Listen to the podcast episode here, or read the transcript below for “Passion Meets Purpose: ClimateTech Entrepreneur Protects Food, Health and Planet,” with guest Manik Suri, founder of Therma.
Kelly Scanlon
Welcome to Talking Business Now. I’m your host Kelly Scanlon. Thank you for joining us.
We’re Talking Business Now with Manik Suri, the founder and CEO of technology startup Therma. Therma is a mission-driven business that builds tools that companies can use to eliminate food waste, create energy efficiencies, and reduce refrigerant emissions. In addition to his entrepreneurial ventures, Manik served as an economic policy advisor at the White House National Economic Council during the Obama administration. In this episode of Talking Business Now, Manik talks with us about the ways in which companies, large and small, can adopt tools and processes that are better for our planet and also help the companies themselves create efficiencies and become more sustainable. Welcome, Manik.
Manik Suri
Thank you so much. It’s a pleasure to be here, Kelly.
Kelly Scanlon
Therma—this latest company focuses on creating tools that help companies fight climate change. What industries in particular do you focus on?
Manik Suri
We are focused heavily around the refrigeration supply chain, or what’s called the cold chain. So, the tools we build help businesses that have a lot of refrigeration and refrigerated products reduce waste of energy, product, and refrigerants, all of which are big drivers of emissions. Those tend to be industries that cluster around perishables. We think of it primarily as food, and pharma, or healthcare more broadly. So, most of our customers are somewhere in the food supply chain or, in some cases, in the healthcare supply chain.
Kelly Scanlon
It just spans the entire lifecycle it sounds like—from when it’s being transported, when it’s being stored, when you open the cold cases in the grocery store that are storing food for the shoppers. So, you know, up and down the line. There’s all kinds of points where you would interact with these companies. Give us an example of some of the tools that Therma produces and how they help with reducing emissions and costs.
Manik Suri
I’ll use an example that hopefully it resonates for many of us. In the summer months, many of our restaurant customers notice that they have power-related issues. They’ve got brownouts; in some cases, blackouts. Energy grid failures occur, you know, because of, you know, demand as well as capacity constraints. And we’ve seen a whole range of weather events as well the last few years across North America. Some of those events lead to stores being closed suddenly, or equipment malfunctions, or stores being lightly staffed. And what ends up happening is you’ve got huge amounts of inventory sitting in restaurants, or C stores.
And many times, either an equipment malfunction or a power issue, or, you know, a human oversight leads to that piece of equipment either being unplugged or left unmonitored. Or, in some cases, coolant leaks and energy failures caused the perishables to degrade or completely get spoiled. That can lead to a loss event of $1,000 or $100,000, depending on the size of the box and the kind of inventory it stores.
We’re trying to eliminate those loss events by providing a 24/7 alarm, essentially a way of monitoring your inventory in the refrigeration that holds it, using sensors. And that’s our flagship product, a sensor-based monitoring solution. The sensors are IoT or internet of things, that are devices that are about the size of a deck of cards. You drop them in place inside a piece of refrigeration—a walk-in fridge, freezer display case, lowboy. They create an ambient, or they take an ambient reading of temperature and humidity and provide essentially 24/7 visibility into what’s going on across those refrigerated assets. So, if you do have a spike, or a downtime event, we could provide an early warning system that helps managers and store-level team members respond quickly and, in some cases, save hundreds or even thousands of dollars.
But really the goal is to help monitor these assets and the inventory within them to reduce both the waste of the product and the spoilage and also to help optimize energy spend. And we can do that by helping them as owner-operators see where they might be overheating or overcooling.
Kelly Scanlon
Let’s dive down a little bit deeper. We’ve learned how the sensors that you produce and manufacture, how they can help the food industry keep products at optimal temperature so that they are reducing energy waste and reducing emissions. What are some of the other ways that the food—and you also talk about the tech industry—not just food, but food and tech industry can make an impact on the climate community?
Manik Suri
There’s a lot of waste in the supply chain. The Boston Consulting Group had a report that came out a couple of years ago that spoke to the scale of the food waste problem, and they describe it as a 1.6 billion ton a year food waste problem. That’s roughly $1.2 trillion worth of food that are thrown out or wasted each year. That’s each year. And so, you know, we think of that as kind of low-hanging fruit in some ways. There’s no pun intended. But the food waste problem is so large that Project Drawdown, which studies climate change, said food waste, if it were a country, would be the third largest emitter, after the US and China. I mean, it’s a huge driver of warming—and we’re trying to make a small dent in that.
Another big source of warming is the kinds of products we consume, and changing and shifting consumer preferences around those. That’s very hard. That’s obviously not an easy thing to do. And, you know, it’s always a multigenerational question about how diets and how consumers change what they consume. But it’s clear that if the world continues to grow at the rate that population growth is happening, and countries around the world start to consume products the way we do, that’s going to be very hard to sustain. Now, if everyone ate, the same kind of diet that we do here in America it would be very hard to feed the world sustainably.
So we have to figure out ways to solve for that. We know there’s a lot of data out there on alternatives and kind of new forms of, you know, more sustainable production, more sustainable product itself, a bunch of companies working on those areas, and of course, a lot of advocacy going on around sustainable farming, sustainable fishing. But I think food as a sector, it’s often hard to think about how large it is. It’s one of the pillars of the global economy, a multi-trillion dollar industry touches that all of us. So, I think it’s actually very much at the heart of a lot of the opportunity in climate.
Kelly Scanlon
A lot of times companies look at options for sustainability, for climate change, and so forth and say, “It’s ridiculous. It’s going to cost too much. This is just not something that’s practical.” How would you address that?
Manik Suri
It’s a very real concern. If there isn’t a business case, or ROI associated, and if it costs, you know, meaningful dollars can be very hard to get that kind of innovation or that change over the line, especially in a world and in a market where there’s a lot of headwinds in many sectors, particularly sectors that we spend a lot of time in. The COVID-19 pandemic deeply impacted a lot of businesses—affected the cost structure, affected profitability, and has made some of those decisions much harder to make without a business case.
And so I think one way of addressing that concern is to find solutions that improve profitability, that improve growth and have a positive impact on social challenges like climate. I think of it as a social challenge, something that affects all of us in society.
So, for us and for entrepreneurs out there, I would say try and marry profitability and sustainability. If you can find ways of doing that, building tools or creating solutions that save businesses money, or make them money, and have positive impact on emissions reduction, then you have a real win. And that’s, I think, the best way to achieve impact, at least in the world of technology and product-driven innovation. It’s very different for regulators and policymakers. But in the business world, you know, you’ve got to tie it to the bottom line.
Kelly Scanlon
Yeah, you just set me up nicely for the next question. You mentioned policymakers. You also co-founded the Governance Lab. And that’s an Innovation Center at NYU that developed technology solutions to help improve government. And then you worked on another company concept that was called CoInspect. What inspired you to start Therma a few years ago? I mean, moving into the climatetech space is a bit of a pivot when you consider the government lab that you were involved with.
Manik Suri
Absolutely, I think it was—my dad likes to say “life makes sense in the rearview mirror,” you know, you don’t necessarily know where the journey is taking you. But then when you look back at all kind of the path kind of becomes clear as to how you got to where you are. Another one of my favorite sayings these days is “the older I get the wiser my dad seems.”
Kelly Scanlon
That’s true. Yes.
Manik Suri
So I think when I got started working on the Governance Lab, or GovLab, I was finishing up law school at Harvard, and I’d met Beth Noveck, the former deputy chief technology officer of the US. She was the deputy CTO in the first Obama White House and was this really impressive, really inspiring thinker-doer. And she had written a book called “Wiki Government—Wiki Gov—about how network and data technologies were transforming social and commercial life, how we dine and we date, how we engage in everyday activity. But law and government—two of the largest sectors in the economy—were still run like it’s 1950. And there was an opportunity there to bring technology into those sectors. And that was really a moment of inspiration for me.
When Beth left government, I joined her to co-found the GovLab. And we worked at the GovLab on building innovation and spurring innovation around governance workflows, government and governance workflows. And I focused a lot on problems around compliance and regulation. That was an area I had a little bit of exposure to in law school. I did a housing law clinic building cases, going around the city of Boston and watching inspectors do field visits and site visits and inspect stuff using clipboards and carrying around binders of legal codes. And it just seemed like that was a really antiquated way.
Kelly Scanlon
I was gonna, I was gonna use the word archaic?
Manik Suri
Yes, absolutely. So we thought we could build mobile technologies, using the latest and greatest mobile devices, smart tablets, and phones, to collect that data more accurately and to use structured databases on the back end to structure the code. So you can pull up violations, pull up actions and items without having to refer to, you know, dozens and dozens of manuals, and hundreds of pages. And the idea was to make that more accurate, more efficient, and create a place where both businesses who were doing the compliance work and government, which was doing the enforcement work, could kind of meet.
That was the concept behind CoInspect—collaborative inspect—the first product we built. And so I left GovLab to start CoInspect as a for-profit venture with support from Beth and with the idea that we would actually build a product and sell it as opposed to just provide a convening ground, which is what GovLab was, for people to talk and work on these problems.
Kelly Scanlon
Right. Right. You were actually going to take some of the concepts coming out of that and apply them in the private sector through CoInspect.
Manik Suri
Exactly. It was, you know, I think the GovLab was a great innovation ground and still is a great convening ground, but I wanted to kind of get my hands dirty just building and actually seeing if we can bring a product into the world.
And building CoInspect, the timing was such that we got started in the same year that Chipolte had a series of food safety crisis, food safety issues, back in 2015 and early 16, which you might remember and listeners might remember. And I had no background in food or food safety, but what we discovered was a number of businesses started reaching out to us saying, “Hey, we heard about your CoInspect compliance tool. Can we use it for food safety and quality assurance? We really want to improve our safety protocols. We want to try to avoid these kind of brand risks. And we’re using pen and paper.”
And we discovered that the food industry was massive. And there was a ton of pen and paper and archaic—to use your word, Kelly—workflow tools out there, not a lot of structured data and not a lot of mobile first. And so that’s what led us into food. That’s how we kind of started working in the food supply chain.
Fast forwarding three years later, as we were building and selling CoInspect, we were in about 5,000 locations, restaurants and convenience stores and food manufacturers, we discovered that a key part of the food safety challenge is around the temperature holding conditions for the food. Keeping the food in the right temperature takes you into refrigeration and managing the refrigeration.
And as we started to learn more about refrigeration, we thought we were approaching it from a safety and health standpoint. That was where CoInspect had been focused. We discovered that there was a ton of waste going on. It wasn’t just a safety issue. They were throwing out huge amounts of inventory because of loss events. And they were spending a lot of money on refrigeration management. And so we started to—and the energy electricity spend around that—we started to work on a second product, which we called, you know, internally, there’s an acronym around it: Temperature, Humidity, Energy, Remote Monitoring Application, or Therma.
Kelly Scanlon
That’s how you got the name.
Manik Suri
And so we thought it was gonna be a product to help improve safety and health around products by helping businesses manage their refrigerated inventory. And as we started talking to our customer base, the CoInspect customers, we discovered that there were these huge other issues around storing product carefully and accurately: food waste, energy waste, and then the third—which was a total surprise for me—was refrigerant.
Refrigerants are the greenhouse gases that go into refrigeration units to keep stuff cold. They essentially create the cooling effect. And it turns out these refrigerants get emitted when refrigeration goes down at the end of life. And so there are opportunities in monitoring the refrigerated assets to not just improve safety, but also reduce food waste and energy waste and potentially refrigerant waste.
That was kind of a whole series of learnings in 2019. That is when my co-founder, Aaron, and I started realizing we are actually working on a climate problem and not just a compliance problem. And that’s how we kind of started to morph into and started to embrace this new mission around building smart cold chain.
Kelly Scanlon
I talked to so many entrepreneurs who have the same kind of revelation that you did. They get started working on one thing, and then as they do their research or as they start taking it to market and hearing feedback from consumers, or whoever it might be, they realize that they really should be playing over here, or that it has applications on a whole other level that they didn’t initially realize.
So often, innovators come in with a product with a concept. They’re still trying to prove the concept in the real world. And they get met with skepticism by folks who, you know, “What I’m doing now is fine. Yeah, I got some food loss, but that means I’m gonna have to overhaul my whole system. And so I’m just gonna deal with it the way I’m dealing with it.” Did you encounter that kind of thing? And did you have to spend a lot of time educating your clients?
Manik Suri
Absolutely. I think there’s, there’s so many moments, I think, where as an entrepreneur, I’ve gotten advice or feedback or skepticism about, you know, “Are you really working on the right thing? Is this really a problem? Are you sure this is the way you want to spend your time?”
It definitely is the hardest thing I’ve ever done No question, the hardest thing. I think as a person who cares a lot about making an impact, but also solving problems that matter, I’ve often wondered if safety and compliance and then later food waste, and now kind of the climate challenge, if this is the right way. There’s been many moments. But I think what’s been really encouraging and really validating, Kelly, is seeing the case studies, seeing the stories, and talking to users and customers afterwards and realizing, “Oh, we’ve helped avoid a huge loss event there or a dozen safety issues here or improved the energy spend in this distribution center or saved managers hours not having to clean up a giant hazmat issue after a spoilage event.”
Just a whole bunch of stories, and I think data points that have started to emerge in the last year as we put the product in the market and as we started to get more commercial traction.
And we’re working with companies that are major national brands—companies like McDonald’s and Taco Bell and Burger King and 7-Eleven and Marriott Hotels. And so these are sophisticated businesses. They’re not trying to waste time on products that don’t solve problems.
I think the educational curve has often been around helping owner-operators who are not always at the store or location realize that there are a lot of failures, a lot of loss events that are preventable, and that the frequency of those preventable events is much higher than they might think. The combination of power issues, equipment issues, and human errors—all three of those—lead to quite a bit of preventable loss at the store level or location level. That doesn’t always filter up to management and to corporate. And so I think there’s often a little bit of skepticism: “Is this really a problem? Or how much of a problem is it?”
Kelly Scanlon
Exactly.
Manik Suri
The best way to show—the best way we’ve done to kind of make that case—is to kind of put a few sensors into few locations and let them see the data. And usually that’s pretty convincing. They realize, “Oh, wow. We’re having all kinds of spikes, all kinds of potential issues.” And that usually starts getting people pretty excited.
Kelly Scanlon
What are some of the technologies that you see coming down the line that you’re pretty excited about that are going to be able to help you improve your tools, and then that means that your customers will see improvements as well?
Manik Suri
Yeah, I think there’s several really significant technology stacks or technology areas of rapid innovation that are going to transform both the food industry and hopefully, more broadly, supply chains. I think one of those is kind of the general push into data and applying new data methodologies.
Machine learning is often talked about these days as a way to use computer algorithms to automate insights and to use a combination of experiential data tagged and identify patterns in that data to then train a machine to start identifying those patterns more accurately and more efficiently. And so we’re seeing that, for instance, with the historical data that we’re collecting now.
We’re able to start using human analysts to start identifying patterns and train the machine, so to speak, to start identifying those patterns. Those patterns might be a spike in temperature in the middle of the night because of the delivery crew coming in and leaving a door open for two hours instead of shutting it regularly. Could be a piece of equipment that’s being overworked and pulling energy or that needs to be repaired or replaced. We can see that in the data. Could be a piece of equipment that needs to be—the coolant refrigerant is leaking and needs to be refilled.
So I think ML—machine learning—and related algorithmic approaches to the use of data are going to continue to emerge. And I think we’re gonna see the use of data proliferate. That’s why some of the companies that are the most valuable businesses on the planet are at their heart data companies today.
And I think we’re also going to see a lot more automation. And we obviously spend time thinking about one small portion of that automation, which is the connectivity around the internet of things. I think we’re gonna see a combination of both the connectivity layer—that’s the sensors and the gateways that power them. We’re seeing a huge growth in IoT and sensors around the world across many sectors, from agriculture to supply chain and logistics to healthcare and consumer home products. Many people have IoT devices in their homes today, and they don’t even think about them.
Kelly Scanlon
Right?
Manik Suri
Ring or Nest, or pick your favorite home smart product.
I think that the last thing I would say is, I think we’re gonna see a shift towards, hopefully, a shift towards technologies that make for more efficient production. And I think you’ll see that coming out of pharma, as well as biology, as well as agriculture, particularly in food—in the way in which food gets made and food gets distributed. We’re already seeing that with companies doing stuff around, for example, meat, protein alternatives and a whole bunch of innovation happening with plant-based and other types of alternatives. But, yeah, I think all of those are technologies I would keep on my radar,
Kelly Scanlon
Do you have any concerns that as our food supply chain becomes more technology-driven with these new innovations that there’s any kind of concerns for security of it?
Manik Suri
Definitely, I think as a as the food supply chain, the food industry continues to adopt digital tools and goes increasingly—I’d say at least becomes more and more technology enabled—we’re going to see the same kinds of challenges that have happened in other industries that have gone from analog to digital.
I think there’s a general, if you think about an analog world, where you’ve got banks with vaults and very large doors and security guards and buttons under their, you know, manager’s desk. In all the bank robbery movies we watched and all that kind of stuff we watched as kids, that was all physical security built around an analog world. In a digital world, you’ve got to create the same perimeter defenses, the same multiple layers of screening, the same vault-like, fortress-like layers of protection in a digital world.
And so I think that’s true of every sector as the world goes from analog to increasingly digital, the same kinds of security that we had to build up over centuries, probably millennia, in the analog world have to quickly get built up in the digital world. So I do think security concerns in food supply, as much as in other critical parts of human health, you know, will continue to be a challenge. I think there’s a lot of effort being put into building those cyber defenses and cybersecurity features to try and catch up the digital world to where the analog world is.
Kelly Scanlon
As we wind up here today, what should our listeners be talking business now about, especially our listeners who are entrepreneurs or running their companies, or they’re in positions within a corporation where they’re making critical decisions? What should they be talking business now about in 2021?
Manik Suri
I really appreciate the question, Kelly. And I think this last year, for me was really one that kind of shook me and has made me think a lot about why I work in business, why I’m an entrepreneur. And I think I’m feeling today in 2021, a mixture of gratitude and purpose around trying to put my energy to work on solving problems that help businesses and help consumers, but really do it in ways that are tangible for problems that I care about, that my family and friends and community can benefit from.
So I think 2020 was such a terrible year in many ways, with a pandemic raging, with businesses struggling. The kinds of businesses we were selling to were deeply affected. And our business was deeply affected. We almost went out of business in April of 2020. We were down to a couple of weeks of runway at one point. And then we raised capital, we pivoted, and we were able to kind of expand this new product.
The whole year, I think, really kind of reflecting on it, has left me with the feeling of both gratitude and inspired purpose—trying to kind of make sure that the work matters. So I would say to all the entrepreneurs and all the folks out there that are change agents making, you know, making a difference, try and align that effort and the kind of daily grind, seven-days-a-week kind of grit to problems that you care about, that you think really matter for your friends, your family, your community—whether that’s your local food drive or the climate problem and challenge that our generation faces or the million other problems and challenges that we have out there. I guess that’s what I would say is worth talking about… Talking Business Now.
Kelly Scanlon
Yeah. Spend your time working on things that matter to you and the community. Absolutely. We wish you the best of luck, Manik.
Manik Suri
Thank you so much, Kelly. It’s a real pleasure to be here.
