In their 2019 book “The Making of a Democratic Economy,” Marjorie Kelly and Ted Howard pose a provocative question: Why not use the U.S. Federal Reserve System to buy up all the nation’s oil companies and close them down? The goal: to dramatically decelerate climate change and jump-start policy and investment in sustainable energy.This may sound like an absurd idea with a hefty check (the top ten U.S. oil companies are valued at about $500 billion). However, the U.S. government has committed to spending over $6 trillion on the coronavirus crisis, and that number could go higher. What if we spent the same amount to prevent the climate crisis?I sat down with Josh Hoffman, the CEO and co-founder of Zymergen, to ask him this and other questions to get his perspective on the emerging bioeconomy. If you haven’t heard of it, Zymergen researches, develops, and manufactures microbes for Fortune 500 companies. Utilizing a combination of biology, machine learning, and automation, its products range from electronics materials to agricultural solutions to personal care products. Zymergen was founded in 2013 by Josh Hoffman, Zach Serber, and Jed Dean with the mission to revolutionize the way products are made. Using nature’s tiny organisms, Zymergen has since made over 1 billion pounds of products.

Can we talk about the oil industry? Can we buy out the oil industry in California, and ask them to leave the oil in the ground?

It’s important to take a historical perspective. Human welfare has increased incredibly because of ingenuity and cracking and using hydrocarbons. Modern materials, modern medicine - all these things are outgrowths of the petrochemical industry. I think it’s important to recognize that.It’s also important to recognize that these advances in human welfare have also come with a list of problems we now need to solve. For example, increased agricultural productivity means that we can feed the world, but it also means that many people are now morbidly obese, and the amount of people suffering from diabetes has increased to a point at which it never was before. And there has to be a fierce urgency to solve these problems now.Our planet is on fire. Climate change is the biggest existential threat. And in a moment like this, with COVID-19, it is easy to forget all of these problems.I love the poetry of keeping the oil in the ground—it's a wonderful idea to think about. But it is wholly impractical. So many things we need and use today comes from oil and gas, and I think we need to figure out a transition. The way we think about transition at Zymergen is to give people better products.Here is a real lesson from the first-generation biofuels companies: the market is not going to pay you for the sake of being green. But they will pay for something better. So our approach is, “How do we make things that are better and disrupt the economics of petroleum?”

What do you think of Marc Andreessen's piece, “It's Time to Build,” and the role of the VC community in the bioeconomy specifically?

I think there is a tension between what Marc writes and reality. VCs look for a five-year path to liquidity. Five years to invest, five years of return, and one year of extensions, so eleven years at most. That timeline is tough for some of the markets that Marc is talking about. I think it’s an admirable spirit, but I d0n’t know what you do with it.If you want to build stuff, you need to know something about the real economy. You need to make sure you have time horizons that allow you to invest, and that you’re not necessarily investing against previous patterns, like seeking the Uber of haircuts or the SAS of human resources. There is a wall of capital out there, and we need places to put the money. But we need to get away from the recursive problem of “I need to see a path to exit in five years.”Take Salesforce as an example. Marc Benioff created the most successful enterprise software company of the decade. Do you know who the VCs were? Nobody, because Marc couldn’t get anybody to write the check. It was an unlikely idea with a very different model. I believe the same is true for the bioeconomy: big disruptive platforms tend to be stuff that falls outside of what mainstream venture firms do. We are all comfortable doing what others have done, but it’s pretty lonely to be out there doing your own thing.

What advice would you give to somebody trying to raise capital/investments in the bioeconomy?

What we did well at Zymergen was to find ways to generate revenue early. Validate your product or service early. Another point is to play the long game. This is a slow and steady race. Don't hype yourself up too much and raise money on unsustainable plans. Biology is going to help rebuild the world, but it will take a while to rebuild, so do not go out there saying you can do magic.

If you were on California Governor Gavin Newsom's task force looking for medium to long term policies to set California on the right path for the next 50 years, what policy recommendations would you make to him?

First, I would continue investment in the UC (University of California) system. The Bay Area has top universities that are truly world class and you cannot underestimate the value of that. I think it is important that the state does not lose its distinctiveness that comes from having these top universities.Another might be a state-mandated purchasing of bio-based goods, modeled after the USDA BioPreferred program. The goal of the BioPreferred Program is to increase the purchase and use of bio-based products. So for example if the Department of Education needs carpets, there would be a requirement to buy bio-based carpets. This would be a simple, effective way to help establish the biomanufacturing industry. A California BioPreferred policy is something I would love to see, it sounds like a wonderful idea.Third is housing costs. It is very expensive to live in this area and hard to get people to come work here. I especially worry about young people being able to come and work here.(end of interview)The U.S. bioeconomy is estimated at about $1 trillion, with a potential size of about $1.4 trillion (about 7.4% of the entire U.S. GDP). With San Diego and the Bay Area being two of the three life science hubs in the nation, it is important to make sure that money, talent, and government policies help continue to drive the bioeconomy forward. With pandemics, climate crisis and food security continuing to threaten our livelihoods, synthetic biology is not just an investment opportunity. It may be the key to solving our most pressing problems.Follow me on twitter at @johncumbers and @synbiobeta. Subscribe to my weekly newsletters on synthetic biology. Thank you to Stephanie Michelsen for additional research and reporting in this article. I’m the founder of SynBioBeta, and some of the companies that I write about—including Zymergen—are sponsors of the SynBioBeta conference and weekly digest — here’s the full list of SynBioBeta sponsors.Originally published on Forbes: