoing effort that a founder has to do. You have to be all the time, you know, being connected to investors that, know, like in many cases, the investors that invested in our company, I met them one or two years prior to the actual investment, right? So it's a process of getting to know each other.

Rog How (33:44)

And is there any way you've approached getting that kind of access? How do you approach people to start with? Is it going to the right events or just cold calling? Or how do you actually get your foot in the door in the first place?

Diego Saez Gil (33:58)

Yeah, no, I mean, I did that at the beginning of my career, events and cold calling, and it's not that effective, but sometimes you have to start with something, you know, when you have no connections, and I had no connections. I was an immigrant in New York that I didn't know anybody in the US. But what's most effective is actually building strong, trusted relationship with peers, with other founders.

who get to know you, get to know your ideas, your values, your capacity, and then the other founders will introduce you to the investors they know. That's the best way that you can get access to an investor. If another founder that they respect speaks highly of you and introduce you, that's the best way to get connected to investors. But you have to invest in their relationships, and it has to be genuine. Again.

You shouldn't go out and network and make friends because you want to introduce investors. It's good to build a network of peers from whom you can learn and to whom you're going to help and be helped out over the years. Kind of like a network of alliances. I have a network of allies, other founders that we help each other out. if I know that if I ever need help, they're going to help me. And if they need help, I'm to help them.

And then one of the forms of help is introduction to an investor, but it's about a lifelong partnership of people who share values and visions.

Rog How (35:33)

Amazing. Great advice. California, you live here, I live here. Do you think that it's important that all founders should consider spending some time here? is that important to if you're interested in scaling your business?

Diego Saez Gil (35:51)

I'm a huge fan of California. I love this land. And I think it's so special. It's not just about the critical mass of investors and founders. It's also about, there's something about the culture. The culture of California is one of where big ideas are welcome. Where you can go to

to anybody and tell a big idea, an ambitious, crazy idea. And people will be like, wow, that's so cool. How can I help you? Whereas almost anywhere else in the world, people will be like, man, that's kind of crazy. Or like, yeah, that's been tried before. Or like, yeah, but we don't do this here, right? In California, everything is possible, right? And then the second aspect of the culture is the willingness to help, right? The, you know,

unspoken agreement that we are here to help each other out, make these big ideas happen, right? And that's very special. Now, that being said, I am a believer that you can create amazing things from anywhere in the world, especially now in this new world of distributed companies, where you can hire people around the world, and you can start companies around the world, and you can be even a nomadic

you know, professional, you know, living in some time in a place and sometimes in another place.

And at the same time, California is the best place in the world for creating, you know, new things.

Rog How (37:36)

Well, thank you so much, Diego, for all of those valuable nuggets. We've been following you, obviously, for a long time, and I'd encourage everyone else to do so and track the progress that you guys are making at Pachama. And yeah, thank you so much for your time and sharing all of your value with our listeners.

Diego Saez Gil (37:58)

Thank you, Rog, and thank you for having me.

Rog How (38:01)

Thank you.

Diego Saez Gil (38:02)

Take care, bye bye. So I know if you want to.