Casey Handmer - Founder of Terraform Industries

Welcome to another Founder Wisdom Podcast. We have Casey Handmer with us today. Casey is the founder at Terraform Industries. It's cheap natural gas from cheap solar in Pasadena, California. Casey, welcome to the pod. Tell us a bit more about yourself, what you've been up to.

Hi, it's great to be here. Thank you for having me. I've somehow spent the last 5 years of my life trying to break the the geological monopoly on oil production. Oil is, you know, we talk about the Bronze Age and the Copper Age and the Iron Age and so on. We're in the oil age right now. Humanity consumes about 100 million barrels of oil per day, almost all of it transported over long distances because oil's fairly concentrated in terms of its natural provenance. And a couple of years ago, I kind of noticed that solar was getting cheap enough that we might soon be able to do the profoundly energetically ridiculous, kind of entropically prohibitive thing of driving combustion backwards and taking CO2 and water out of the air and turning it back into its precursor fuels, and then plugging that into the existing fuel distribution system. And as of today, we have nearly 30 people and functioning prototypes, and we've got a test site out in the desert with 1.8 megawatts of solar up and running. And we've made hydrogen out there, made CO2 out there, We've made— we're not ready to announce that yet, but some other stuff out there. And then here in our workshop, we're also fairly routinely producing methane and methanol, and we'll be doing ammonia soon as well. So it's all happening. It took a lot longer than I thought maybe, but we got here in the end. And just kind of looking ahead, looking obviously to hire great people and encourage other people to jump in and try really ambitious projects. And to push towards major amounts of revenue and ultimately net value production.

I love it, dude. You're a pretty wild man also, right? Like, who are you before that company? You have a PhD, you're a diver, you're a pilot, you hitchhiked to Magadan, wherever that is. How was this brain of yours shaped?

I don't know. As a child, I thought I was pretty strange. And then in my 20s, I convinced myself that I was mostly normal. And then I had children myself and realized, no, I'm very strange. But I think I've always had this kind of deep, kind of burning fire to go out and try weird things and prove things for myself and test assumptions and stuff. So academically, I just kind of did a aggressive hill climb and found my way to the Caltech Astrophysics, theoretical astrophysics graduate school and completed a PhD there, locked down a wife, and then kind of went into industry where I worked on magnetic levitation for a while. I went to NASA for about 4 years, which overlapped with COVID and starting a family, and worked there on mostly radar and GPS stuff and a few other things.

And then Yeah.

And then kind of proceeded from there to realize that there was this feature of the future that I thought should exist. If you think about the Jetsons' future, the good future, right? It's not a future where people worry about gas prices. And there's a future that should exist. No one else seemed to be building it. And so kind of until someone better came along, I'd better take a crack at it. And here we are.

You were born in a family of doctors, like medicinal doctors, some of them involved in math and physics too. So like your whole life you've been around science, right?

Not quite. I have a grandfather and an uncle and now my brother, my younger brother are surgeons. But most of the rest of our family were professionals of one flavor or another. And then I'm the first quote unquote hard sciences scientist in my family.

And then, um, I think you spent some time— yeah, let's see here— Hyperloop, right? NASA. I see a bunch of rocket launch on your, your profile. So, uh, what's actually, uh, prompted you to launch your own company? Because you're having so much fun at these companies, right? Uh, what, what was like going on in your head in 2021 when launching Terraform?

I think by that point, I'd essentially done what I'd gone to NASA to do, and I was looking for the next thing. And I had a strong clue that it would involve starting my own company because all of my best friends and the people I looked up to were entrepreneurs, some of them venture funded and some of them lifestyle LLCs or creatives or whatever, basically running their own thing. And so I was kind of looking in that direction and and realized the time was right to make the jump. It's like having a kid. There's never a perfect time. It's just the sooner you start, the longer you have to work on it. And took a crack at it. But yeah, I think at both Hyperloop, which was a startup, tech startup, and at NASA, which is the opposite of a startup, I was in many ways quite professionally frustrated for reasons that are now abundantly clear to me, having spent the better part of 4 or 5 years running running my own show and interviewing hundreds and hundreds of candidates and doing performance reviews and performance management and so on. There's just kind of this other half of the problem that I had no visibility or insight into as a peon at one of these companies or one of these organizations, which is to say, how do you build the socket that someone like me would plug into? Anyway, so I have a little bit more insight into that now.

What happened at Hyperloop? Was it a sound project from the get-go? Why didn't it go anywhere?

I think Hyperloop, I see it as a very noble failure. It gave me a newfound appreciation for aviation. I've always been a train nerd. I'm telling you myself a bit there. And we had a really extraordinary team there of really special, talented engineers solving dozens and dozens of problems that would've otherwise caused it to not work at all in really, really, really extraordinary way. Just an incredible team. And what a privilege for me to kind of tumble out the back of grad school and get to go and work on something like that and build the foundation of my career and my personal wealth and begin the process of becoming an American citizen as well. So I really, I don't have enough nice things to say about it. On the other hand, The Hyperloop concept has kind of, it's got a fundamental flaw that is very subtle. And, but actually, once you learn to see flaws like that, you start to see them all over the place and you say, well, why is it the case that we can't just blah, do a particular thing, whatever it may be? And it turns out that usually it's because there's a fairly subtle reason why it doesn't work. Plenty of people have tried and it doesn't work. So in the case of Hyperloop, People say, well, we would like to go faster close to the ground so we don't have to spend as much money. We want trains, but high-speed trains, but even higher-speed trains. And it turns out that the faster you go, the more the bumps hurt and the more the curves hurt in terms of forces that are put into the passengers. And so you end up driving a requirement for essentially like the smoothness or the straightness of your track. And it goes up at least quadratically in some cases, and in some cases more like to the power of 5. Which is, it just becomes energetically prohibitive, right? You start looking at this thing and what it would take to get passengers from point A to point B in a certain amount of time. And you start to say, well, goddamn, a 737 is starting to look really, really good. Yeah. And how does 737 solve that problem? It goes up in the stratosphere where there are no mountains, right? And it can just go in a straight line. And actually, even when it slows down to land, so 737 lands at about 150 knots. It flies much faster up high. Even then, as it's turning around to land, it uses up half a city to turn around and come into land. And it's not like ducking and weaving between trees and over hills and around canyons and through mountain ranges and stuff. It's up close, the track of a large aircraft is extremely boring, which is good.

And looking at Your CV, I would've expected a guy like you to build, I don't know, a drone or some kind of space rocket, right? Like, why did you decide to go in gas?

Yeah, I mean, as far as space stuff goes, I've always been a huge nerd and a huge fan, but have no special talent or knowledge, at least not then. I think, well, with Terraform, like someday we'll have to go and do synthetic hydrocarbon supply chain on other planets, but for now, The market is on Earth. The demand is on Earth, 100 million barrels a day. And I did actually do a bit of work on drones. So back in 2018, I had a fairly half-hearted attempt at the drone speed record. And I successfully built a racing drone that would do about 150 or 200 miles an hour, which at the time was not all that difficult to achieve for an amateur kind of first try, but it was significantly more performant than any of the drones you can buy out of a a toy box at Walmart or something like that. And of course, there's a very steep learning curve for such things. And I think in retrospect, if I'd continued pushing that direction, I would've found myself in a very interesting position come with the invasion of Ukraine. But I know the people who are operating in that space now, and they just have a level of talent so far beyond what I can imagine. I'm really glad they're doing it. And I think the other thing is that if you're a kind of an oddball entrepreneur trying to figure out where to start, It helps to identify a potential idea or area where it's not too obvious, because if it's obvious, the market will have no difficulty allocating capital and talent towards solving that problem. But if it's not obvious, then there's a decent chance that you'll get a crack at working on a problem where you won't immediately be lapped by other people who know what they're doing. And in particular, yeah, my future includes wildly capable quadcopters and drones and robots and things. But everyone else sees that too, and they're putting money towards it. So that's going to occur. Whereas the future I see where people don't have to worry about the price of gasoline at the pump is not a future that very many other people are actively building towards. And so that seems like a worthy sink for my efforts.

What does a day in your odd life look like? And do you surround yourself with other very odd people? And if so, how do you do that?

I certainly attract them. Well, so first of all, I pay some of them. So actually one of the wonderful things about starting a company is you get to direct capital towards identifying, recruiting, and then developing extraordinary talent. And people seem to think that really talented engineers grow on trees. And at the same time, they're like, well, I don't want to hire the engineer unless they've survived 3 years at SpaceX. Well, 3 years at SpaceX is—

Dude.

Basically, it's the equivalent of what a really good technical degree might have been 50 years ago or something, right? It's unfakable evidence that you can actually do something. And so at Terraform, we've really taken on board that we have a responsibility to take people where they are and then accelerate them basically up the career chain as fast as we can. And we know we've succeeded because we've had a few people poached recently, which is good, but we can always do more in that direction, especially with this kind of looming threat of AI, right? You need to figure out how to get on top of that faster than its capabilities grow, which is very, very difficult challenge at this point for anyone with a technical background. I spent years in school learning how to do integrals and Bessel functions and stuff, and I don't think I'll ever do one again, kind of thing. I think it was important in terms of training, like resistance training, lifting weights for my brain, but it's not something that's practically useful for me anymore because the computers just do it better. So that's part of that. And then I also write a blog and I recommend that everyone write a blog. And the blog is a great way for other people who think the way that I do or interested in the same sorts of things to find out about me and reach out and get in touch. Do I see them on a day-to-day basis? No, but we're in the same group chats and we're on the same part of Twitter and we talk to each other there. We help each other out where we can and we often catch up once or twice a year, which is nice. So that's pretty cool. But yeah, day in the life is, you know, get up in the morning, make my kids breakfast and lunch and drive them to school and then drive to work and kind of kick off the day's events and work my way through whatever needs to be solved any given day. They say entrepreneurship is you just drop a list of all the things you need to do to succeed. Every day and then you do them all. The problem is most people do 90% of them and think it's good enough. No, you need to actually, you start with the ones you really don't want to do and then it's, you get to run downhill the whole way. And then sometime in the afternoon, I'll usually kind of wrap up at work and hit the freeway to get back home and hopefully catch the family in time for dinner. And then, you know, clean up around the house.

Do you have passion on the weekend? Like the The art, the building stuff, the music, the aviation, the languages, the writing, is it mostly on weekends or it's like scheduled time?

I mean, that website dates from grad school. So, I mean, I haven't personally flown a plane now as pilot in command for many years. I'm intending to do it this year, but with many young children, you really have to think twice. It's a bit like riding a motorcycle. It's a lot of fun, but there is a non-trivial risk element. Yeah, I do stuff on the weekend. So on the weekend, it's typically activities and projects I can do with the kids, which is not all that limiting, right? The big ones are pretty big and the small ones are very helpful. And so we often do all kinds of stuff together. And then for the other projects, it's usually in the evenings when I should be asleep.

I'm looking at your travel map and I guess I had a question about Magadan and the map describes the trip, right? So Magadan is in Russia.

That's true. Yeah, because it's a Mercator projection, the kind of polar or like tundra exploration looks extremely impressive. But if you wrap that back onto a sphere, it's a relatively small area. Yeah, I mean, one of my mentors, kind of inspirations and later mentors, is a Russian zoologist who himself extensively documented his travel in in the Soviet Union when he was a young man and has since achieved the Russian dream and now lives in New Jersey. But he's just had the good sense to go out on adventures and then write it down and inspired me to go and try similar things, in part to try and answer the question of, how do I build a socket for myself to plug into? And so I went to Russia when I was a couple of weeks older than 19 and spent a few weeks there, maybe 3 or 4 weeks. I can't remember exactly. travelling around in winter and liked it enough to decide to go back. So I went back after I finished my undergraduate degree in summer and where it's, you know, the environment is a lot less hostile. And I spent almost that entire trip in the Russian Far East and I ultimately made it as far as Kamchatka actually. And I'm glad I did because for geopolitical reasons and also like I'm just older now, I don't think I would set out to do that kind of thing anymore. But I'm glad I did it when I had the chance. I think there's a lesson in that. I think if the opportunities align, you should try and say yes, even if it seems ridiculous or outlandish.

And it seems the education of your kid is quite important nowadays. How do you educate them?

That's a good question. Sorry. Okay, never mind. How do I educate my children? My children go to school. And then at home we talk about stuff and we have, obviously, my wife and I are giant nerds and we have many books and computers and an interesting intellectual life in the home as well. But yeah, it's an area of concern for me, in part because my children have evidenced or evinced a level of aptitude that is probably not going to be that well catered for in any schooling environment. It's just kind of the nature of the beast. And it's something that my wife and I had to deal with in the 1990s and with the tools available at our disposal at the time as well. This is probably a fairly common problem for people who are listening to this podcast. Yeah. So basically my intention is to keep the children in school for as long as they can handle it because they're gaining other important aspects of childhood by hanging out with kids their own age and You know, playing in the playground and and all that kind of fun stuff.

You think brains like yours can be designed? Because it seems to me, I don't know, dude. You're obviously like polymath or sort of on the spectrum. Like I've rarely seen a guy with that much accomplishments and in so many fields like you you did. You said your family, yeah, some professionals, right? Your education was like normal, right? So do you think you can design a kid to be naturally curious and yeah, free-flowing like you are?

Well, so there's 2 answers to that question. So first of all, my parents put quite a lot of effort into my education, for which I'm thankful, as did many of my teachers. I think all children are naturally curious, and at some point we train them not to be. I think that the vast majority of people would probably not enjoy the same level of natural aptitude for mathematics that I have, but I actually think that's less relevant now than ever. with both improved pedagogical tools and AI basically able to do some of that stuff for people. And I think it gives people the opportunity to kind of really focus on creativity and exploration and stuff like that. And then who knows, maybe in 100 years we'll have gene therapies and stuff that mean that particularly for the people who are kind of at the other end of the spectrum, they don't have to endure lives and the privations that necessarily come with struggling to interact with modern life, and also for the very old, right? The people who's kind of enduring some level of intellectual impairment as a result of age, which will come for us all soon enough. So I'm cautiously optimistic on that front. But I don't think that your average kid needs to basically validate my mistakes by repeating them, either in terms of my education or my experiences, just in order to validate themselves or something. Like, I took my own path and I don't regret it, but in retrospect, it was pretty strange.

Terraform, the website is like, I don't know how to describe it, but it seems you're still in stealth. You raised some money, obviously.

We have a blog with like dozens and dozens of blogs about what we're doing.

But why is the website that mysterious? Because I'm looking at your Twitter, I see the invention. Oh, it's fucking clear what you're building, but the website is like this mysterious piece of whatever. It's like it's actually a hiring base. Yeah, it's for hiring mostly, right? Is that the purpose? So can you describe like—

I can tell you the honest answer, but well, I'll be really blunt, right? So basically Terraform's business model is not that different to Costco, okay? Costco is no frills, right? Costco, when you go to Costco, you're not Oops, we just leaked something exciting. When you go to Costco, that's— is that our website? I don't even know what that is.

No, that's your Twitter. And that's what you're building. My brain is like, oh, okay, that's what.

That's old now. That's like 3 years old. If you go to— I don't use our X feed very much, the Terraform X feed very much.

And there's the website.

Costco, there's a website. Yeah. You're not paying for fancy advertising, right? You're not paying for complicated stuff at Costco. You're paying for a great product at a great price, and that's all.

Yes.

And that's kind of the same thing. Like, I aspire to make gasoline, and I want to produce gasoline for $2 a gallon and sell it to consumers for $2.20 a gallon and take a 10% margin on it. Right. And then just make a shitload of money by making trillions of gallons of gasoline. Right. And so it's a very no-frills idea there. The other reason is that one of my compatriots in the kind of synthetic fuel space founded a company called Prometheus, and they're still around. They're still working on something. They have a different tech stack, a different approach, but their website, at least previously, was absolutely exquisite and extraordinary, just this absolute work of art. And I thought, like, I couldn't, even if I wanted to replicate that, maybe I could with AI now, I don't know. So I think I'll just kind of go and stake out a corner of what the internet looked like when I was a kid and what it should still look like before Marc Andreessen made the mistake of inventing the image tag, ruining all our lives. And yes, I've said that to him before. He knows what I think about it. So that's part of the fun. Yeah, I just kind of like it. Every now and then someone says, is this a joke? And I'm like, kind of, sort of. You can, you can click through a link and find a, find a YouTube video if you really want.

It makes all kinds of sense.

It loads extremely quickly.

If your ICP is on the spectrum, it makes all kinds of sense.

Weaponized autism is what we're trying to attract here.

There you go. Dude, I'd love to have you on a round 2 to deeply explore the model because obviously like 30 minutes won't do it justice. But how do you hope to achieve that? Is it through the machine that I saw? Like, what's the the model to this? How do you hope to create petroleum way cheaper?

I mean, the key thing is that it's an energy product, right? And so if you start off with an energy source, in this case solar, which is cheap enough, and then you convert it from electricity into chemical fuel efficiently enough, which is mostly about capital efficiency actually, it's not about electrical efficiency because the electricity is really cheap. Then you can produce a product that's cheaper than traipsing out to the 4 corners of the earth with a drill rig and drilling holes into rocks and hoping for the best. And what helps us in that mission is that solar is getting cheaper every year and drilling is getting more expensive every year. So it's only really a matter of time. And I think our beachhead product's already in the money, right? We're already able to produce products for less than we make in selling them, but at rather small volume. And I think by 2029, it'll become extremely clear that this works at scale, essentially arbitrarily large scale, not just for some somewhat more niche beachhead products. And it's one of these things where it's completely unobvious until the incident is obvious, and then everyone's like, oh yeah, obviously this is true. So we're almost there.

But help me understand the transition from solar electricity to gas. So your machine converts, makes gas out of nowhere. How does that work?

Yeah. Well, so natural gas is, and we make methanol as well, but basically it's made of carbon and hydrogen. That's hydrocarbons. And then a bit of oxygen in the case of methanol. And so you're, it's basically the same chemicals that trees and plants are made of. And trees and plants face the same problem, which is they need precursors in order to grow. And so they get the CO2 out of the air the same way we do, and they get the water out of the ground from rain, which also comes out of the air. the same way we do. Of course, we bring water in with a pipe and we are able to capture the CO2 with some chemistry that is not compatible with life. So we're able to do it about 50 or 100 times more efficiently than a plant, or more productively than a plant, but it's the same basic idea. If you go and eat a plant or you look at a tree, it's made of condensed air. Its mass came out of the air. We just effectively capture and make that fuel way faster. So we've got CO2, we've got hydrogen, We make hydrogen out of water with power, and then we combine hydrogen and CO2. It's a catalysis reaction that was discovered in 1896. It's been around for a while. It's 130 years old. Effectively, the hydrogen is burnt with the CO2 as the oxidizer, which is messed up, but there you go. The products are water and methane, and you condense out the water and you've got methane. The nice thing about it is It's not coming out of the ground, so it's not contaminated with all the same rubbish that you find in the ground. And so just for example, we're still— it's very early days, right? We're still building prototypes really. And our latest methane prototype produced chemically pure methane. So it's actually about 10 times less contaminants than pipeline-grade natural gas. And that's— I feel like we tried hard, but in the grand scheme of capitalism, we haven't tried that hard. It's a very small company at this point.

Right. Because you have to prove that it works. What do you need to hyperscale? Is this just capital or?

I mean, capital, yeah, but the limiting reagent is human capital, is people, which is why I started off the show with saying we're hiring. So if you're interested in this sort of thing and you want to develop your career, essentially masterclass in the most rigorous chemical and mechanical engineering, electrical engineering that humanity currently has to offer in a small-scale startup with lots of opportunity and exciting problems to solve, then I don't know of a better company than Terraform.

I love it. Let's finish round 1 with this. We're going to do round 2 because I'm deeply fascinated. You're like a magician. That's how I described you. Where can people find out more about you, Casey?

Well, me personally, I have a website and you can find me on Twitter. On X. And then for the company, we have terraformindustries.com and we have a blog at blog.terraformindustries.com that has photos and videos and more detail and font you can read without your eyes bleeding. So whatever you want, we can cater to it.

Love it. That was Casey and Charles for another Founder