1 00:00:00,001 --> 00:00:06,000 Welcome to Who Are These Startups? podcast shorts featuring founder interviews of Canadian startups. 2 00:00:06,000 --> 00:00:11,440 Welcome back to Who Are These Startups? I'm the startup coach founder of Fronto Starts and with 3 00:00:11,440 --> 00:00:16,560 me today is Cedric and Kevin, co-founders of Alter Climate. Welcome Cedric and Kevin. 4 00:00:16,560 --> 00:00:18,320 Thank you. Glad to be here. 5 00:00:18,320 --> 00:00:19,600 Yeah, thank you very much. 6 00:00:19,600 --> 00:00:22,000 What does Alter Climate do? 7 00:00:22,000 --> 00:00:32,080 We provide investors and asset managers with the ability to assess the cost of physical climate 8 00:00:32,080 --> 00:00:38,320 risks on their assets. So in other words, we look at what is the impact of physical climate change 9 00:00:38,320 --> 00:00:46,160 on the real world assets and we estimate what kind of value may be impaired as a result of these 10 00:00:46,160 --> 00:00:51,520 effects or climate change on their assets so that they can better manage their portfolios and better 11 00:00:51,520 --> 00:00:57,040 foresee and predict the cost of climate change down the road so that they can be better investors. 12 00:00:57,040 --> 00:01:04,480 Who is Alter Climate for? You talked about investors and portfolio managers. Is it a specific 13 00:01:04,480 --> 00:01:07,760 industry, a specific size of portfolio or investor? 14 00:01:07,760 --> 00:01:15,040 Good question. Definitely for investment managers and asset owners. So it could be for a REIT, 15 00:01:15,040 --> 00:01:20,720 it could be for a company that invests in the real estate sector, it could be for asset owners 16 00:01:20,720 --> 00:01:27,600 that have diversified strategies and portfolios, size not really. As long as there's exposure to 17 00:01:27,600 --> 00:01:33,920 physical assets in public equities and private markets, I think our product speaks and talks to 18 00:01:33,920 --> 00:01:43,280 these people. What is your startup story? I'd say Alter is born out of an idea that we had as a 19 00:01:43,280 --> 00:01:49,680 consultancy and a year ago, Kevin and I met through one of our partners in the venture 20 00:01:49,680 --> 00:01:55,840 and he brought in this whole technology side that we could possibly explore with him. 21 00:01:55,840 --> 00:02:01,600 We pondered were we going to be an integrated technology solution or basically cast out this 22 00:02:01,600 --> 00:02:08,960 software as a service tool. After about six months of exploring together, after formally 23 00:02:08,960 --> 00:02:14,240 starting to work together, we decided that the pathway was pretty clear and the relationships 24 00:02:14,240 --> 00:02:19,200 were good. The background was quite similar and we had a destination in mind and the rest is 25 00:02:19,200 --> 00:02:24,880 really history. Since then, we incorporated the company and we started developing the product. 26 00:02:24,880 --> 00:02:33,760 We've got a live MVP and onwards and upwards. I like to say that only an entrepreneur will work 27 00:02:33,760 --> 00:02:39,840 80 hours to avoid working 40. What drives you? That's a good question. I'll take this one. 28 00:02:42,240 --> 00:02:48,640 My goal is to build resilience in our world to the climate change threat. I'm driven by 29 00:02:48,640 --> 00:02:53,120 environmental sciences and I've been driven by business my entire career. I've been an 30 00:02:53,120 --> 00:02:58,000 entrepreneur and today, if I look at as I move forward and think about a legacy, I would like to 31 00:02:58,000 --> 00:03:03,920 leave behind a tool that enables the world to build resilience to climate change as it 32 00:03:03,920 --> 00:03:09,040 tries and fights through adaptation to becoming a low-carbon economy. That's what drives me as an 33 00:03:09,040 --> 00:03:16,400 individual. Kevin? I think I'm aligned on the mission and it's why we decided to launch this 34 00:03:16,400 --> 00:03:25,040 company together for sure. If I go on a more personal point of view, I cannot do something 35 00:03:25,040 --> 00:03:32,560 halfway. For me, walking 40 hours for someone else and then having the other part of my life 36 00:03:32,560 --> 00:03:37,120 when I'm starting to think about something, it's not possible. The only explanation is not even a 37 00:03:37,120 --> 00:03:45,920 choice. It's more like I need to be 100% walking, thinking, exploring something specific. 38 00:03:45,920 --> 00:03:50,320 Entrepreneurship is the only way to do that properly. 39 00:03:50,320 --> 00:04:00,640 How do you define success? I define success as me achieving the goals that I set for myself as 40 00:04:00,640 --> 00:04:06,240 an individual. That translates to the goals that we've set collectively as a team within this business. 41 00:04:06,240 --> 00:04:13,040 I also define success as the success of the people that surround me. For us, I think as 42 00:04:13,040 --> 00:04:19,840 partners, we have an objective and we won't be successful until we've met this objective of 43 00:04:19,840 --> 00:04:26,560 building a tool that's going to be found in the hands of a large set of investors, investment 44 00:04:26,560 --> 00:04:31,680 managers, asset managers, asset owners to help de-risk their investments in the face of climate 45 00:04:31,680 --> 00:04:38,000 change. That's how I would define it. Kevin? It's so hard to make something useful and for more 46 00:04:38,000 --> 00:04:45,920 than ourselves. Anything we can do in that direction would be already a success. It's 47 00:04:45,920 --> 00:04:53,440 even harder now to find something that could be actually helpful to what we are facing now 48 00:04:53,440 --> 00:04:59,520 in terms of human kind. Achieving that would be a success for sure. 49 00:05:00,400 --> 00:05:11,680 What is your funding situation? For now, we started our self-funding project. We were lucky 50 00:05:11,680 --> 00:05:21,280 enough to both of us on our own sites to already launch one company, make an exit. We are in 51 00:05:21,280 --> 00:05:29,280 capacity to self-fund the startup for now. We are planning to raise our first round by the end of 52 00:05:29,280 --> 00:05:36,880 the year. What do you wish you knew before you started Alter Climate? I'll let you tackle that 53 00:05:36,880 --> 00:05:44,080 one and maybe I tackle the next one. The interesting thing is that for now, it's still a young project 54 00:05:44,080 --> 00:05:53,200 and for now, we are not facing really new stuff compared to the first experience we had as 55 00:05:53,200 --> 00:06:01,600 entrepreneurs. It's mostly as expected, but you forget that it would be that exhausting. 56 00:06:01,600 --> 00:06:12,160 You hide that from yourself. We knew and still it's more exhausted than we were expecting for 57 00:06:12,160 --> 00:06:19,440 sure. What's your biggest learning as a founder? I think I'm just going to build on this because 58 00:06:19,440 --> 00:06:24,960 I have this bias. You build a business, you know you work hard, you exit once, you're like, 59 00:06:24,960 --> 00:06:30,080 right on, I've got a model in mind. It happens that Kevin's done the same thing. As we cross 60 00:06:30,080 --> 00:06:35,440 path, we're both thinking a bit of time spans since the exit. Now, we're going to get into this and 61 00:06:35,440 --> 00:06:39,520 it's going to be easier. It's going to go faster. We're going to be smarter. We're going to have less 62 00:06:39,520 --> 00:06:45,440 hurdles and all of a sudden, you're facing all of this. No doubt the experience pays, but it ain't 63 00:06:45,440 --> 00:06:51,360 easier. It is just as hard. It requires just as much heavy lifting and hard work, determination, 64 00:06:51,360 --> 00:06:56,960 passion, and perseverance. These are things you can't do without. As a founder, my biggest 65 00:06:56,960 --> 00:07:02,880 learning is that a lot changes, but so much is the same. To build up on what Kevin was just saying. 66 00:07:02,880 --> 00:07:09,040 We haven't actually cross-referenced our answers here, so this is kind of funny. 67 00:07:11,120 --> 00:07:16,880 You both did exits before, so you're serial entrepreneurs. You're going to get ready to do 68 00:07:16,880 --> 00:07:20,960 your fund raise by the end of the year. What's your biggest lesson in pitching your startup? 69 00:07:20,960 --> 00:07:27,680 The main learning right now we are facing is that our clients know way more than investors about 70 00:07:27,680 --> 00:07:33,840 what we are talking about. Until a few months ago and when we actually started Next AI Program, 71 00:07:33,840 --> 00:07:40,560 because of that, we were looking for feedback, external feedback. Now we are facing that every 72 00:07:40,560 --> 00:07:48,560 day that we need to find a way to explain what we are doing to everybody and investors in startups, 73 00:07:48,560 --> 00:07:53,040 which is very different than explaining that to clients and prospects. 74 00:07:53,040 --> 00:08:01,600 Yeah, I completely concur. The second thing I would say, that makes us a poor candidate for a 75 00:08:01,600 --> 00:08:06,160 pitch competition, because if you want us to throw this in three minutes when we have sophisticated 76 00:08:06,160 --> 00:08:12,160 clients, it's hard to tell it like you would tell it to your grandma. It's practically impossible. 77 00:08:12,160 --> 00:08:20,880 I said practically. Now, as AI founders, what's your favorite productivity hack or AI tool? 78 00:08:20,880 --> 00:08:32,000 I mean, we all know now that we faced a big change last November, December when Open AI released 79 00:08:32,000 --> 00:08:42,480 a chat GPT. It became very quickly a daily tool for us. Changing the way we do research, 80 00:08:42,480 --> 00:08:49,840 it's changing the way we optimize our code, it's making us rethink our processes for sure. 81 00:08:49,840 --> 00:08:56,320 Anything derived from that, it could be a notion AI, it could be GitHub pilot, whatever, but this 82 00:08:56,320 --> 00:09:03,520 generative AI, there are limits to that for sure, but it's really a big change. 83 00:09:03,520 --> 00:09:10,960 I love chat GTP, but it randomly just makes random stuff up in the middle of like, 84 00:09:10,960 --> 00:09:13,760 I'm writing something really big and then it puts something random and you're like, 85 00:09:13,760 --> 00:09:21,600 where did that come from? That's not true. I didn't say that. What is this? 86 00:09:22,960 --> 00:09:27,680 Like I do it a 30-day program and I'm doing an outline and it's like day seven, 87 00:09:27,680 --> 00:09:31,840 you're halfway through the program. I'm like, how can I be halfway through the 30-day program 88 00:09:31,840 --> 00:09:39,680 on day seven? Anyway, it's very useful, but yeah, you definitely got to edit just to make sure that 89 00:09:39,680 --> 00:09:44,720 it's not making random stuff up. We need to keep in mind that it's a probabilistic model, first of all. 90 00:09:46,640 --> 00:09:54,240 Absolutely. It's not thinking. There is no thinking behind that. It's the probability of something 91 00:09:54,240 --> 00:10:02,000 follow what you're saying, what you're looking for. Therefore, all those thinking approaches that 92 00:10:02,000 --> 00:10:07,920 could be very simple for a very young human, actually very, very difficult for this model. 93 00:10:09,200 --> 00:10:17,760 Then the other way around, like creating stuff, getting ideas, reading long documentation and 94 00:10:17,760 --> 00:10:21,360 articles to provide values, it's very, very powerful for that. 95 00:10:21,360 --> 00:10:28,560 You are part of the Next AI program. Can you tell me a little bit about your experience? 96 00:10:28,560 --> 00:10:37,280 We are really proud and happy to have been selected to this current corral. 97 00:10:37,920 --> 00:10:46,320 It's a great way for us, as I said before, to get out of our environment, just being among 98 00:10:46,320 --> 00:10:51,440 ourselves and with our clients. It's providing a lot of feedback, point of views, learning, 99 00:10:51,440 --> 00:10:59,520 teaching, ways to meet people. We are going to talk on Thursday for the Venture Reveal, 100 00:10:59,520 --> 00:11:07,360 which is a great event, a great opportunity to exchange and expand our minds. I'm very happy 101 00:11:07,360 --> 00:11:16,640 about that program. Do you have any tips for founders? I have one. If you plan to have runaway, 102 00:11:16,640 --> 00:11:22,480 which you should do, you should think about multiplying the runway needs by 1.5x to make 103 00:11:22,480 --> 00:11:27,600 sure you've got enough runway, because it's all about managing cash. It's all about managing cash 104 00:11:27,600 --> 00:11:35,200 flow and progressing against that cash management. It's never to sit comfortably without a strong 105 00:11:35,200 --> 00:11:39,600 conservative factor into your cash flow projections and your financial needs. 106 00:11:39,600 --> 00:11:47,040 So you need to build that capacity to see in the longer run. Things take longer to do, to complete. 107 00:11:47,040 --> 00:11:54,400 Things are, you run into issues, you have to plan for that uncertainty. So I would say that's my biggest 108 00:11:54,400 --> 00:12:03,600 tip. That's a tried and tested tip. Yeah. Do not overlook the weight of 109 00:12:04,240 --> 00:12:08,960 entrepreneurship on your personal relations. Be very clear with your life partner what's going 110 00:12:08,960 --> 00:12:16,720 to happen. And because if you're not supported there, if you cannot support also your friends and 111 00:12:16,720 --> 00:12:23,520 families, it's going to be way harder. So yeah, it's a life choice. And if you're not alone, 112 00:12:23,520 --> 00:12:28,640 you're not making this decision by yourself. That's a good girl. 113 00:12:30,560 --> 00:12:36,320 What's one book every founder should read? Slicing pie. Mike Morier. Now, how to work through 114 00:12:36,320 --> 00:12:45,520 an equitable equity split that rewards effort, consistent investments, cash, time. It's really 115 00:12:45,520 --> 00:12:53,520 a thin little thing that really puts a mindset around how to walk in and walk out of adventure. 116 00:12:54,160 --> 00:13:00,800 Yeah. On the non-story, non-fiction books, I love the most would be Thinking Fast and Slow, 117 00:13:00,800 --> 00:13:08,160 the Kenman. He wrote even other books on uncertainties and biases. And it's very, 118 00:13:08,160 --> 00:13:12,960 very important, I think, to think about your own biases because you cannot correct them, 119 00:13:12,960 --> 00:13:21,280 but you can actually acknowledge them. That's most of the way to manage them properly. 120 00:13:22,880 --> 00:13:28,320 As AI founders, what is your reaction to the current call to pause AI development 121 00:13:28,320 --> 00:13:34,560 and the general fear around it? It's achieving its goal, which is talking about it. The fact that 122 00:13:34,560 --> 00:13:40,480 you're asking this question is the proof of it. Obviously, it's not going to happen in 123 00:13:40,480 --> 00:13:45,760 terms of let's take a pause. We don't know about that. But talking about the risk, the impact on 124 00:13:45,760 --> 00:13:57,040 society and on work and the risk regarding information in general, it's key. So having to 125 00:13:57,040 --> 00:14:03,600 talk about it, it's part of the solution. Yeah, I concur. Where can our listeners connect with 126 00:14:03,600 --> 00:14:09,920 you and alter climate online? Find us on LinkedIn. And our emails are pretty easy. 127 00:14:10,720 --> 00:14:16,880 Cedric@altoclimate.com and Kevin@altoclimate.com. That is alterclimate.com, obviously. 128 00:14:17,520 --> 00:14:22,240 I really appreciate you both taking the time today to be part of Who Are These Startups. 129 00:14:22,240 --> 00:14:26,400 Thank you very much. Yeah, that's great. Thank you so much for your time. It's great to be here. 130 00:14:26,400 --> 00:14:31,920 This has been Who Are These Startups. Find out more at WhoAreTheStartups.com 131 00:14:31,920 --> 00:14:37,440 and check out our live events at toronto-starts.com/events. 132 00:14:37,440 --> 00:14:47,440 [BLANK_AUDIO]