Ryan Grant Little 0:06

Welcome to another Climate Tech Podcast interviews with the people trying to save us from ourselves . Kidus Asfaw is the founder of Kubik , a company turning the materials we throw away every day into construction material for low-carbon buildings . We talked about investing in African climate tech , his recently being named as one of Time magazine's 100 most influential people in climate and what gives him optimism for his children's generation . I reached Kidus in Addis Ababa , Ethiopia . I'm Ryan Grant Little Thanks for being here , Kidus . Welcome to the podcast . Thanks for having me . You're the founder of Kubik , which is a company that turns plastic waste into low-carbon buildings . Can you talk a little bit about where the idea came from and what problems specifically you're trying to solve ?

Kidus Asfaw 0:56

So I grew up here in Ethiopia , in the capital , Addis Ababa , and in my professional life I also had a chance to travel to many other parts of the world that look like home , and one of the things that I started to notice that also was a reflection on growing up was cities are growing very rapidly with human beings , but also with space , and the challenges that cities are facing now are very different than what they used to be even 10 , 20 years ago , and they usually revolve around managing waste , around providing affordable accommodations for people who live in it .

Kidus Asfaw 1:39

But cities are also one of the biggest contributors to climate change , and they're having to start thinking about what it means to be a contributor to the solution versus the challenge in this space .

Kidus Asfaw 1:52

So about eight years ago , my mentor and close colleague of mine started a program in West Africa while we were at UMassf . That was the first circular economy project , and what we were focusing on was how we can actually reduce waste and drive affordability , and how schools are being built . That became the inspiration to what now is cubic , and at cubic , our mission is to build a clean and affordable living for all , and doing that by providing people a dignified way of life , and we have a product that is eliminating plastic waste , and that plastic waste is then converted into building materials that are as safe and strong as what you see on the market now but are very affordable and are five times less polluting . So it's able to tackle these three very , very big issues that cities are always thinking about , and we feel that we have a product that is providing just the beginning of what can be a very transformational business to how we live in this built environment .

Ryan Grant Little 3:03

You mentioned five times more sustainable . I saw a CNN segment which showed a daycare center that you made and it took just over two weeks I think it was 16 days to build . So on the sustainability side , the speed looks like one of the advantages . Well , what are some of the other advantages to , maybe to upcycling these kinds of materials or to building this way ?

Kidus Asfaw 3:27

So when we started cubic , instead of focusing on the product , we actually focused a lot on the market , understanding who would buy this stuff if we were ever going to sell it right , and we pinpointed real estate developers to be our primary client . They're the ones who are taking on these projects build affordable homes or to build schools and clinics and we had to understand where their pain point is with the current state of how their business works , but also understand what kind of opportunities they see for things to improve . Of course , cost speed of construction are the biggest pain points for them . In a market like here in Ethiopia where cement prices sometimes double or even triple , that cost sensitivity comes into play for them , but also speed , because when they're taking on a project there's an expectation they deliver it on time , both for their end users but also because their business runs on quick delivery so that they can start generating revenue over the other ones that we've heard are I mean it's being very flexible on how they can use the product . When we ask them what they love about the current way of working , what they say as well you give me a wall and then I can paint it , I can plaster it , I can drywall around it right . They want that type of flexibility .

Kidus Asfaw 4:53

So we actually focused on being less beautiful and actually being more boring as a product right , so that the focus becomes more on the flexibility of how they can build with this . And then , finally , it's quality control . In a market where labor can be cheap but can also have primarily unskilled labor , one of the biggest things that they grapple with is having to work with specialized products that require specialization , and finding that type of workforce can be very difficult . So what we had to focus on was can anyone actually pick this product that we have and make a wall that is consistently great ? So , to your point , around the daycare . It's not only that it took 16 days to assemble , it was actually assembled by grade three contractors . So these are contractors that are very unskilled . They know at best how to lay bricks , but that's it , and they were able to do it flawlessly right , and that is the type of value add that we believe that we can provide to developers as well .

Ryan Grant Little 5:58

It's interesting . I mean it sounds like it's potentially more supply chain stable than something like cement as well . I wouldn't have thought of that , but that's a great quality for building materials . Your ambition goes beyond just plastics , and so you've talked about using different types of materials and also about becoming a technology platform for the materials industry , so all that sounds really interesting .

Kidus Asfaw 6:25

I wonder if you can kind of connect the dot between where you are now , what you're doing now , and what that long term vision looks like so cubic is a venture backed startup , and if you ask why VCs have backed us , I would say it has less to do with the current product that we have or the incredible traction that we're getting in Ethiopia , and a lot more with where we actually want to get to . We believe that our venture scale growth will come the moment that we're able to provide various forms of building materials solutions to building materials manufacturers , right . So there's very few but very large materials companies out there . Most of them are using some form of concrete for their product , and what we need to do is find a way where they can be convinced that being a contributor to the fight against climate change is not expensive . This means being able to use products like ours that are very marketable , very profitable , right , and at the same time , they are less greenhouse gas emitting .

Kidus Asfaw 7:38

In order to get there , there's various milestones that we feel we have to hit . Of course , the first one is showing the commercial viability of our business , and that's what we're doing here in Ethiopia , but over time , we need to show that the supply chain around getting trash is a no brainer . We need to show that the manufacturing of our product can be decentralized . We need to show that the clients that we can attract go beyond commercial real estate developers , and the more we are able to do that , the easier it's going to be for us to pull in building materials providers that will then see us as a licensor of a technology that they can also use and build on , and by doing that , what that transforms Cubic into is a company that's less focused on manufacturing over time and a lot more focused on IP development and R&D around waste to materials that are more sustainable and more affordable to the built environment .

Ryan Grant Little 8:43

I've actually personally been involved in some plastics recycling projects in Africa in Kenya , ghana and South Africa and the premise kind of we brought to those projects was that they're a spectacular entrepreneurs and great opportunities , but the financing is the challenge , and so what we were looking for were projects that were already operational and that , with an extra million bucks , could double from 3000 tons to 6000 tons a year or that type of thing , and that and that bore out so that really worked out well . I'm less familiar with some of the kind of broadly speaking climate tech startup space in Sub-Saharan Africa and I wonder our venture capitalists seeing the opportunity , broadly speaking , in Sub-Saharan Africa for climate tech companies ? You're backed Satg ana , which is a European fund that has a focus on Africa as well as Europe and full disclosure . I'm an investor there , but my sense is there aren't tons of investors active in the region .

Kidus Asfaw 9:45

Investors in the climate tech space in Africa , I think , are just at the cusp of even shooting up right . There's many different types of ventures that we see here , especially with an ag tech around being able to build more centralized data repositories , around climate resilience and , of course , around solar and mobility . I think what we're seeing less of are companies that are being venture backed and are contributing to the decarbonization of the built environment . Just to give you an idea , real estate as a sector contributes 42% to greenhouse gas emissions . Concrete was a country . It's the third largest greenhouse gas contributor in the world and yet a lot of our focus goes into things that are seemingly more obvious , such as mobility . And if we have a few ventures that can actually prove out that we can put significant dense in the construction sector through new technology , then there will be a larger inflow of capital into the sector as well .

Kidus Asfaw 10:57

The reason why I will bet on Africa for this has a lot to do with the market being very ripe for innovation , and it's still just starting right . As much as you see , skylines upon skylines of skyscrapers . The industry is just starting off . Unfortunately , there's a lot of let's call it inspiration being drawn from how the industrialized world has built to date , and it doesn't have to be that way . I believe that the continent has an opportunity of actually defining the path to how more sustainable infrastructure can be built in cities like here in Addis Ababa .

Ryan Grant Little 11:37

And our venture capitalists from other parts of the world taking notice with the industry . That's , as you mentioned , on the cusp right now . I know you're backed by Satgana , which is a venture firm that I'm involved with as well , based here in Europe . Are you feeling an increased presence , or is it still kind of meager ?

Kidus Asfaw 11:55

I think climate tech focused VCs are still processing and trying to understand what it means to save earth while being profitable in their business . Right ? Vcs supposed to make early stage bets and hopefully one or two unicorns come out of it . A lot of the anchor to that process still exists in places like the US and Europe . You know a few parts of Asia and the issue with that is it completely removes the idea that a place like Ethiopia can actually be where you find that unicorn .

Kidus Asfaw 12:37

Right , I think there's still an emphasis on software based solutions because that's really where profitability has been seen so far or like large returns have been seen so far . When it comes to the VC space , what I admire about VCs like Satgana is that they are very principled in believing Things can look very different when it comes to returns on investment with climate tech hardware focus , the companies like Kubik and the way that they think through this is there is an aspect where software can still play a role in accelerating a hardware business and they focus on finding ways of matching companies like us to companies that are already doing that and hopefully helping us become a lot more resilient and use software and in our work , but at the same time , they're philosophically grounded in understanding that none of this return matters Unless earth is safe , right and earth as well . And I deep respect for those type of VCs because they're going to think very differently in how to source for new solutions and they're not going to be geographically or sectorally bound to places where VCs have traditionally flocked to .

Ryan Grant Little 13:53

I'm interested to get to know a bit more about you as a person , because you have a really interesting background and you mentioned a little bit earlier Unicef . You spent eight years working in development with unicef and the World Bank before you launched Kubik and I wonder what the shift from kind of the international development space into the world of startups has been like and and specifically , I guess what skills and mindsets were helpful to bring over and which ones did you kind of have to shake off ?

Kidus Asfaw 15:16

So , before being in the international development space , I did spend some time in private sector , primarily in software . I worked at Google and later on in management consulting with Accenture . I think each phase of my career has given me a certain Tool within my toolkit to be prepared for what is , in my opinion , a journey that you can never be prepared for , which is entrepreneurship . I would say in my early days , a lot of the work ethic and thought process around Digesting very complex , difficult problems and incrementally solving it has come from my time as a software developer and working in product and international development , especially during my time at unicef . What I started to understand is your software , or any kind of brilliant solution you have , has very little value unless humanity embraces it , and in order to do that , you really need to listen and understand people and understand what they're looking for . This idea that you can give someone a solution is a bit of a fallacy . You need to learn and , you know , actually cater towards what people are wanting . I've traveled to over 40 countries during my time at Unicef and the one common thread that I always saw was this idea that even those who are in the most desperate of situations , or desperate of circumstances or dire circumstances , are still not looking for a handout . They want a dignified way of life , and that comes down to having opportunities to choose their way of life . And that has really stuck to me , because when I started Kubik , one of the things that I had to think about is why am I really doing this ? Is it because this is a cool product ? Is it because I just want to be in the startup scene now , or is it really because I'm catering to something that I've been listening to over the years and there's something there that I can now start catering towards ? And I felt that it was the latter . I got in here Now .

Kidus Asfaw 17:25

One final thing that didn't come from any experience , but it was just very serendipitous from speaking to a lot of mentors and friends that have founded companies before . Is this idea that you don't go in to a venture feeling comfortable that you can succeed in it you actually go into it because you feel comfortable to fail at it , which is a very different way of thinking . Right when leaving a fairly stable job in an organization that I was definitely doing well in being supported in is something that , honestly , was an unknown and uncharted waters , I really had to think what would I feel if this miserably fails , and will I still find it to be worth it ? And it was answering that that led me to feeling that I was ready to start Kubik Now .

Kidus Asfaw 18:17

After that it was a massive roller coaster ride , a dizzying one , and it continues to be one as well . But you do it because of the process and because myself and everyone who works at Kubik have this philosophy of being very stubborn around the North Star that we are guiding ourselves towards , but being very flexible on how we get there . Like we probably know half a percent of all of the possibilities of what can happen with every decision right , but having that mindset that we can always take a step back , think through it and see if there's alternate ways of getting there . It has been the secret sauce to our team's kind of dynamic way of getting to new milestones .

Ryan Grant Little 18:56

What comes through in that answer is how reflected you are on this topic and on the decision to do this , and I noticed that also in reading some of your other interviews . And one of the words that you use a lot and that pops up a lot in connection with Kubik is dignity , and I wonder if you could just maybe talk a little bit about why that is maybe the North Star or a North Star .

Kidus Asfaw 19:20

Over two billion people live a very different world than me and you . They have lived lives where they had very little to no control over their physical environment . Think of places where , not too long ago , even in my home , northern Ethiopia , there was civil war right with tens to hundreds of thousands of people being affected by it . These are not choices , right , this just happens . And there's a life that they are forced to face where they have to make very quick decisions and trying to keep kind of the basics of life moving , which comes down to eating , drinking , having shelter and , obviously , being safe and keeping their children safe . And these are the type of people that I've had the privilege of serving during the time that I was at UNICEF and really getting an utmost respect for how they view the world , which I did not understand , which was the basics of humanity comes down to being able to have the right to choose the way you live . And there was this annoyance that they would have when they see you know that's an aid worker or someone wearing a UNICEF T-shirt , like myself , you know going over and asking like how can I help ? Or like what can I do for you ? Right , they're like just get me out of this so that I can do something with my life Like I want , to craft my way right , which is very different than how I would have thought people would think when they're in that situation .

Kidus Asfaw 21:03

So the reason why dignity has stuck with me is , you know , dignity doesn't come from having been chosen the way you live , but having had the privilege of choosing the way you live . And the way that that is reflected in our company is like nobody wants to live in trash , nobody wants to live in a polluted environment , right . Giving them the dignity of choosing not to live that by removing all of that , that stuff around them is one way . Nobody chooses to live in a shack made out of corrugated steel and or corrugated sheets . That's all they could afford . So if they had the dignity of choosing a much better product , near to or almost as the same price as what they're used to , we've given them that dignity to choose a different way of living .

Kidus Asfaw 22:00

And then , when we think about women and the space of waste management and construction and manufacturing , most of them don't really have much of a choice of how they're living their life , especially in waste management they're . Over 80% of waste pickers in the world are women , but they get less than 20% of the value add from that trash that sold . Being able to empower them to become entrepreneurs and giving them direct access to selling that product to us is another way that we can provide dignity , and I believe that over time , that scope of what dignity means to us will continue to change and evolve and grow . But this is how we see it today and this has been something that's touched the hearts of a lot of people that have joined Cubic , either as an investor or as an employee , and it's definitely become the soul of why we do what we do in this company .

Ryan Grant Little 23:02

I love that you were named one of the 100 most influential people in climate by time , as in the magazine a few months ago . First of all , congratulations . There are a few familiar names on that list Bill Gates , Coldplay but I wonder there are also a lot of unfamiliar names and not household names on that list and I wonder if you want to mention one or two of them and kind of highlight why you wanna mention them .

Kidus Asfaw 23:31

I would have expected to see more mayors on that list and the mayor of Freetown and Saralil , and being on there was something that I was starstruck by , because I've heard of her before as well . You know , working in Addis Ababa has given me so much respect for those who work in city administration . I can think of people Dr Roshade To , who's the head of the Addis Ababa Solid Waste Management Agency , who has this daunting task of managing all of the solid waste that passes through a city of millions of people and trying to make it work right . These are the people who are really at the forefront of fighting climate change . They have to make decisions around how we live , but also how we can continue to have a life in the city , and I'm really happy to be featured on time , but I would say , highlighting the incredible role that city administrators play , activists within cities play is gonna become paramount to exposing the real fighters within this existential topic called climate change .

Ryan Grant Little 24:51

On top of this kind of work , you've got a fair bit of work at home as well , because you've got three children and you've spoken about how you want to be part of building a world where your kids can have as happy and rewarding and upbringing as you did . And of course today's world has all kinds of problems that didn't exist when you were a kid . But then it also has some solutions to problems that existed back then , especially in medicine and technology . And I wonder , when you think about that , when you imagine the world ahead for your kids , what does it look like and where do you find that optimism ?

Kidus Asfaw 25:31

One of the things that I've always told my kids is none of this is worth it unless they have also brought others up along the way . I think you know , as a parent , you invest so much in your child to have the best opportunities as they grow , as they become adults . It is rarely spoken about how they also have a responsibility for others that never had the same opportunities that they did . I was very lucky to have parents that instilled that in me . They invested a lot in my education and gave me incredible opportunities to get me where I am today , but they always told me none of this is worth it unless I pay it forward , and I also commit my life to bringing others up in life as well .

Kidus Asfaw 26:18

I think for my kids . I obviously want them to see and live in a planet that's not dying , and I know they're going to have to do a lot of work even after I leave this world , to fight and making sure that we have a livable planet . But I also want them to live in a world where equity becomes a given . The disparities in how people live today is beyond shocking , and it only takes coming to a city like Addis Abba or Freetown where , if you are near the skyscrapers , life looks amazing , but then the moment you go towards the peripheries , you can see how there's a very different world and a different life that people are living , and I don't believe that should exist . I think we are at an age with tools , technology and different ways of thinking that we can avoid that , but I'm afraid that divergence continues to grow and I would like to see how I can contribute to making that not the case anymore .

Ryan Grant Little 27:26

If people want to find out more about Kubik or get in touch with you , where's the best place for them to find you online ?

Kidus Asfaw 27:32

Visit us at buildkubik . com . Kubik is spelt with K's , so it's buildkubik . com .

Ryan Grant Little 27:41

Kidus , it's been a pleasure to get to know you . Thanks a lot for your time . Thank you so much for having me .