S8E96: Jonathan Murray / Adapt Agtech - From Banker to Farmer: Ottawa's Thriving Tech and Farming Scene

[0:00:02] Harry Duran: So Jonathan Murray. That's the Beauty podcasting. Jonathan Murray, co founder and CEO of Adapt AG. Thank you so much for joining me on the Vertical Farming podcast.

[0:00:14] Jonathan Murray: Thanks for having me, Harry.

[0:00:17] Harry Duran: Sounds like you've got a lot on your plate today. So what's the day in a life like?

[0:00:24] Jonathan Murray: Yeah, great question. Every day is different. We're ramping up the team. So a lot of onboarding lately. Today was meeting with some chefs, meeting with a culinary school, call with Investors podcast. Now major retailer call after this. So a lot of different areas, a lot of different sectors, but we're scaling up the team. So it's exciting that a lot of things are moving kind of uphill without my direct input lately, which is awesome to see.

[0:00:55] Harry Duran: Yeah. Where is home for you?

[0:00:58] Jonathan Murray: I'm in Ottawa, Canada, specifically Carlton Place, which is a small town outside. I spent the better part of a decade in Toronto until the start of COVID and my wife and I, we wanted to slow down and move to a small town and have a backyard for the dog. And so we've become way busier, but at least we've got a yard for the dog.

[0:01:20] Harry Duran: Where did you grow up?

[0:01:22] Jonathan Murray: I grew up in Ottawa, so it was kind of coming back home. And I've got family here, so my brother's got three young kids and being able to kind of see them grow up was a major part of the decision to move back. So we're excited to be back in the hometown.

[0:01:36] Harry Duran: I always talk to so many CEOs from all over the world at this point now. So it's always interesting because listeners are getting a feel for these different parts of where people have grown up. So for people that are not familiar with that part of the world, what was life like growing up there?

[0:01:52] Jonathan Murray: So, Ottawa is the capital of Canada. Major government town. So very stable, but a lot of people consider it quite sleepy. And if you have traveled the world, I think that you would agree with them. We do have Silicon Valley north, they call it. So Canada, which is just outside of Ottawa. It was kind of the starting place for Nortel Networks. We've got major Nokia offices here. BlackBerry, when BlackBerry was a thing and kind of from that cohort of telecom companies. After that boom went bust, some companies like Shopify were born. So Shopify is an auto based company and then there's a whole ecosystem around Shopify that exists now full of amazing, mostly software founders in the region. And it's pretty great tech hub.

[0:02:50] Harry Duran: So you got your start in banking, is that correct?

[0:02:54] Jonathan Murray: Yeah, my first role out of school was in banking. During the financial crisis I worked for good timing. Yeah, it was great. And I thought like, oh, maybe I'll be in banking, maybe I'll need to be an investment banker. And it was like, yeah, no, definitely not. This is not fun. Quite candidly. I was in collections, so it was bad time. It was a part time job I had in university nights and weekends that morphed into a little bit of full time. And then from there I moved into clean tech and kind of bounced around from industry to industry from there. So from banking I got a role at a clean tech company called Clearford, which did wastewater collection and treatment. So you talk about kind of speaking of founders all around the world and kind of making their way back home. I traveled so much in my early days, early days of my career, like India, China, South America, and my mom was always worried that I'd end up halfway across the world. And she's like, no, just start your family in Ottawa because I made my way back to Ottawa. So we did the clean tech thing with them and then from Clearford moved over into the marketing side and worked for a defense company called Senstar.

[0:04:12] Jonathan Murray: And I was in my early twenty s, and I have no idea how I got the role, but I became the director of marketing for their company. So I managed offices in seven countries around the world for them, went through a full corporate rebrand. I think it was just that they needed a completely different view of what they had been doing before. And they were like, let's bring in this young kid who knows first with social media and he knows what that is and he can get us YouTube videos. I think the pointed question that I had in my interview was like, what do you know about Co? And I was like, what are you talking about co with the search engines? I'm like, oh, search engine optimization. They're like, yeah, how do we get to the front page? And I'm like, oh, this. And I listed off a couple of reasons. They're like, okay, yes, you're hired. So that was fun. And so I did Water, then defense, and then wanted to get back into the sales side of things. So marketing, giving tools to the salespeople was great, but I'm definitely more of a front lines person. And so I looked, okay, what are the most challenging kind of sales sectors that we can get into?

[0:05:24] Jonathan Murray: I didn't want to go back to banking, and when I did a Google search, the next on the list was Medtech. And so I jumped into Medtech, joined a company called Stryker, one of the biggest companies that you've never heard of until you hear about them, then you see them everywhere. So they're into everything like beds and stretchers, operating rooms, things like that. So I got into a division called Endoscopy, which was minimally invasive surgical devices, and ran the Toronto region for that with some colleagues for about ten years. There water. Defense. Medtech now farming.

[0:06:01] Harry Duran: What was your take on being experienced to the outside world? Because in that clean tech space. You mentioned you started traveling and seeing other parts of the world. I imagine it was like your first experience being outside of your familiar hometown. Do you remember, if you can think about what it was like to start to an experience for other cultures, other ways of living, how? For me, I remember it's the first time I went to Thailand, I was just like it just exploded my mind. And just the concept of a language that wasn't even the romance based languages. It was completely something different. So I'm always curious when people have that experience for the first time what it does to the senses.

[0:06:44] Jonathan Murray: Yeah. So I've always been in search of travel. My dad worked for telecom companies here in Ottawa and when I was a kid, he'd spend time in Taiwan and Saudi Arabia and all these places. I always had that bug. My favorite place as a kid was like I mean, for two reasons. One was it was the airport because I'd be go there to pick up my dad and be like, oh, Dad's home. But then just the fascination of, like, people in this building tomorrow will be all around the world. Like, it was such a crazy thing in my mind as a kid. So I've always had that travel bug. So in school I did international business. Spent nearly a year down in Chile, learned Spanish to kind of get circle back to your question about traveling for work. It wasn't my first time traveling, but it was my first time seeing cultures that weren't necessarily developed. And the areas I was going to, I was working for a sewer company and I was going to areas that didn't have sewers. Wow. Right.

[0:07:46] Jonathan Murray: And going to those types of regions was quite eye opening. Understanding the size of the world was kind of an interesting thing. I think there's a lot of people in the city of Ottawa or the city of Toronto and then you go to Mumbai and it's like, there are so many people. Go to Shanghai. Oh my God, there's so many people. So I think that helped me open my mind to thinking about the scale of solutions that need to exist to tackle the biggest problems. Solving your hometown is great, but once you solve that, how can that affect a billion people in a different region?

[0:08:30] Harry Duran: What was it like? You mentioned how much of a hub Ottawa was for technology and communications. Did you get to experience or see what it was like? Because obviously there was a point in time where everyone in the world had a Blueberry or BlackBerry. I remember because I was in corporate for 20 plus years. I worked in banking. So it's just like I had the little BlackBerry holster. It was just like a way of life. Right. And then at some point, it was interesting to see from our perspective, like, how they were falling behind. And Apple enters the scene. And I'm wondering if you being from there, if you got to experience firsthand what that was like to kind of sort of be at the pinnacle of the world of technology and communications and then not be.

[0:09:16] Jonathan Murray: Yeah, I was probably a little bit too young when the Nortel kind of crash happened, but as a kid, normally you're sheltered from that in general as like a kid. But it was like I was playing hockey and the parents on the hockey team, it was palpable as a change. It was like, oh my God, what's going to happen? And so seeing that type of boom bust, I mean, it's kind of happening right now with a recession. It happened in 2008. The telecom bust kind of happened around the.com bubble. So it was 20 years ago, 23 years ago now. But the whole dynamic of the city changes, right? And then it takes a decade to get back up there. In the case of Ottawa, it took shopify to really build the city back up from a tech side. Thankfully, Ottawa, it's a government town, didn't really affect the economy of the city too much, the housing prices, like the federal government's here. But yeah, it's it's very, it's a challenge. And now being in in industry, in kind of as a leader of an organization, having those thoughts go through my mind of like, I've got the responsibility of my team. How do I put them in a position where they're secure? Putting them first is critical.

[0:10:49] Jonathan Murray:

And so it's definitely something that I think about all the time. All the time.

[0:10:53] Harry Duran:

Is there something in the water in Ottawa? Is there an entrepreneurial vibe that just runs there? Because it seems like there's a lot of maybe disproportionate amount of companies that have gotten started. Is there something about the culture there?

[0:11:08] Jonathan Murray:

I think that the ability let me go back a step. I think that having seen a company achieve success right, makes you feel like you can do it too.

[0:11:20] Harry Duran: Oh, yeah.

[0:11:21] Jonathan Murray: And so there's also companies in Ottawa that many people have never heard of that have achieved unicorn status, right? Like, I'll call it a couple, like Full Script, an incredible company that's a marketplace for Naturopathic doctors that basically runs all of Naturopathy across North America. Might not have ever heard of them. Ottawa Company. Shout out Kyle Bratz. Then there's ascent, compliance. My co founder here at Adapt was the technical co founder of Ascent. And there are supply chain logistics software and compliance software. So if you think about RollsRoyce, how do they make sure that their minerals they're using in production are not coming from conflict zones? These really niche challenging problems can be solved with software. And like, Rob Imbo was one of the co founders of that company. And so I think there's just a skill set that comes with having a large corporation like a Nortel that goes bust and then you still have the staff that are incredibly skilled, and what do they do? They become resourceful, and they start their own thing, and one thing leads to another, and they build companies.

[0:12:32] Harry Duran: Yeah. So you were at Stryker. I'm curious what starts going through your mind and the transition into forage, like, how that starts to happen.

[0:12:42] Jonathan Murray: Yeah. To be blunt, I just felt like I was working so hard for another company. And in a sales role, striker is fantastic. It's uncapped commissions. It's very exciting. But if you grow your territory too much, they add a rep to your territory, they split your territory. So I just felt like if I worked as hard as I was working for Striker, for myself, that I could do something pretty cool. That was the primary driver, is like, I think I'm ready to take a chance on myself sometimes. I say that it took me 15 years to unlearn how to be an employee and to take the risk on myself and be an entrepreneur. So that was a big part of it. And so getting into forage so forage hyperfoods was the original company that we started. So it's a wellness company in mushrooms, obviously. And we identified a kind of gap in the market where a lot of the products on shelf, especially in Canada, were powders. A lot of those powders were being imported and copacked from China. And these mushrooms exist in Canada.

[0:13:55] Jonathan Murray: Like, why aren't there Canadian products being put on the market? This doesn't quite make sense to us. And so we jumped into that, quit everything, moved, lived in a rural motel in northern Quebec, worked on taking over kind of a network of wild harvesters in Ontario and Quebec to build out forage and receive all these wild harvested mushrooms. So chaga, turkey tail, reishi, and then some lions, Maine. And when you're put in a position where the only thing you can do is drive forward and win, you get scrappy. So Chanel and I started doing that. We started doing quite well. We launched Forge as a brand, so Forgehypefoods.com vertical, 20 for, 20% off. And so a colleague of mine, Shane, said, you guys are doing pretty well. Why don't you raise some money? Why don't you grow this? And I was like, oh, okay. I don't know how that all works. Let me learn this. And so you go down the rabbit hole of understanding venture capital and fundraising.

[0:15:06] Jonathan Murray: And that's kind of when I met Rob, my co founder at Adapt. And we had breakfast, and he said, yeah, what you're doing is pretty cool, but what would you do with a lot of money? How could you solve a bigger problem? And I said, well, I think I'd do this. And we talked about gourmet mushroom farming and AG tech, and I'd been interested in the space for a long time. I interviewed with a couple of companies and met with a couple of founders over the course of the last decade just never was a good fit. And Rob was like, Why don't we just do that? What? Really? Yeah. So he was an angel investor to start and joined as a full time volunteer. And over the course of the next year, we built out our MVPs. We launched Market, we signed up a couple of major retailers, and it's led us to today. We did a small VC round recently. Rob's on full time, and we're starting to scale up our team.

[0:16:10] Harry Duran: What was the biggest learning curve for you? Maybe in moving from Striker into the mushroom world itself, because that's its own thing. Education. The medicinal properties of it, how to market it, how to package it, how to source it, get it to folks, reliably, and then another world opening up when you get into the Agtech space.

[0:16:35] Jonathan Murray: Great question. So my first boss out of school very early, gave me a lesson. He said, It's not that you're stupid. You just don't know anything yet, but you'll learn it. Right? And so I've always kind of had that mentality going into new industry, and, like, how do I learn about this as much as possible? So, for Stryker, I don't have a medical degree. I don't have any medical background. Like, my brother is a kinesiologist. I have nothing. He's a sales guy. Right. So how do I learn? And that's when I really started digging into peer reviewed journals and studies associated with sports medicine. Repairs, different anchors, different the composition of implants.

[0:17:18] Jonathan Murray: Right? Like, what's hapla. How does that reabsorb into the bone? Right? How do these complex concepts, how can I use that to my advantage? To get in front of surgeons and get in front of doctors? And I took the same approach to mushrooms. So first step was, let's do the research. A lot of anecdotal evidence, right? Like, mushrooms are great, cool. But are they? Let me dig into the peer reviewed journals. Let me understand what the values are, what the benefits are, how to get those benefits from those mushrooms. Right? It's not about taking some turkey tail off a tree and eating it.

[0:17:56] Jonathan Murray: It needs to be extracted. How does that get extracted? Well, you dig into research, you dig into these papers, and you find, okay, that's the extraction mechanism. Then I actually reached out to one of the researchers at the University of Beijing and said, hey, you sourced this type of extraction. Where'd you get this device? Well, this company out of Germany. Okay, let me contact them. One thing led to another yeah. Going down this rabbit hole of, how do I get access to this? And so now we have wild harvested products that we send for third party lab testing, confirming the active compound levels of polysaccharides and betagucans. How do we extract that? Dual solvent extraction with ultrasonic assistants. Then we put it into bottles, then we get it tested, and then we get it on the shelf. And in between, you're regulated with Health Canada and Canadian Food Inspection Agency and all these different kind of governing bodies that try to slow you down as much as possible for the safety of everybody, obviously, but it's just hoops to jump through. And once you get to that other end, there's great opportunities.

[0:19:02] Jonathan Murray: They make it really hard on you. Yeah.

[0:19:05] Harry Duran: And I guess when you're in the world of medicinal or mushrooms that are for the, for the purposes of like, improving people's health, you know, there's a lot of claims that are people making and a lot of huge concerns about sourcing packaging, efficacy, all this sort of stuff. And it sort of becomes a wild, wild west at some point, obviously, because you can make any claims and as the consumer, you're left to just sort of fend for yourself. And it's a pretty bottle. It looks like it has all the right ingredients, but you don't know where they're sourced from and how effective they're going to be in dosages and all that stuff. So there's a lot to learn. But it seems like you sort of had that mindset about how to tackle this problem from what you mentioned at Stryker. And so it's interesting how you brought that to bear here and just kind of keep peeling away the layers of the onions like, okay, if this is coming from there, where did they get it? How do I use that? And kind of putting all the pieces together, which I think is fascinating, for sure.

[0:20:03] Jonathan Murray: It's also very different between Canada and the US. In Canada, or sorry, in the US. As long as you say this hasn't been reviewed by the FDA, you can say whatever you want. Right? We didn't say the FDA approved it. In Canada, it's different. Right. Like, if you want to market a natural health product, you have to produce it at a Health Canada site license facility to get that. A lot of red tape. And then every single product needs its own natural product number, NPN, to get through that. It's a long process. And then once you actually have that product, actually can't make any claims. You just have to hope that people know what the product is, right? So that's something from a marketing and kind of retailer perspective is like, what can we say? Can we put up signs?

[0:20:49] Jonathan Murray: Like, no, you just kind of have to have it set on the shelf. And then you go kind of upstream of educating people and hoping people learn more about the product. And that's where rising tides raise all ships. It benefits us. So the fantastic fungi movie or movies on Netflix where people are really learning about the benefits of this is helping us. Right? People see the product on the shelf, they say Lions main. Okay, well, I saw that on that Netflix show. Let me Google it and let me figure it out. But on the package say too much in Canada. There you go. Yeah, exactly.

[0:21:21] Harry Duran: So for people that are new to the space and this will get us into the present time, how do you describe or how do you talk about the benefits of mushrooms for newbies?

[0:21:34] Jonathan Murray: Yeah, so I was never a mushroom consumer from a food perspective as much as I obviously am now, because I didn't have access to creative ways to cook them. Right. I had white button mushrooms in the supermarket, and that's what I thought mushrooms were. Now that my mind has been blown with all the different varieties, all the different strains, we're learning about all the different cuisines they're part of. We're being exposed to these incredible recipes with chefs. The way I talk about mushrooms from an adapt side is that they are a building block for a meal. Right. And it's much different as an ingredient in food production than, like, leafy greens and things like that because it can be the focal point of a meal. That's really what I talk about. We've also heard from retailers that they consider it closer to, like, a meat alternative in their stores than a produce. They don't think that we're going to compete with white buttons. They think we're going to compete with impossible burger. Right. And we're actually seeing that in real life. We're seeing that feedback on socials.

[0:22:51] Jonathan Murray: We're seeing that feedback from different restaurants. We activated a new restaurant in the city of Toronto called The Butcher Chef. As you can imagine, a lot of meat at The Butcher Chef, and they're using mushrooms as an entire dish. It looks like a bouquet of mushrooms, and it's a standalone main course. That's pretty incredible to see.

[0:23:16] Harry Duran: So you talked about this understanding of how to forage the mushrooms for the work at Forage and how to source them. And now this is a little bit different with adapt because you're actually growing them yourselves. And so what were some of the changes? Or how was the thinking different in terms of, like, I've got to go find and see where the best source of the mushrooms that are wild harvested for the work I'm doing at Forage Versus, I now have to grow them myself because that is the product that I'm offering. And I'm wondering what the thought process is around that.

[0:23:53] Jonathan Murray: Yeah. So at the end of the day, it comes down to producing the best product. So for forage the highest levels of active compounds, that was what our goal was. And in a natural environment like wild harvested northern forests of Quebec and on Ontario, those mushrooms like reishi and turkey tail and chaga, they're occurring naturally. They're pulling nutrients. And all these compounds from nature and through testing, we determined that that was, in fact, a correct hypothesis. Those have higher compounds. When it came to consumable mushrooms, it's not about active compounds. It's about freshness. Right. Like, how can I provide the freshest, most consistent, and the tastiest product to either chefs or consumers. And that's where we started from a model perspective, was freshness and consistency. So that's how we led into the container farming model for mushrooms.

[0:24:49] Harry Duran: And so to bring people up to speed and for folks who may not know, can you talk a little bit about the business model and what the current offerings are? For?

[0:24:58] Jonathan Murray: Sure. So adapt. We are a producer of gourmet mushrooms. We operate in a hyper local environment from our containers. So our units are typically located in dense urban environments. Downtown Ottawa, Toronto, Vancouver, Bars, austin, Texas. And we're launching into different regions now, and we fruit the mushrooms as close to customers as possible. So our operators on site harvesting daily, making daily deliveries. But then we're vertically integrated from a substrate production perspective, where we deliver those blocks to those containers so they're not doing everything in the container. We take all the complexity and kind of the high risk activities and perform them in a central location with our lab. So it's hub and spoke.

[0:25:44] Harry Duran: So talk a little bit about that lifecycle and how mushroom goes from the substrate. Maybe if that is the start, if it spores, how that makes its way along its journey into the container, and then total time in the container harvesting what that process looks like, manpower needed to get that done just for people can get a sort of like, end to end lifecycle vision of what that's like.

[0:26:11] Jonathan Murray: Sure. So the lab process is petri dishes in mycelium, right? So we're cultivating on agar, moving that into grain spawn that's been sterilized. Well, grain that's been sterilized, that gets converted to grain spawn. Once the mycelium takes hold, then that goes into substrate, which is a combination depending on the strain, anything from soy and hardwood to coffee to coconut choir. I won't reveal too much about what we're currently using per strain, but we're actively testing to ensure the highest yields all the time. Once that's colonized, after a few weeks, and that depends on the strain, whether it's lions, main oyster, shiitake, takes months. Once it's ready to fruit, then it gets put into that controlled environment in that container and grows the mushrooms. So we're taking a different approach than a lot of AG companies. And it's not better or worse, it's just different that we're not trying to eliminate people from farming. We want to actually bring more people into agriculture. Right. There's a big problem, and we can touch on that afterwards. About the average age of a farmer in North America is very high, with very little transition plans for these existing farms. But how can we create a process that is easy to bring new people with very little experience into our circle to create agricultural businesses?

[0:27:47] Jonathan Murray: In Canada, we're seeing a lot of, like, I like to call them cannabis refugees, where people have been a grower in one of these large companies that have kind of dissipated, and they're looking to apply their skills in a different way. And so for us, like, coming into a container, it's actually so much easier to grow mushrooms in one of these containers than it is to grow cannabis. Like, cannabis is very complicated. You have a little bit of molder or mildew, you're done whole crop harvest. For us, we just control the environment. We've got mobile apps set up, and they just wait for the mushrooms to grow. And most of their time is spent with our customers. Right. So we're a customer focused business. That operator, they're spending maybe an hour or two a day actually on the mushrooms and predominantly harvesting.

[0:28:34] Harry Duran: Okay.

[0:28:34] Jonathan Murray: So most of the other time, they're either making sure that we're doing our global gap checklists, cleaning all that certification that we need, and then spending time with customers, making deliveries, activating new customers, selling, growing that territory, educating consumers. So that's really where their time is focused.

[0:28:55] Harry Duran: Talk a little bit about the model. Is it a hybrid model where some of these are adapt owned and operated? Are these independently owned? Is this like a franchise model? Do people take ownership of the container and then you support them for anything they need going forward?

[0:29:11] Jonathan Murray: Yeah. So what's great is we're early enough that we're exploring everything. We are definitely owning and operating in major territories. So like a Toronto or Miami or an Austin or something like that, where we're owning the container, we're hiring our operators, and they're selling into restaurants with that. It creates an opportunity for people to essentially build a business without the risk of having to put everything behind it. Our operators have uncapped commissions. You want to grow your territory? We'll add another container in Ottawa. Went from a 20 footer to a 40 footer. Now we're talking about a second 40 footer or operator here. Right. And we're not capping this. Grow your territory, grow your business. We just want to support you in other regions, maybe smaller locations that wouldn't necessarily make sense for us to own and operate. We're definitely open to selling the units and supporting them in a way.

[0:30:06] Jonathan Murray: I like to stay away from the term franchise. There's a lot of rules and regulations and laws around franchises. So we're not franchising, but I like to say we're creating a platform. And so this is going to be a callback to earlier in our conversation about shopify. So shopify created a platform for people to be able to start businesses really quickly. Right? So I want to start an online store. I don't need to code anymore. I don't need to build my store. I don't need to spend hundreds of thousands of dollars for a developer to do this. It's a plug and play, and that's what we're doing for urban agriculture. We have a model that we can plug this unit in, and within seven days, we harvest our. First batch of mushrooms. And that's a real timeline. And so for an operator to come in, we just need to make sure they're willing to put in the work.

[0:30:52] Jonathan Murray: They're willing to understand what it takes to be a farmer. And if they are, let's set them up for success. We'll give them the tools to do it. What's interesting from a mushroom perspective, Harry, is that we're seeing a lot more existing businesses reaching out to us. So someone's a small grower in a location, they're saying, listen, I got into this to grow mushrooms. I didn't get into this to be in payroll and deal with it. Right. And work on supply chain logistics. I just want to grow mushrooms and deliver to my community. So I've got an existing client base of 30 or 40 customers. Do you want to come in and we'll use a container, you can supply the blocks and I can keep running. And that's what we're seeing as a really interesting thing. And I'm glad because I didn't want to be perceived as a business that's going to eliminate small growers, but I want to enable them to grow bigger. Right. So for a lot of these individuals to get into a major national retailer would almost be unheard of.

[0:31:52] Harry Duran: Right.

[0:31:52] Jonathan Murray: It wouldn't make sense to go through the process of global gap. It wouldn't make sense for a retailer to say, hey, you're operating in Arm, Prior, Ontario, Canada. Yes. You can supply to that laws. Right. But with our model, we're now in Law loss, we're now in a major retailer. We're in, we onboarded with Longoes and we're meeting with Costco Canada. We're meeting with these major retailers and they're saying, okay, well, you can activate this next region as long as they're following your SOPs as long as they're following your processes, they can start putting products on the shelf. Right. And we can all enable them through the same EDI system and work with you that way, which is an incredible opportunity for existing mushroom growers.

[0:32:35] Harry Duran: What's an investment look like for a first time farmer who's looking to partner with you guys?

[0:32:42] Jonathan Murray: It depends. So I'll talk about timing. Right. So your investment is like, this needs to be full time. This is not a hobby. We're not looking to place a container for someone to be working nights and weekends. This is our everything. And so the Commitment is willing to be an entrepreneur in your own right and put in the work to build your business. That means things are going to go wrong. You're going to have to work on solving them. That means harvesting on the weekends if the mushrooms are ready to harvest. So the Commitment is willing to become an entrepreneur. And the upside is we'll help you grow your territory as big as you want. Right.

[0:33:23] Harry Duran: And talk about your entry into the States. I know you mentioned Austin and what are plans for that look like?

[0:33:30] Jonathan Murray: Yeah, so Austin, we've launched our container. We're operating there. We looked at Austin because it's one of the furthest locations to operate. And so as we were going through some of the fundraising investor conversations, they're like, yeah, but when you start to go to the States, you're going to have your eyes opened, or once you get too far away from your central hub where you can't drive, if something goes wrong, I think you're going to run into problems. So the intention behind that deployment was, okay, you know what? We'll go as far away as possible and we'll prove that it still works, and then we'll work our way back. And so that's what we've done. So, operating well in Austin, we harvested our first cycle seven days after the container arrived. We're adding new customers weekly, and the team there is great. And now we're looking at expanding to Dallas and then working our way up back into, like, Nashville and closer to Ontario. It was a great deployment. Yeah. Very few challenges. Shockingly. Except for delivery of the container.

[0:34:41] Jonathan Murray: We had to take down a fence. Yeah.

[0:34:48] Harry Duran: When folks, when these finally make it to market, are they Adapt branded mushrooms? Is that what the pack is? That packaging shows up? I'm just curious, through all the installations that you have, when they make their way to the customer's plate, do they know that they're eating adapt mushrooms?

[0:35:09] Jonathan Murray: So we don't ask for that. Some chefs give us a nod, and they either have Adapt grown mushrooms on them. A chef here in Ottawa calls them the 550 mushrooms. I saw that they're grown 550 meters away from his restaurant. In retail, we have a different brand called Hardy Foods.

[0:35:31] Harry Duran: Okay.

[0:35:32] Jonathan Murray: Hardy with two E's. And really the reason why was because Adapt AG didn't sound like a really consumer facing brand. Right. So if we're going to be in retail, we wanted to change the way the mushroom aisle looked. Very colorful packaging, QR codes with recipes on them. So Harry Foods is our retail brand, and Adapt is really more like the technology and kind of platform side. And then for chefs, they get boxes of mushrooms. Right. We don't have our logos plastered over it. Our goal is really to enhance and promote our customers and our chefs as opposed to pushing our brand too much. So if you do follow us on socials, I think they're all adapt to AG tech, whether it's Instagram, Twitter or Facebook, LinkedIn. And you'll see a ton of videos that we're producing for our chefs.

[0:36:24] Harry Duran: Okay.

[0:36:24] Jonathan Murray: Right. Not a ton of like, hey, look at me. Look what I'm doing. It's like, look at what our customers are doing. Look at this meal that RenRe Rodriguez is producing. Look at this amazing meat alternative dish that this chef came up with. Or Chef Joe from Coconut Lagoon. And we're exposing people to all these different cuisines from all around the world that have mushrooms in them and like, let's elevate them, right, and not us because it's a trickle down effect. I'm not naive that if their restaurant does well and people order the mushrooms that our volumes will go up. But my goal is to elevate them and provide our customers opportunities to grow their businesses.

[0:37:01] Harry Duran: That's helpful to understand. Thank you. So forage was your first venture as CEO, is that right?

[0:37:08] Jonathan Murray: Yes.

[0:37:08] Harry Duran: And now Adapt is your second. So what are you learning in terms of leadership and how has that changed over the years and just kind of bringing us to present day? What are some of the, AHA, some of the challenges you're coming across as you grow this company?

[0:37:27] Jonathan Murray: I think the biggest learning has been managing emotions. That's one big thing at Stryker, you're a lone wolf, you're a sales rep, you're out there, right? And so if something goes wrong and you get in your car and you're like, oh, I wish that I had won that deal or something like that, you can express that because you're expressing it yourself when you're managing a team that permeates through the culture of the organization. And so just understanding how to recognize what's an emergency, what's not an emergency, right? And I'll have things come up and to me it's like, this is not a big deal. We'll solve that problem, we'll cross that hurdle and it's like water off a duck's back. And then for the team members, it's like, oh my goodness, how do we solve this? And so becoming a leader and giving them that kind of calming factor has been something that I've been actively learning and trying to get better and better for. I'm also willing to do whatever it takes to win. So if I need to go in nights and weekends and scrub a floor, I'm going to do that. Right. I'll never ask our team to do something that I haven't done. Our container, when we first launched our first containers in Ottawa and Toronto, I was running them nights and weekends when I wasn't doing my day to day stuff. And I did that for months, right? Delivering to chefs, delivering to restaurants, making sure the model worked before we took the risk of hiring somebody and then being responsible for their daily income and their career.

[0:39:08] Jonathan Murray: So now that we're in market, now that we're expanding, the challenges that they're seeing, I've already seen. And so I can give them that learning. And so I'm a lead from the front type of leader, so that's what I'm doing. And in this stage of company, I think there's multiple stages of a company. We're in the Marine phase. We are groundwork in the trenches. We need to grind it out. And that's really where I think that from a leadership perspective, that's where my strengths lie. If we get so big that it's more of a kind of maintain, might not be right person because I'm always going to try to drive for growth. Always going to try to drive for bigger and better.

[0:39:50] Harry Duran: Where do you draw inspiration from?

[0:39:57] Jonathan Murray: I'm a big sports guy, so I apologize if I've been using, like, cliches because I grew up with the post game interviews of hockey players like pucks in deep and just got to get pucks on the net. But I try to be the best version of myself and I try to look at how big things can get and how much we can do from inside first. I can't remember where I heard the quote, it wasn't mine, but choose your heart, right? Reward or regret. And I'm trying to choose reward every single day and try to focus on how I can make the most of my time. So if you're not drawing inspiration from inside, it's going to be challenging to go hard every day.

[0:40:46] Harry Duran: Have you had mentors in the past that have inspired you or that you've learned from?

[0:40:53] Jonathan Murray: Yeah, my first boss out of school, kind of a polarizing figure now, but he founded Canopy Growth Corp and So multibillion dollar cannabis company. And just having seen his progression from working in startups to being a global leading company again, going back, call back to previous times in this podcast is like, if you see someone do it, you feel like it's a possibility for you. A lot of the times you're looking at these people like, oh my goodness, they must have something that I don't. They must just know something that everybody's just a person, right? And it's just a matter of applying effort and learning and skills. And so I knew him from working in the office next to him being an intern and making Valentine's Day cards for his kids elementary school, to the point where he's running a multi, multibillion dollar organization. If he can do that, I think I can build the confidence up to build something great. So from there, for sure, it's an.

[0:42:00] Harry Duran: Important point to see folks that have done something. It shows you what's possible. It's kind of like the banister with the four minute mile, whatever. Once he did it, there was like, it can be done. And just within the next, I think, couple of months, people are breaking it left and right. It's interesting how much of a mental.

[0:42:15] Jonathan Murray: Shift that is exactly and goes back to the tech center and kind of environment in Ottawa is like, you see a couple companies achieve that, a lot more people are willing to take that risk. And so, thankfully, I saw that early on in my career and I was able to eventually get to the point where I was willing to take that risk myself.

[0:42:36] Harry Duran: You manufacture your own containers, is that correct?

[0:42:39] Jonathan Murray: Yes, we do. That was a big learning curve. We received our first prototypes and the first one came a month late and the third one came seven months late. And even before they arrived, we were like, wow, this could be a completely crippling factor of the business. We need to solve this. And so we launched a manufacturing facility out in Delta BC. And the team there is producing our containers in house. I think there's a multitude of reasons why that provides an advantage for us. We've lived through the challenges of getting a container farm and it not working. Right. And what do you do? You don't have the option of like, okay, I give up let me send it back. It's like we just need to figure it out right. And so every time we've reached a point where it's like this isn't working, we need to figure it out, that's a learning that we have. And so we've gone through we've seen those hurdles so that now when we deploy a farm, we know that it'll work.

[0:43:43] Jonathan Murray: We know that once we plug it in, this will operate and then as we find opportunities to improve, we can do it on the fly. Right. So really we're probably on design iteration like 17 by now, just like little tweaks here and there, right? Like let's move the operating room a little bit bigger. Let's create a backup for gravity power instead of forced water. How do we do this to make sure that we're incrementally better every single time. And then obviously the cost savings and operational expenses and capital expenses associated with that help us tremendously for deployment.

[0:44:23] Harry Duran: It wouldn't be a discussion around expenses if we didn't talk about power, electricity, how that's a big factor. That's talked about a lot in the ACTEC space. And I'm wondering how you think about those challenges in terms of expenses managing that to the extent that you can.

[0:44:38] Jonathan Murray: I'm going to throw out some numbers here, Harry, and you're not going to believe me. Right. Our 40 foot unit here in Ottawa is averaging ten kilowatt hours a day. Like it's pennies pennies a day for operations container in the middle of a harsh winter. Like, we've gone through a polar vortex where it went down to -40 degrees celsius and it still kept chugging like no crop loss. And so we don't require a tremendous amount of lighting infrastructure that leafy green container would. We can operate on a small panel, like 60 amp panel. And so it's a very unique structure of operating containers that is different than other sectors. nagtech right. So much so that we have a real estate partner that we work with called Reef Technologies. That owns and operates thousands of ghost kitchens everywhere. We're using less power for our farms than a food truck.

[0:45:39] Harry Duran: Wow.

[0:45:41] Jonathan Murray: So for us, power is such a non issue that it's included in our rent for these parking lots.

[0:45:49] Harry Duran: That's awesome. So we talked a little bit about the actic space we were connected through the team at Cultivated and I'm wondering what your experience has been as you start to made it to conferences or if you've kind of seen the bigger space of what's happening. I'm just curious about your thoughts if you've started to build relationships or have conversations with some of your colleagues.

[0:46:11] Jonathan Murray: So I know the team at Cultivated well. They're awesome guys. And I think that if someone is looking to get into vertical farming and they don't know where to start, that's a great group to start with. Right. Because they'll help you understand what your limitations are, what your city can, what capacity you can have, what the financial investment is going to be. And they've had experiences with projects all around the world. Great place to start. So I've got a great relationship with them. I'm going to get a little bit out there a little bit more. I am a, you know, let's let's put my head down. I don't, I don't like to be the type of person that asks for credit for work not done. And I just want to grind and deliver a tangible product. And I'm also balancing that reality distortion versus paranoia feeling where if you've read the Steve Jobs book, right, they said if you've got this reality distortion field around him is like, I need a little bit of that to convince myself that I can do anything right and build this. But then balancing that paranoia of like, I'm not working hard enough. Right?

[0:47:21] Jonathan Murray: I need to keep grinding. Like, I can't take a couple of days off and go to a conference. I need to launch another container. Right? And so another adage of like, lazy people do a little bit of work and they think they should be winning and then winning people work really hard and think that they're still being lazy. Yeah, I think that I always feel like I'm not doing enough, but we'll get out there and meet some folks.

[0:47:43] Harry Duran: That's good. What's a tough question you've had to ask yourself recently.

[0:47:50] Jonathan Murray: Um, can I stay focused? The another adage here's, the the post game interview in me, like, the biggest, the biggest threat to a good idea is another good idea. We grow and we sell mushrooms. We're doing a lot of other things, right? But we grow and we sell mushrooms. And we definitely need to stay focused on driving revenue, maintaining our really strong unit economics. But then there's like these little things that keep pulling at me. It's like, yeah, but you could do this and you can also do this, and how do we allocate enough time to explore those? And we don't feel like we've missed out on those opportunities while still maintaining focus and growing the business and achieving the results that we've made commitments to achieve. So that's been one of the biggest challenges, I think, is just staying focused. But so far so good. So far so good.

[0:48:49] Harry Duran: So we're having this conversation twelve months from now. What would need to happen with your progress for you to be happy that you're on the right path.

[0:48:59] Jonathan Murray: The journey is the happiness. Harry I try to answer, try to take joy and every day there's ups and there's downs. I'm not looking for a destination. I do have obviously corporate goals that we want to achieve, but we're making progress every single day. Slow is smooth, smooth is fast and if we can avoid as many mistakes as possible, then that's a win for me. Especially right now when there is the potential to change the mindset, to be in the big company mindset. Right? Like let's try to be a big company. Yeah, the opposite. What I want to do, I want to create a series of startups within a startup that have that mentality of have that Grind mentality, scrappiness. That's what I want to maintain. And if we twelve months from now all cylinders are firing and everybody has that mentality, I'd be very harry that's a great answer.

[0:49:59] Harry Duran: Thanks. So as we wrap up, I've been leaving a little bit of time at the end of these interviews for you because of the nature of these conversations. It's a lot of your colleagues, your peers in the space, folks in ACTECH, is there a message, is there anything you have you want to say or share with folks in the space?

[0:50:21] Jonathan Murray: I think the important thing as a whole for the space is to ensure that, and this is going to go off a little bit, is that the public side of agtech catches up as quickly as the private side. So you have all these amazing founders that you're having on your podcast that are doing these incredible things, and something that listeners might be shocked about, or maybe they're not, is that when we try to do new things, we have a big stop sign in front of us from governments, municipalities, all that stuff that are saying, no, this is different.

[0:50:59] Harry Duran: You can't do that.

[0:51:00] Jonathan Murray: And we need to change that mindset because we need solutions like this. Right? And instead of putting up red tape, instead of putting up barriers for companies to do interesting things is like we need to ensure that they're supporting these initiatives. So that's kind of my biggest message is if there's opportunities from a municipal level, from a state level, from a province level, federal level, to support indoor AG, as a listener, as a consumer, it's very important to support those because if not, then the decisions won't be made, right? Because if the decisions made and if it's not the right one, a politician can be exited. So help them make that decision. People want this. People want these products. People want fresh, safe products to market. So if there's any way to help influence that, it's important. If there's a municipality listening to the podcast, reach out. Honestly Harry, if a municipality says you've got the green light to operate a container in our city, we'll put that top of list. Right? Red tape is definitely a barrier in a lot of different places.

[0:52:10] Harry Duran: Keep that in mind for Minneapolis as well. So I guess, final question. What's your big picture, big reason for why you do what you do?

[0:52:23] Jonathan Murray: We're trying to advance access to sustainable food. That's the mission of the company. And we're supported from Impact funds, which is awesome because they believe that that's the ultimate goal. What that Impact is isn't always CO2 emissions. And for us, it's really hyper local community impact. We are averaging zero food spoilage because if we overgrow, we're donating to community kitchens and food banks. So not only do we have space in our containers to grow and sell and be a commercial enterprise and make money, for sure, but we're also reserving portions of those growers to donate. Right? Because if someone can't eat at the most expensive restaurant in the city or shop at even a mainstay retailer and they're servicing food banks, they deserve access to this product and this food as well. So at Adapt that's what we're really focused on is advancing access to that sustainable food and then separate from the corporate mission. I want to get more people into agriculture, right? There's a lot of companies that are robotics this and let's get people out and let's eliminate that personal touch from agriculture. I get it like unit economics, economies of scale, but the more people coming into agriculture, the better. If we can create something that is not as scary for operators, right? It's not huge technology and all these things, you need to learn to get them in the door.

[0:54:02] Jonathan Murray: I think that's a big win for us because whether they start out as a mushroom farmer for us and eventually get to the point where they're confident enough to take over a dairy farm in the local region, right. We need people that are willing to jump into that industry in food production because there is no succession plan for a lot of these industries, right? Average age Canadian farmer, 55, 56 years old. Kids aren't wanting to get into the local and the family business. What are we going to do? We still need that milk, we still need those eggs, right? Let's find more people and let's give them more avenues into the industry.

[0:54:41] Harry Duran: That's a perfect way to wrap up the conversation. Thanks for sharing your insights. I appreciate you sharing your journey. It's really inspiring to see all the different ways people make it into this space. And I think it's easier to see, looking back, how the decisions you made and all the experiences you have led to where you are now. And I think during your time at Striker or even in banking, I don't know that you would know that this is where you were headed, but you were putting the pieces in place, building the relationships, having the experiences and setting you up for success in terms of what you're doing now. So I really like thank you for sharing that. It's really inspiring to hear everything that you've got in place and I'm wishing you tons of success for Adapt.

[0:55:18] Jonathan Murray: Awesome. Thanks, Harry. I really appreciate it. And thanks all listeners for listening and reach out website, adapt. AG or go to forge atfoods.com vertical 20. Get yourself some products.

[0:55:29] Harry Duran: Yeah, we'll make sure all those links are available in the show notes, and so if people have any questions, they know where to reach out to us.

[0:55:35] Jonathan Murray: Awesome.