Founder Stories: Scott Uknes, Co-Founder and Co-CEO of AgBiome

Well, welcome everyone. My name is Don Ort. I'm the acting director of the IGB, and I'd like to welcome everyone today's, today's edition of the Fox Family Lecture Series for Entrepreneurship and Innovation. This lecture series was established by Peter and Kim Fox, and it really helps the IGB to fulfill its mission in stimulating bioeconomic development, and specifically for the Foxes to help enhance economic development in Champaign County. I think we can say that through this lecture series, the IGB faculty and postdocs and students have really been inspired by speakers who've come with proven track records of success in the business of biological sciences. In addition, the Fox Fund has helped support other entrepreneurship training for students and postdocs in the IGB as well as across campus, and this continues today with the virtual visit of Scott Eugenis to our campus. Scott is the co-founder and co-CEO of Agribiome, and this is a company that focuses on the traits and biologicals for agriculture and particularly for pest control in agriculture. We actually first met Scott earlier this year at the Geneective ribbon-cutting at the research park, and we were really impressed with his knowledge and his clear thinking about the complex world of joint ventures. I should mention Scott has a, has a strong Illinois connection. He graduated from honors biology here at Illinois before going on to the University of Washington in St. Louis to do his PhD. And there he did his PhD with David Ho, again another Illinois connection. David Ho was here on the faculty in plant biology for a long time before joining the WashU faculty. So please join me in welcoming Scott back to Illinois to talk about the experiences that he has had in business. And for the audience, I'd like to mention that if you have questions, please send them to Elena Kamphor in the chat, and we'll ask them at the end of the seminar. So Scott, let me turn this over to you, and welcome virtually back to the University of Illinois.

Thank you so much, Don. It's really wonderful to be be back, if only virtually, and also to be introduced by you. It's an honor. I'm going to try to get the slides to advance here. So I'm going to start out with some very basic, you know, Greek philosophy stuff here. Let's define our terms. And I'm going to just use some definitions that I think are reasonably universal but not always accepted. And what is business? And I believe business is when a group of people come together to perform a purpose that is greater than whatever— what any one person could accomplish by themselves. And that purpose could be anything, and there's a list of topics here. It doesn't have to be an occupational thing or whatever. It could be about anything. That's the kind of opportunity that business has. But what the daily work of business is, is solving problems. It's— I think a lot of people that aren't involved in a business don't understand that it's just every day there's just another problem that you've got to deal with. I also want to talk to you a little bit about the leadership, management, and contributors. And I prefer the leadership management definitions from Deming, which, uh, what he says is leadership is doing the right things and management is doing the things right. And I think that encompasses a lot of ground and really kind of defines the way at least I look at stuff. Also, I'm going to use the terms complex versus complicated. If you have a handmade watch or a Ferrari, it's complicated, but every single thing going on in that object is understandable and predictable versus complex. Things like human beings are complex, and if you put 3 human beings in a room, you're going to get complex behaviors that you cannot possibly predict. Also, I'm going to briefly touch on some things like vision, strategy, and I didn't write it down here, but tactics. And my point here is that the term strategy and tactics often get misused and they get supplanted with each other. People like to use the word strategy where they really mean tactics. And when I was at Bayer CropScience, we had a strategy group that would go in and redefine the strategy of most businesses every year. And I will just point out that if you're redefining your strategy every year, it's not a strategy. Strategy is something longer term, and these are military terms, strategy and tactics. It's a strategy that the Allied forces wanted to invade Europe in order to take back the European continent from the Nazis. The tactical plan was D-Day. So, and that's an important distinction. So I'm gonna now segue and talk a little bit about my background. Sorry for the narcissism here, but I think this might be helpful for some of you. I grew up in a town called Cicero, Illinois, which is a near suburb of Chicago, and went to school at University of Illinois. Graduated high school from Schaumburg High, and it was a really crummy high school, and 80% of the students that graduated from there did not go on to college. And a counselor at the time told me that I shouldn't go to college because I wouldn't survive. And I think I finished 4th in my class at high school out of about 400 students, and the average reduction in grade point average going from Schaumburg High to University of Illinois was more than 1 grade point. So the first year for me was brutal, and courses that started for the first 2 weeks with what was considered to be a review, that material is all new for me. It was really hard. I got crummy grades. I got a couple B's, but mostly C's and D's. And I read about this program called Honors Biology. It wasn't called Integrated Biology. Back then it was just Honors Biology, and it was a building that you guys knocked down, probably good riddance. It was called Harker Hall. It was kind of right there on the, on the Main Street next to the, the Union, Student Union, and that's where we had our classes. And I, I talked my way into that program. I, I set up a meeting. I got a rejection letter. I set up a meeting with the the Dean of Acceptance, and he was a German scientist, and he wore a suit and tie to work back in the olden days, pretty old school. And we had an hour-long meeting that was probably scheduled for a half hour, and I just basically wouldn't leave his office until he said yes. And eventually he said yes, but he didn't say yes how you think he did. He told me I didn't deserve to be in the program, that I wasn't smart enough and I hadn't achieved enough and that he was going to teach me a lesson by letting me get into the program so I could flunk out. And I left, but I was in the program and I had fantastic time in this program. There were 28 students, 2 full professors, 2 TAs, and I can't tell you how, how grateful I am to the University of Illinois to allow me to be in that program. Had a fantastic first teacher named Fred Mines, best teacher I ever had. He could teach so quickly and so effectively. He used to use chalk on the chalkboard. He had about 5 to 7 different colors of chalk, and he could write faster than any other human being on the planet. And if you wanted to try to take notes in his class, you were going to fail the class. You had to pay attention and you had to learn right then and there. And that was a very powerful lesson for me in prioritization in terms of how to learn. My first lab course in that class took place on the first Friday. It was scheduled from noon till 5. We did a bacterial conjugation. I left that lab. I got there at noon. I left that lab class at midnight. From Harker Hall, and it was fantastic. And for a sophomore undergraduate to miss his beer on Friday night and still have a good time was probably telling about me. So I worked on a farm also in Ashcombe County. Jack Widom, who's pictured there above the Anna Gang March sign, and Ashcombe County is pictured there on the right-hand side of that. And just above that in the little red dot is where I grew up in Cicero. Quite a contrast. I also, in between undergrad and grad school, I took a job at Wheel and Sprocket in Milwaukee, Wisconsin, and pictured there is Chris Cagle, who I'm tremendously indebted to. He taught me a lot about life, taught me how to sell bicycles, but he taught me how to have fun. He taught me some basic human nature things. When you sell things like bicycles and skis, you don't sell by bicycles, and skis. You sell fun. That's what you sell. And you better make the experience fun for the customer coming in because that's why they're there. And I learned a tremendous amount about life from him, and he helped me mature as a human being. So after getting my degree from University of Illinois, I went to Washington University, and I worked with David Ho, who I also worked with at U of I. And while I was at U of I as an undergraduate, I published 4 papers, uh, not because I was so good, but because David was so good and so patient and so generous and so kind with me. And without David Ho, I wouldn't be a scientist. In grad school, we had a lot of interesting personalities. I did rotation in Maynard Olson's lab working on yeast genetics. Also with Doug Berg's lab working on TN5 transposition, and hung out a lot in the genetics department and really enjoyed talking a lot with Sakis Theologios, who's pictured here. And one of the bits of advice he gave us was to get out of grad school as quickly as possible. And his advice there was, if you know how to read a scientific paper, which means that you have to read 30 papers to read one scientific paper, and you're a good critical thinker, you need to start working for yourself instead of working for a PI. Then after graduating from grad school, I followed Eric Ward, who's my best friend in grad school, and we're pictured there in the bottom middle, uh, and joined him at Ciba-Geigy. And it's a big agricultural company which became Syngenta and had a really good time there also. I worked for a guy named John Riles, who's pictured in the lower right-hand side, and worked on a novel thing at the time called plant immunity. There was a variety of different kind of observations in the field done, but nobody had really characterized the molecular way in which plant immunity evolved. And John Riles and his team did a phenomenal job of really identifying some of the key features and especially identifying that salicylic acid is one of the key signal molecules in that whole process. The team that I led also did the very first field trial of disease-resistant GMO wheat in the UK, which I'm not sure you could do that now, but we did that. It was quite successful. It worked against Fusarium. And I got exposed to a big company culture, lots of bureaucracy, but absolutely wonderful, smart people that were super helpful and that taught me all kinds of ins and outs of the business. And one of the things I learned is the difference between being a contributor and managing people and understanding that I had to be different. I had to learn different skills, and I had to be able to adapt to what people needed from me in order to be able to be the best at their jobs. And I learned to ask a lot of questions, understand what the problems were, and try to really seek methods in different ways of looking at it so we can best address that. And during the process of doing this in my tenure there, we developed a product which is on the market, which is called Bion in Europe or Actiguard in the US. And And John's team, myself, and Eric, and several others really were instrumental in figuring out how that molecule worked. And it's a novel immune stimulator. So it works much like salicylic acid, but it's a more stable molecule that can be taken up into the plant easier and works better. Sorry, political call. So in doing all this stuff over the course of about 7 years, I started to get involved in a variety of different leadership roles, and I started to work with some people in the organization that I wasn't really happy about. And I started to look around for other things to do, and I really was a big fan of genomics, especially functional genomics. And I kind of realized that working in a big company like Sieberg-Geigy, or at the time Novartis because they had merged, was probably not going to be the best place to do that. And so in looking at that, I just said, hey, look, there's all these genes out there, everybody's sequencing everything, but how are we going to be able to figure out what these genes do? And so John Riles and I and Jorn Gahrlach and Sandy Stewart started a company called Paradigm Genetics aimed at trying to figure out what every gene in Arabidopsis or in other plants did. And There were other key employees in the company that were very early on, Doug Boyce, Matt Tanzer, Jeff Wessner. And we really tried to create like a factory where we could industrialize determining what the gene function was. We started the company on September 9th, 1997, with $6 million investment from— initiated and founded by Lord David Sainsbury. From the UK. We also very quickly got a deal with Bayer to do discovery of targets for herbicides, and with Monsanto to look at genes that could possibly be used to enhance yield. The company grew very rapidly. It was stupid rapidly, emphasis on the stupid. We grew to 220 people by May of 2000, and we took the company public in an IPO. Worst business trip of my life. Visited 77 investment firms over 15 business days worldwide. I don't think I've ever been as bored nor as tired in my whole life. But the company was public. After the company went public, we did some other stuff, but the company started to transition. John was the CEO. He wanted to become more of a pharmaceutical toolbox company. I wasn't very interested in that. I wanted to stay in agriculture. So Eric Ward invited me to help him and Michelle Hunt start a company called Crop Solution. And another key scientist there was a guy named Ted Illich, who I have the privilege of working with right now. We focused on developing synthetic chemicals for crop protection, and we used a new technology called evolutionary chemistry, which is really cool, and I can talk about extensively. But I'll caution you that it's really cool, it makes a lot of sense, and it doesn't work. We weren't able to get it to work. But that wasn't the worst of our problems. This company started in early 2001. We got an investment term sheet from Gilda for $25 million, and our board approved that on September 11th, 2001. And during the meeting, Susie Gause, our admin, came in with a picture of the first plane. Flying into the World Trade Center. And we turned on the TV and our board watched it. We were able to get cars for our board members that had to go back to New York. So they made it back because they grounded all air traffic in the entire country. Needless to say, we didn't raise that money. Crop Solution had a tough time against meats. We got some SBIR grants and other things. But probably the saddest day of my life was in 2007 when we had to let go of everybody in the company, all 17 employees, including myself. But I looked around for other stuff. I had some other friends in the business, and there's a theme here: don't make enemies. Mike Cozil, Nadine Karosi, and Nick Dux started a company called Athenex, and I happened to do diligence on them for their lead investor when they got their Series A. And they invited me to join them as their a business development person or like chief develop— business officer. They had a really cool platform to use microbes to find genes that would kill insects. And we created a very strong patent portfolio around that. And the result was we wound up selling the company to Bayer CropScience for $400 million in 2009. And because of an ongoing investigation about Monsanto, I had to give all of my emails that had the word glyphosate in them to the Department of Justice and was interviewed several times by the Department of Justice in front of 5 lawyers that represented them. And it was very interesting and educational. There was only one of those 5 lawyers for the Department of Justice that actually had any real understanding of business. All the rest of them had worked either for the government or worked for nonprofit organizations. So I remember one question being asked of me was, well, why don't you just give your glyphosate resistance gene away? And so we had to explain that we were in business, that we had investors. Those investors demanded a return on their investment. We weren't just a nonprofit that we were just going to give things away. So part of that acquisition is that I moved to Germany and I had the M&A group for Seeds and Traits as well as the technology and licensing group for Bear Crop Science report to me. It was really fun. It was great fun living in Germany. We had absolutely fantastic coworkers, really brilliant people. However, I did have 3 bosses in 3 years. And probably 5 different strategies for the company. So it was very difficult to get anything done because by the time you would start to execute, be close to getting something done, the strategy might change on you or your boss might change. So it was very difficult. So I came back to the US and, and started AgBiome along with Eric Ward, Jeff Dangle, and Paul Schulze-Liefritt, Mike Cozil, and John Riles. So if I take a look at this track record of my inability to hold down a job for more than a few years, what did I learn from that? Well, school is a really great place to figure out what you really love to do. And also, for me, it was important for me to figure out how to take care of myself and how to prioritize my myself over other things. If I was trying to take care of too many other people or trying to do too much, it was really damaging for me. And I have— learning that in a, a school situation as opposed to work situation is really important. And you're going to make— or you make great friends that you keep for the rest of your life. So it was just absolutely fantastic. Also, you can maybe collect some degrees and if they reduce barriers to you doing what you love, then that's great. And, you know, channeling a little bit of my Sockus Theologus here, as soon as you get the first 3 done, you're probably done. And although the degree is something that you probably want to get and whatever, but you should really prioritize trying to finish up. So for me, I need to make sure I do what I love. I need to have a purpose. I need to love that. And if there's a book that I would recommend for everybody. It's an old book that still is completely relevant today, maybe more so. It's by a guy named Viktor Frankl, and he wrote a book called Man's Search for Meaning. It's a very difficult book to read, I warn you. The first half is about his time in a Nazi concentration camp. And he then segues that into a kind of philosophy of life, which is very powerful. Big companies are great places to have your first job. It's, it's absolutely the best place to learn about an industry. You're going to meet excellent people, and you're going to probably get some experience in learning the distinction between leadership and management and being a contributor. And I had a difficult time transitioning between being a contributor and learning how to do management and then learning how to be a leader. And I can't say that I'm very good at any of those things like management or leadership, but I try. The other thing that's a lesson for me is that the things that I tend to be attracted to tend to be pretty big goals. And for me to get anywhere near achieving that, I have to help get other people to help me. And I need to be grateful for that, and I need to be thankful for that. And money is also critical. If you're going to work on something that's a really big, important thing, you need money. So you need to understand money, and you need to understand that people that have a lot of money money's not what you think it is. They think of money very differently than you do. And there's a very humorous book. It's quite dated now, so it can be offensive to some people, so just be careful. But it's called Adam Smith's The Money Game. The author is not Adam Smith. The name of the book is called Adam Smith's The Money Game. And it's really fun read. And basically, the thesis is People that have a lot of money, money isn't used to sustain life or build you a house or get you a better dishwasher. Money are points that you use to keep score in your competition with other billionaires. And when you think of money that way, money is very different than if you're thinking of money as I'd like to buy a lake house or I want to be able to go out to dinner at a nice restaurant once a week. Very different things. The other lesson for me is that when I came out of academia, I thought that business was a little bit more fast and loose. And as I got into business, I realized that that thinking was really misguided. And it's misguided in general. People in business sometimes think academia is fast and loose when it's not. And I think this is a lack of respect that various vocations have for one another. But my experience teaches me that in business there's lots of rules. A lot of those rules are really subtle. Sometimes the motivations that are seen to be created by management or by bureaucracy could even encourage you to do things that are going to make you fail. And your reputation is super important. And I would argue it's more important in business than it is in academic environments. Especially if you're in a business where you need to raise a lot of money. So I'm going to transition now and tell you a little bit about AgBiome. These are our vision statements for AgBiome. The core of our business is agricultural crop protection. What we want to do is feed the world responsibly. But in doing our core business, we created an incredibly valuable microbial resource of about 90,000 microbes that are completely sequenced. And so we have business opportunities that result from this asset. And so what we like to say is we want to partner with the microbial world for human benefit. This slide shows our leadership team. I'm not going to talk about every individual on here. I just want to point out that my best friend Eric Ward, I met on the very first day of graduate school in August of 1982, and we've worked on and off together. Tony Bucci is somebody I've known for several years and is in charge of our commercial operation. It's just been a fantastic addition to the team. And then I want to point out two advisors we have Brian Deckers, who I got to know about 10 years ago at Bayer when he was the CEO of the whole Bayer holding company, and he's also an investor in our company and been just an absolute wonderful mentor, provides a lot of good context and helps us through difficult circumstances, as well as John Flannery, who was the CEO of General Electric and who is a financial genius and has helped us with a lot of financial modeling and other stuff. So I'm thankful to all these people for teaching me things that I needed to learn. So what AgBiome has that we believe is unique is we can sit between what growers need to protect their crops— they need tools that they can use for sustainable production— and what consumers want is they want responsibly grown and safe food And we are in a situation where we can provide those things. The fastest growing segment in crop protection, which is now currently around $60 billion, is biologicals. And it's growing to probably around $17, $18 billion by 2030. And it's growing at somewhere between, I don't know, it's about the mid-teens percentage. This is from a particular report of Fortune Business Insights, but there's multiple reports Showing it's growing very, very rapidly. And this is mostly driven by the desire of people to get away from synthetic chemicals and synthetic chemical residues, as well as regulatory pressures. So AgBiome in our 8 short years has created our first product, Howler. It's on the market. We have sales. And this is from a demo trial from a grower here in North Carolina that's growing squash. And he has a Pythium root disease in these things, and he uses treatments through his irrigation system. And what you see is untreated on the right-hand side and treated on the— sorry, on the left-hand side is untreated, on the right-hand side is Howler. And you see how profoundly good this treatment is. He did this design himself, so I don't have really good adjacent fields to show you chemical protection, but Haller actually outperformed the synthetic chemicals and gave greater yield and better quality fruits. And we believe this product is gonna be useful for a whole bunch of stuff. That said, Haller is not good for everything, but where we sell it and where we position it, it works as well as the synthetic ag chemicals. We believe it's the first biological to show that level of efficacy. We believe we're going to be able to drive the market for this product to on the order of around $500 million in sales. $300 million of that sales is kind of shown here for the standalone product, but we also are committed to selling Howler combined with ag chemicals. And you can use a half rate of Howler with a half rate of a synthetic ag chemical You can get better control with those two half rates than you can with a full rate of the synthetic ag chemical. We filed a whole bunch of intellectual property around this, and we're in the process of releasing our first combination product here in the next year. This shows a picture on the middle left-hand side of 600,000 strawberry plants. That have been treated with Howler and that will be used for transplants in the production fields in Florida. So if you ate strawberries from the East Coast last year from Plant City, Florida, you have about a 10% chance that you ate plants that were treated with Howler. This year that number is going to be significantly higher. So how did we discover Howler and these kind of various other products in our pipeline that I'm gonna show you in a second. But this is a very schematic diagram, and I apologize to those of you that are scientists in the audience, which many of you are. This is very superficial treatment. I'll try to add some words to make it mean a little bit more. You probably know there's on the order of 10 to the 12th different species of microbes on the planet. You know also that speciation in microbes is kind of a meaningless term. Because microbes with identical 16S sequence can have up to half of their genes, if not more, that are different. So within the species, there can be thousands of unique genes. So although there's 10 to the 12th different species, there's more than 10 to the 15th different unique genetic elements coding for different biochemical functions. That's a lot. We've isolated and sequenced to completion 90,000 of those. And in the next 3 years we're going to drive that number from 90,000 up to 1 million. When we sequence this, we create a database that currently has over 300 million unique genes in it. It's very difficult to mine that data, and we've had to create a whole series of unique informatics tools that allow us to be able to do a comparison of 90,000 organisms that contain on average 5,000 genes each compared against 90,000 organisms with 5,000 genes each. And we've created a series of different tools, and I'm only going to describe one for you, but one of the big problems in this kind of crop protection discovery is the so-called first founder effect. If I have 20 related, closely related strains in my database of 90,000, and I do random screening and I find the first one that has activity against a pathogen or a nematode, What are— what is the chance that the very first one has the highest level activity? Well, it's 5%. So what we can do is we can go back now, we've got a hit, we can say, who are the closest nearest neighbor relatives of that particular organism? And then we can prioritize screening those other 19 strains. When we do that, we often find significantly higher activity in one of the very closely related strains. And this is probably one of the main reasons why our biologicals have higher activity than many of the other ones that are on the market. Now, the other thing that allows is for us to file IP, intellectual property, not just on one strain, but rather on a family of related strains that has activity broadens our intellectual property, allows us to protect the product better in the marketplace. I'm not going to go through the next couple slides here in great detail, but we have a very full pipeline of products that cover the spectrum of crop protection from disease control to insect control to nematode control to herbicides. As well as combination products with synthetic chemicals, as I mentioned before, where you can reduce the load of the chemical in the environment while still preserving the efficacy that the grower demands. And so this slide just shows more of our pipeline in more detail. Again, if you have more questions about that, I'm happy to try to address them. One of the key things that we did at AgBiome early on is we made sure that all of the screens that we do are validated. So what we do is we create a screen for any of these organisms and we then take the positive hits as well as some negative hits and we do a field trial on them. And if they're— if it shows an 80+ percent, 85+ percent correlation with the screen, a positive hit, the screen shows good activity, then that's a validated assay. But I'll tell you, the very first antifungal assay we ran was an in vitro screen. And when we did the assay, we tested field trial 50 strains that looked good on plates and 50 strains that were negative. We took them to the field and we got results that 2 or 3 strains were active from the positive controls and 2 or 3 strains were active from the negative controls. So I can tell you we no longer use that screen. It's worthless. And this is a really critical factor. The other component is we actually use the pest that's a problem for the grower. So for example, for herbicide screening, we use herbicide-resistant Palmer amaranth that's resistant to glyphosate as well as other herbicides. We use the weeds that are the actual problem for the grower. We think that's really critical. So beyond crop protection, I'm going to tell you a little bit about a deal we have with Alonco for animal health. We also have a genome editing platform which you're going to read a press release next month about. We have, in isolating all these genes, it turns out we have thousands of unique CRISPR systems in our database. Some of these have as little as 5% identity to the current known published systems. And we've been able to turn more than a dozen of those into active CRISPRs that are now being used in both mammalian cells and in plants. And for those of you that aren't aware of, like, the human problem here is the current genome editing tools are limited in terms of some of the features that they have. And if you have any given disease, there's usually multiple alleles that cause that genetic ailment in a human being. So you need multiple tools. And our genome editing platform, which is a company called LifeEdit Therapeutics, is doing just that. We also have interest in enzymes and biochemical pathways and other things. So I'm going to tell you a lot about the joint venture we have with Geneective here in the next 20 minutes, but we also have a deal with Allanco for direct-fed microbials for animal health that suppress disease from E. coli and Salmonella. In swine. And that project is going along fantastic. And we just announced a deal with TMG around boll weevil control for cotton focused on Latin America. Here's a list of some of our investors, but I'm going to skip over that unless you have some questions. And this slide 26 just shows you what the highlights are of where we think we have competitive advantages relative to other companies. Companies in this space. So I want to talk a little bit with you about culture. When Eric and I started the company, we had a very deep interest in company culture, and the reason is shown here. It's not just because we're dope-smoking Grateful Dead fans. It's because we believe that if you create a work environment where people want to work there, and where they feel autonomous, and where they can exhibit mastery, that they're going to do way better. And indeed, that's what the data suggests. And the kind of common thing that people think is people are motivated by carrots and sticks, and I— we just don't buy into that. There's a lot been written on this, and one of our favorite authors is Daniel Pink, wrote a book called Drive. And what I've listed here are what are called the 7 deadly sins for this kind of carrots and sticks motivation. I think it's even worse than this. I think it's very rare that people are truly motivated by money or by some benefit like that. Rather, we ascribe to this. Now, I pulled this slide out, and your eyes are not bad, it's in Norwegian, and maybe a few of you are Norwegian and can read this, but I like it because it proves that this is an international phenomenon, not just something for weird people from North Carolina. What motivates people in general— there are exceptions to this, but People like to be autonomous. They like to be able to make the decision of what they're going to work on themselves. They also want to become a master of a skill. They want to become really good at it. And I can tell you, this is ancient history, but when I was a postdoc, I became really good at using a technique, which is ancient now, called Northern blot analysis. So you could look at gene expression. And I got so good at it that I swear to God, I could— I felt like I had a sixth sense. Like I could do this thing, and then I knew which genes were expressed in a plant or whatever. And it felt very powerful to be that good at a technique. And I think everybody should enjoy that type of power, personal power, where you feel like you're so good at something. And then purpose. That's why I mentioned Viktor Frankl's book.. But I think if you have a purpose that you're motivated for, and what you personally are motivated for is the same thing that your company is doing, that's just wonderful. And that creates a power that you almost cannot replicate by any other way. And the result of these three things is a very high degree of autonomous motivation, which is very different than being forced to do anything. Now, if you create a company that has these things, a lot of people say, oh yeah, fine, you know, yeah, you went to one too many Grateful Dead concerts, that'll never work. Hierarchy is what works. That's the way business does build. That's the way business is built. And I would just posit this, that if, if this was the 14th century, the same people that say that would say, oh, you need a kingdom or a fiefdom. That's the only thing, that's the only way to organize people. And you need to hang some people once in a while just so they stay in their lane. It's right. I think this is just specious argument. It makes no sense. And it doesn't make sense, especially if you look at all the data that's out there that shows that hierarchies don't work. That what this data shows from the— this particular group here is that in order for you to get another 2 people's worth of work done You need to hire 3 people as soon as you've scaled above 100 people. So hierarchies don't work. They're incredibly inefficient, and often they're worse than inefficient. They're actually miserable places to work. So what does work? What scales? Well, cities do. Cities actually become more efficient as they become larger. And if anybody's been to a small town, or been in the government of a small town, you understand how difficult it is to make your budget work, to make things really work well. So as it gets bigger though, it becomes more efficient and effective because certain things— you have one garbage truck, you only have 17 residents, well, it's hard to make that work because it's going to cost too much. But if you have 1,700 residents, well, one garbage truck can work. So Things like that have an economy of scale as well. Cities are planned, but they're not dictated. Unless you live in the Soviet Union or something like that or China, they're planned, but you have flexibility. So, okay, here's a region that's going to be commercial. Some developer wants to build a strip mall there, but nobody forces them to do that. Then he builds a strip mall and they get an anchor tenant for, say, a grocery store. And then somebody says, hey, I want to put my hairdressing shop in there. Nobody forces them to do that. It's free will. And that autonomy and that ability to self-organize is an incredibly powerful motivator that you can take advantage of. Now, how do you do that in a company? Well, there's a so-called thing called self-managed companies, and I hate that term because it insinuates that I manage myself. But those are the wrong words because those are singular. And what self-management means is we, plural, manage our, plural, selves. Everybody at AgBiome is managed. Everybody in any self-managed company is managed, and you're usually managed by somebody else. However, it has some big advantages that you are going to be understanding what the purpose of the company is. You're going to have alignment with that, and you're going to be a participant in the management of of what things go on. So what is AgBiome? We like to say experts with the knowledge make decisions, and we try to continually improve our company. And we don't make any incentives for growing your group so that you can try to build a fiefdom. There's no incentives for that. And we reorganize the company if projects get completed or if the organizational system we have in place is no longer effective. So you don't have a job title that's based on how many people report to me, because by the way, nobody reports to anybody. So in building this kind of thing, we believe it leads to a competitive sustainable advantage for the company. This shows it, I'm sorry, there's a few new hires that are not present here, but this shows the employees of AgBiome, and every one of these people has been important in achieving the results that I showed you. So now I'm going to segue and talk to you a little bit about this joint venture between AgBiome and Genective. And Genective, as you know, is housed here at University of Illinois, and they're very happy to be there, and we're very happy to be partnered with them in a joint venture. And again, to start out with the Socrates thing here, what is a joint venture? Well, The minimally, a joint venture is nothing more than an agreement between two part or two companies or two different groups to participate equally or nearly equally in some activity. And that is the sort of JV that we have. So it's a contractual joint venture. The other extreme to a joint venture is where you actually form a separate company and both parent companies own 50% of the new company. And the advantages of that or disadvantage of it is it is its own separate entity. It'll be managed completely separately at some level, but it also has some other burdens. It has to pay taxes itself, etc. So there are disadvantages and advantages to both different types of methodologies. Now, what is the purpose of this company? It's to work on insect control traits. For soybeans and corn. And as you know, there's a lot of resistance to the insect control traits that has evolved over the past decade or more. And so what they try to do is limit the development of this resistance by requiring there to be refugia, which basically means there's areas of plants that do not have the resistance gene, do not have the insect control gene in it. That are planted to allow there to be some counter-selection for resistance. And there's two basic types. There's block refugia and there's refuge in a bag. And the number of, the percentage of the acre that's planted as this non-refugia can be as little as 5%, although that's very rare now. And most often it's either 10 or 20%, or in southern regions where they also have cotton grown, it's 50%. What we want to do is change the paradigm, the way that people look at resistance management. And what we're going to do is shown here. What people do now is you have your stewardship based on refugia, and what we plan on doing is every decade or so create a brand new set of multiple modes of action for every major pest that you substitute into the germplasm. So you can preserve the resistance or the insect management tools, and you're putting a new set in. So you're just doing this. And if you study this kind of resistance management, this is absolutely the best, most stable form of resistance management that you can develop and release into the marketplace. It's more technically challenging, It is more expensive, but it's also more sustainable. Now, in support of this idea, you probably saw, but earlier this year, the EPA said it's considering eliminating all the current insect control genes that are on the market because of resistance management problems. And the only ones that they're considering keeping are ones that contain Syngenta's Vip3A. This includes almost all the pro— about 90% of the products that are on the market. So you can see there's a high need for what AgBiome and Genective are doing. So what is Genective? It's a joint venture between Liebner Grain and KWS. And it's specifically put together to create these genetic solutions to pest management, especially for corn, but now also soybean. The parent companies for GeneActive are shown here. It's important to note that KWS is the largest German seed company and Groupe Limagrain is the largest French seed company. It's also a co-op of farmers, of roughly 600 farmers from the central part of volcanic soil in France. And these two companies have come together multiple times to form joint ventures. They also formed a joint venture, which is of the more extreme type, where it's a separate company called AgriLiant, and they sell several brands of corn seed. And they're the third largest corn seed company in North America. And it's one of the big benefits we have in this collaboration because that's a ready outlet for us to look for ways to sell our products. So how does this JV work? Well, we have complementary experience. As I mentioned, ecobiome. We've got all these microbes. We've identified more than 6,000 candidate insecticidal genes. And we've got a whole bunch of unique new mode of action genes in the pipeline for both lepidopteran and coleopteran insects, which are the two basic categories of insects we're focused on. We also can do maize and soybean transformation. We can do field trials, etc. As well as we've developed a whole bunch of validated assays to be able to show these things work in smaller scale and in greenhouses. What Geneective has is some overlap here with in vitro testing and whatnot, but what they also have is very good understanding of how to do these field resistance and isolate field-developed resistance, resistant insects. They can also do very good whole plant assays in the greenhouse. They have excellent regulatory experience and they have access to this commercial germplasm from KWS, Limagrain, and AgReliant. They also have a lot of tools and understanding and knowledge on integration and breeding, which is what you need to deliver one of these particular products to the marketplace. So this is really a marriage made in heaven for us where we both get to take advantage of what we're best at And in the end, we're supplying the entire industry with something that's really needed. So I'm going to end here with the vision of the company again, feeding the world responsibly. And I want to tell you another personal story. So my father's father, my grandfather, he died when my dad was 7 years old. And in a weird fate, He actually didn't, my father did not know what his surname really was. My name Euknes was Ellis Island special in the 1916, '17 timeframe when he came across. That's what the officer at immigration wrote down, Euknes, but that's not how my name is spelled. So I didn't know any of my actual relatives in Lithuania. Because with the misspelling we couldn't track any of the records that came through on the boat. So 2 years ago I got an email from somebody named Vidia— Vida, her name is here on the thing— and she wrote me saying, you're Scott Yukness? Is your father named Julius and your mother named Frances, and did you live in Chicago? And I'm like, hmm, this is an interesting Nigerian prince internet scam here. And so I contacted her, and it turns out she was working on my family history. And she figured out that they probably misspelled my name, and there were only a couple of Youknises. I'm one of the few that's on the internet. So she reached out to me. Turns out my real name is Juknivicius. You can understand why the gentleman at Ellis Island misspelled it. It's shown there at the top, and what you see pictured is my grandfather and my grandmother, who last year before this whole COVID thing, my wife and I went to Lithuania and I got to see both sides of my family and meet some new family members that I had no idea existed, including Vaita's son Aurelius, who owns the largest electronic company in Lithuania. So he's an entrepreneur. He started it in his garage. And in a really weird twist, turns out that Vaita was a professor of agriculture from Vilnius University. So that's the end of my story. Thank you for your time.

Thanks very much, Scott. Really fascinating seminar and tour of your life. I think Elena will take over now and monitor questions.

Elena? Thanks. I just love all the stories, and we do have a number of questions come in. If you have any more, text them to me, but Thanks for sharing about the science, the management, your personal history, and let's see, one question here is, can you speak about what is evolutionary chemistry and why it doesn't work? Can you speak more broadly about how you pivot and lead a team when you discover your science doesn't work as you thought it would?

Oh, good questions and tough. So evolutionary chemistry, simply put, is based on the understanding that life probably evolved from RNA and not proteins. And if you decorate RNA with alcohol groups and whatever, you can make it pretty reactive. And so the way that it's supposed to work is that if you have a high diversity of unique RNA samples and you tether to that a substrate, and then mix in the solution another substrate that those two substrates, the one tethered to the RNA and the one that's free-floating, could react to create a new molecule. And if you have a lot of diversity of chemistry in the solution and the RNA molecules can fold so that they're enzymatically reactive, because of proximity effects, the most likely thing they're going to react with is the substrate that's stuck to itself. So theoretically what would happen is the RNA would fold, it would react with one substrate unit that's bound to it, and then pick a substrate from the solution and cause a reaction. And that reaction will be specific. It will be specific for the free-floating substrate, specific for the, the component that's bound to the RNA, as well as specific to this specific RNA sequence. And then through using PCR, you can replicate that thing that made this new molecule. And if you have a way to capture the new molecule by using some type of binding assay to say a target for a drug or for a crop protection, then you should be able to do recurrent selection where you mix the stuff together, let it react, then do a binding assay of the whole mixture to your target. Anything that sticks, you PCR up and do that again. And by doing it, you should be able to isolate RNA sequences that have efficacy to create the new molecule that binds to the target and inhibits it. That's the theory. Boy, is it elegant. It sounds great. And under certain circumstances, you can make that work. But under the circumstances that you want to use for screening, we were not able to get it to work.

Work.

Okay. And then pivoting on a business, I, I think I said in the beginning, uh, and I'm gonna give you a quote here. The guy who started Shake Shack, his grandfather told him, uh, quit thinking that you should have everything work out, and, you know, you want things to work out great, and Business is problems. That's all it is. What you need to do is find really good people that you have fun working with, and you need to work on fixing the problems. And when you have a technology that fails, that's just a problem. Find a new technology. Take advantage of what you've learned and, and exploit what you can.

I think that reflects how you sort of embodied that advice and made it fun for yourself and keep tackling new problems. So we really appreciate you spending time to share your story with us, and if anybody has questions afterwards, they can reach out to you directly. Yes. And I know you have a few more meetings scheduled today, and we look forward to— oh, this is— oh, someone said Steve Mo said, this is really just to thank Scott for guiding us through a great trip about the history of AgBiotech. AgBiotech was awesome in the RTP in the '90s, and I hope Ward and Riles are still having a golf game.

Yeah, I know I gave it up, and I think they both have too.

I think you have a lot of commonalities with more faculty at the IGB and broader on campus too. So I think there's gonna be a lot more conversation about the screening and your science problems and the AI issues you're tackling. So we look forward to engaging more and hopefully you can connect with Steve also. Great.

Thanks. Look forward to it. Thank you so much.

Everyone's applauding. Thanks, Scott.