I’m Betting against Soylent article


#1

I’m Betting against Soylent

-Jason Kuznicki

What do you think of this guy’s bet against Soylent.

I think the terms of the bet are unrealistic, but I don’t know much about starting a company or expected revenue.

I figured they would have to have 180,000 sububscription cusomers (each ordering 1 month/month) to get to the $600,000,000 in revenue.

That’s about 5 million days of Soylent shipping per month or about 60 million days per year.


#2

Just another foodie.


#3

Hmm, okay… That’s like saying “_____ wins the bet if the Seahawks or any other NFL team beats the Broncos by 600 points. And I win the bet if the Seahawks lose to the Broncos. Any other outcome and the bet’s off.”

$600 Million is a helluva spread!


#4

I’ll be honest. This seems ridiculous to me. I’ll bet against ANY company pulling 600 million in revenue in a single year (which must fall in their first five) in a product category THAT DIDNT EXIST BEFORE THEY CREATED IT.

If he really wanted to bet against Soylent the way he says he does, he wouldn’t be afraid of the idea that this could be a seismic shift in the way people food and we could be looking at a dozen Soylent-like companies in five years.

He’s stacked these requirements such that Soylent needn’t fail to “fail”, it just needs to fail to hit a third or fourth level tipping point in its FIRST FIVE YEARS. That sounds like exactly the kind of hedging he’s back patting himself for NOT doing.

Out of curiosity, does anyone know of a company that would’ve succeeded by this bet’s standards?


#5

I can see hitting the 300,000 user mark though. That’s 1/10th of 1% of the population, roughly.

I appreciate the fact that he’s willing to engage in a rational discussion and simply state his position and be willing to define the boundaries of it, as well as entertain the possibility he may lose. Way more respectful than most detractors.


#6

But the real question is would Soylent be able to ship 300,000 months every 4 weeks? Or a better question, would their suppliers be able to keep up?


#7

Apple, iPad

Just saying it can be done, but Soylent <> Apple


#8

Not without major additional investment … Which either through venture capital in exchange for a stake in the company or an IPO would break the bet’s change of ownership clause. All the Soylent supporter did was not take a lopsided bet.


#9

There’s an opportunity for innovation, here - if you could optimize production of Soylent ingredients on a massive scale, somehow made it completely acceptable to all segments of the population, and obtained the right facilities and technology to process the ingredients, you could rocket Soylent production into an entirely new economic universe. That means no gmo, no pesticide, closed loop fertilizing (no runoff, everything is cycled back in,) solar powered facilities, etc.

The biggest challenge as I see it is to make it economically viable to grow. I think the bottleneck is going to be the ingredient sources, as those directly affect economies of scale. It won’t matter how popular it gets if the supply can’t match demand, because enthusiasm will wane.

One bushel of oats is 32 lbs, or 14,500 grams. Official Soylent has 110g oat powder per day, meaning that to get a years worth of oats for one person, you need 2.8 bushels. An acre of land can produce 100 bushels of oats, so to get just 2.8 bushels, you’d need 114 square meters, or to round up a bit, a lot 11 meters on each side.

For corn maltodextrin, you need to hydrolize the starch from corn - about 70% of the kernel by weight. Assuming 70% of your yield goes toward maltodextrin…
52 lbs of 15.5% moisture corn per bushel. 150 bushels per acre. Dry it out, leaving 30 lbs corn endosperm (starch) per bushel, giving you 4500 pounds or about 2000 kg of maltodextrin. Since you need 165 grams of maltodextrin per day, that means 6.0225 kg per year. That comes out to 12 square meters, or a lot 3.5 meters on the side, for one person’s worth of maltodextrin per year.

Brown rice yields about 7000 lbs per acre. 102 grams of rice protein is needed per day . Rice has a complete protein profile, and yields around 8% of its weight as protein. 37230 grams of protein are needed per year, or 465375 total grams of rice, or 1026 pounds. This takes up about 610 square meters, or a field 24 meters on each side.

Canola yields about 40% of its weight as oil. There are 30 bushels per acre, 50 lbs per bushel. An acre yields 600 lbs of oil per year. You need 56g of oil per day, so around 46 lbs or oil per year. That takes up 307 square meters, or a field 18 meters on each side.

For the macronutrients, as they stand, for each person, a years worth of each (assuming only one harvest) takes up 1043 square meters, or roughly 1/5 of a full size football field.

Assuming 1043 square meters per person, for Soylent to feed 300,000 people, you’d need a farm that was 31,290,000 square meters, or ~5600 meters on each side. 7732 acres. That’s about 3.5miles on each side, for us Americans.

If you were going to feed the entire world (assuming 8 billion people,) then you’d need 206,189,244 acres, or a field roughly 570 miles to each side. That’s just over half the state of Nebraska.

If you take into account multiple harvests, space optimizations, change the recipe to incorporate rice starches and corn protein, I’d bet the overall size for one person could be cut down to a 900 square meter field, 30 meters on a side. Maybe a lot smaller if you get multiple harvests.

If you had a hypothetical nuclear powered mega-farm that used electric grow lights, you could stack the crops on top of each-other, cutting the footprint significantly (how’s that for dystopian!)

I’ve rounded up in these estimates, and used google liberally. My numbers might be very high or very low, as I went with the first link of the first page of results that seemed plausible. I personally think that you could get the size down to half of what I’ve presented here, but don’t currently have the time or inclination to justify it :stuck_out_tongue:.


#10

Here’s my bet: in 10 years time Rosa Labs will be bigger than Apple.

If they aren’t, I don’t have much hope for the future of humanity. Without a radical change in food production we are doomed to mass starvation as the population increases.


#11

Right, but apple was already one of the most profitable company in the world, and tablet computers had been around for a decade, they were just the first successful one.

Obviously, you could say that Ensure, Slim Fast, etc have been around so it’s not a new category either but in my mind the only thing those share with Soylent is a form factor. Soylent’s main differentiator (and the thing that in my mind puts it in an industry that doesn’t yet exist) is it’s intended user base. It’s not intended just for people who need to lose weight, or people over 65 who lack certain nutrients, it’s a revolution in nutritional delivery that is meant for everyone.

It’s also worth mentioning that being in the consumer space puts Soylent at a distinct advantage in trying to meet this goal. When you are B to B, all you need to do is prove your product can save substantial time, money, etc and you’ll be flooded with orders. In business, the “eww that’s weird” reaction is much easier to overcome with data.

I’m sure there’s been at least one company that’s gone from 0 to 600 million in 5 years in a brand new industry they created, I just can’t think of who that would be.


#12

Not all countries are growing at a rapid rate that will cause mass starvation anytime soon. This is just one article on population growth but they all show the same statistics. http://www.washingtonpost.com/blogs/worldviews/wp/2013/10/31/how-the-worlds-populations-are-changing-in-one-map/


#14

I’m talking 3 or 4 generations down the road when we have 20 billion mouths to feed. Unless something like soylent becomes the dominant way of feeding the population in the next 10 years I personally have a bleak outlook for the prospects of feeding all of those people equitably. Our current track record is appalling. We have small proportions of the population living in opulence while 30% of the food they produce to feed them is thrown away to keep profits up. In the meantime people are literally starving. That’s now when we could theoretically feed everyone using traditional means. Imagine how much worse it will be when we hit the wall when we discover traditional food production is unscalable. There are serious reasons to implement population reduction if we can’t feed everyone. But who wants to be the guy who signs off on that? They would surely rather change the nutrition model, especially if it’s cheaper and better for us. The flow on effects to healthcare alone would be worth it.

This is why soylent has two natural enemies in the corporate world: “big food”, and “pharma”. The latter will always protect it’s turf, even if doing so creates a less healthy population. The only way I can see soylent surviving as a concept to benefit humanity is for rosa labs to become so successful they can survive the coming war between food and drug corporations.


#15

Are there any articles on soylent currently out there that actually discuss the issues that the existence of a product like soylent should be bringing up? Or are they all like this guys and some of the other incredibly scary crazies I’ve seen? I’d love to be able to read one that actually talks about the very things that @unsynchronized is bringing up.


#16

We are a very long ways away from hitting 20 billion. Pointless to try and speculate on how we will feed people that far into the future. By then we may have something like the food replicator from Star Trek. It does bother me though that we have the ability to feed, clothe and shelter every human on earth but greed and nationalism stop it from happening.


#17

Rosa has practically handed the media the dystopian-future-is-here angle just by naming it Soylent. That’s just too juicy to pass up. I think it’s brilliant. No other product in this category will ever get press like this.

I’m sure that the media will wring this angle for all it’s worth before bringing in opposing views that talk about the benefits of Soylent, supported with facts. That way, they can get the whole “Maury Povich” discussion going, pitting one side against the other.

It makes for good content, and it means Soylent will be in the news for a long time to come, which I think is a really good thing.


#18

does anyone know how many soylent backers there are?

There will be some people who do not reorder, and there will be new customers because of recommendations of friends. but it is unclear how many customers there will be in 3 to 5 years.

However, the number of customers could drastically increase by making soylent available through large distribution chains like amazon or best buy. so 300.000 people (0.1 percent of the U.S. population) might be in reach.


#19

Appx 24,796 backers.


#20

And that doesn’t count partners and family members that may be sharing an email account.


#21

And that was before anyone had seen a product. I bet they get to 100K after the first year when all the friends and relatives start seeing the results this holiday season.