Episode 11 - The Mechanics of Innovation with Rachel Burton
I do recall a colleague, early on when I was there who who kind of like, you know, whispered somewhere at, you know, at the at the water cooler, Hey, you're doing things too fast. It's like, Well, isn't that how you're supposed to do them? I mean, if you're you're at a startup founder, you you you don't really know any other pace in some some respects of like if you're trying to push something to market or you're trying to follow-up on sales leads. So that was the kind of the initial observation and learning and navigating, you know, decision making processes in different industrial sectors.
Ilya Tabakh:Welcome to EIR Live, where we dive into the lives and lessons of entrepreneurs and residents. I'm Ilya Tabakh, together with my cohost Terrance Orr, ready to bring you closer to the heartbeat of the innovation and entrepreneurial spirit. Every episode, we explore the real stories behind the ideas, successes, setbacks, and everything in between. For everyone from aspiring EIRs to seasoned pros, EIR Live is your gateway to the depth of the entrepreneurial journey and bringing innovative insights into the broader world. Check out the full details in the episode description.
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Terrance Orr:Man, I really enjoyed this episode a ton. Talking to talking to Rachel was just a breath of fresh air. I learned a ton, by the way, around biofuels and bio the biodiesel world. And just watching you two geek out was sort of like joy like a joyous moment for me, you know, just to learn a little bit more. And I think our audience is going to learn a little bit more.
Terrance Orr:But when I think about the key takeaways from this episode and the things that stuck out to me the most, there's two words that really stick out to me, it's risk taker and charting your own path and sort of the road less traveled. Just sort of the two buckets I'm gonna put, you know, Rachel in in a risk taker in the sense that, my goodness, talk about somebody who's willing to take the leap, you know, with very little insight about what's on the other side, but just a a gut feeling, right, and the conviction that that she could do it, right, and go into a new space that was unconventional at the time, you know, for for for anybody to go into and to really just chart her own path. So the first thing that stuck out to me is, one, she took the leap of faith to jump into this new space from mechanics to biofuel and learning everything along the way and became an expert in it along the way and a go to person in that space now that and probably couldn't imagine seeing herself doing anything else. She did that after undergrad and went into a trade at the undergrad.
Terrance Orr:Love that for for the story. The other piece of it, just sort of just being, you know, able to chart her own path and taking the road less traveled. You know, these are two themes that we see a lot in the EIR that we we bring on the show. And Rachel, like, 10x that in terms of, you know, showing the audience, like, how you navigate, you know, uncharted waters in a way that's unconventional. But also a bit of an educator, but I'm not gonna steal the the thunder there because, I want you to talk more about that, and I'm gonna pass it over to you.
Terrance Orr:What were your reactions to the episode?
Ilya Tabakh:Yeah, I think it's interesting. So to your point a little bit earlier, you know, the the it was nice to be able to sort of connect on the biofuel point. And I'm glad that we had the opportunity to sort of peel that back a little bit through the discussion because I've definitely been over the years somewhat guilty of forgetting to fill in the fuel comes traditionally, you know, it's called fossil fuel because it comes from oil. And then when you have biofuel, it comes from biological constituents, whether it's soybean or maybe used oil. And then there's all kinds of conversion processes that you have to do in order for it to start to look like a drop in replacement.
Ilya Tabakh:And we didn't fully get to all that, but it was nice sort of going back and forth and being able to sort of jump into some of the details there. And I think it's, you know, I think it's important and I'm glad that you kind of forced us a little bit to, you know, kind of cover some of the gaps that, you know, we were we were both so so into that we didn't necessarily establish some of the fundamentals and basics. That was great. And it was it's always good to sort of connect with somebody after ten or fifteen years of, you know, both of us have essentially moved on from biofuels directly, although, you know, still some connection there. So that was great.
Ilya Tabakh:I think the other part, you know, the teacher part, I think throughout Rachel's journey, she's been an individual contributor, a teacher, then back to an individual contributor. And then again, sort of a mentor, a resource for folks as they build their companies. And I think actually jumping back and forth, especially once you do the kind of teacher research thing a second and a third time, gives you some really interesting and good perspectives that you can sort of lean upon and say, Hey, when I did this last time, this is really useful, but maybe I can try it again in a different way. And I think, you know, I've sort of enjoyed both that perspective, but also kind of the eagerness, you know, kind of the desire to keep doing it, right? Thinking about what can you do with the application of a venture studio?
Ilya Tabakh:How can you support the ecosystem? That kind of thing. So I thought that was great. And another thing is, you know, I'm always convinced that the world's a tiny little village. And I think the discussion with Rachel and really thinking about how Kansas City, Atlanta, RTP, kind of North Carolina are all connected to each other.
Ilya Tabakh:We found at least three or four central nodes to press on. And it's going to be fun when we release the episode to sort of highlight the collaboration and all the really great interconnectivity in the RTP and kind of North Carolina ecosystem. And then, you know, sort of connect the dots even beyond. And so it was great to be able to sort of identify that. And of course, you know, there's always everybody's one hop or two hops away from each other.
Ilya Tabakh:And I think we we sort of doubled down and proved it again. So excited that everybody got a chance to kind of dive into that conversation and that we were able to bring Rachel in to sort of dig in and connect with us.
Terrance Orr:Absolutely, man. I'm pumped for our audience to hear more about this episode. It's going to be very enlightening for people.
Ilya Tabakh:All right. One of the things that's really exciting for me about the EIR network and generally kind of the innovation ecosystem in general is how kind of small connected and ultimately at the end of the day, how you see kind of folks over different chapters of their professional career. So what's cool is Rachel and I first ran into each other when we were both in kind of biofuels land. And I think she'll get into that a little bit more later in the discussion. But she was doing some really awesome stuff in the Carolinas and I was kind of in the middle of the country in Lawrence, but I, you know, was kind of following what was happening.
Ilya Tabakh:And what's cool is, you know, later this is, that was probably twelve, fifteen years ago. And both of us have, you know, kind of taken multiple steps in our kind of career journey path, whatever you want to call it since then. So it's really cool to sort of see how folks kind of make a career, make a path and how sometimes nobody, you know, when looking back, it's sort of unexpected in some ways. And so I'm really excited to have Rachel Burton with us today for another episode of EIR Live. Maybe to get just started and jump into the discussion, Rachel, maybe we'll kind of start from the beginning.
Ilya Tabakh:What was kind of your first encounter professionally? Like how'd you get started? And then we can kind of go from there and jump in.
Rachel Burton:First off, thank you for having me on the program. I'm super excited as engaged in the entrepreneur in residence community and talking with both of you from of like how I got involved in entrepreneurship. I would say I truly accidentally fell into it, as many people do. I studied agriculture. I had studied auto mechanics.
Rachel Burton:And ironically the two of those both the automotive technology, the agriculture, as well as some interest in food and food waste. All the all of those kind of combined together ironically kind of ended up in starting a biofuels company that is based in Central North Carolina. That was almost twenty years ago. That was Piedmont biofuels, and I think we started in 2025. I mean, 2005.
Ilya Tabakh:Yeah. Well, it's easy. It's easy to add the decades now. Yeah, because I definitely leave that on and off. How did you meet the founders and things like that?
Ilya Tabakh:Was it? Because a lot of those stories, people kind of know each other, have worked each other a little bit. It's always an interesting kind of story. How did you get into starting? You know, did you have co founders?
Ilya Tabakh:Did you start it yourself? Us more about that a little bit.
Rachel Burton:Sure. So Piedmont Biofuels kind of was incubated literally in a garage outside of the RaleighDurham area. At the time I was a high school and college level auto mechanics teacher and I was teaching high school auto mechanics in the morning and college level auto mechanics in the evening and was just generally interested. I was kind of co located in this agricultural program and I was generally interested in kind of seeing if there is an opportunity to connect agriculture and renewable energy. And this was many years ago when long before kind of, you know, battery or EV technology was available to the consumer.
Rachel Burton:And there was a strong interest in reducing gas prices or diesel prices. I had an interest in looking at reducing waste in the automotive industry and then also having an impact on cleaner emissions through kind of just a small network or connectivity. I met Mike, who ended up being my co founder. I teamed up with a friend of mine named Leaf, who had just finished a degree in sustainable fuels technology or sustainable technologies. He was based in the New Jersey area and actually moved down to North Carolina.
Rachel Burton:And we decided to teach a class together in biofuels. The community college where I taught automotive essentially gave me the chemistry lab that was being used for night nursing classes, and they kind of gave me permission and license to to teach biofuels technology, both in the automotive garage as well as the chemistry lab.
Ilya Tabakh:Nice. It's actually interesting. So both agriculture and kind of mechanic are very high in problem solving and sort of systems and things like that. It's actually when we were talking in the preparation for this episode, talking about how folks are doing a lot of kind of mechanical education, even to teach kind of STEM skills and things like that. Did you see kind of that problem solving and kind of systems approach to stuff being helpful to you as you dove into Piedmont?
Rachel Burton:I don't think I knew it. You know, it was maybe intuitive in some way of being able to not be afraid of taking on hands on challenges. And then also, as an automotive technician, you learn a specific methodology of troubleshooting problems. And so then you kind of get into this mindset of troubleshooting trees. And I think that helped in kind of developing a methodology of not only critical thinking, but problem solving.
Terrance Orr:Very interesting. I want to dive in here just a little bit, because one, I do want to ask you about the drivers behind what got you into this in the first place. What made you go to school for this in the first place to wanna solve problems around food and automotive waste and the other things that you wanted to do in that in that space that I just want to know what motivated that that that journey for you to do it. So I'll pause there for a second and then I have another question that I want to ask you.
Rachel Burton:So I actually did not had no intention in going to trade school after finishing my undergraduate degree. I was I kind of did it backwards. And I was taking some classes in the ag program because I was working on a local farm and I took a class in tractors, tillers, and lawnmowers. It's essentially small engine repair. And I had just purchased an older pickup truck in which I thought was going to be my farm truck.
Rachel Burton:The transmission soon became quite an issue. And the gentleman who taught the small engine repair class was also the automotive instructor at the college. And he said, Well, if you're interested, I'll show you how to repair your transmission. I'll show you how to replace it. And I was like, well, of course, who wouldn't?
Rachel Burton:And the short story is after replacing the transmission, this person convinced me that I should go to auto mechanic school. He was like, but you're not half bad at this. He didn't say I was half good either, but at the time in Central North Carolina, there was opportunities for young women who wanted to go into non traditional careers. If you wanted to be a welder, a motorcycle mechanic, an auto mechanic, or if you wanted to be an electrician, they would pay for you to have you would necessarily get a scholarship for a trades degree and then buy you a set of tools and then help you get a job. And so I actually went down that trade route and worked at I worked at a Ford dealership.
Rachel Burton:I worked at GM Chevrolet dealership. And then I also worked for an eclectic, auto mechanic who specialized in like Volvos and Volkswagens and Peugeots.
Terrance Orr:That's super interesting. And the reason why I wanted to ask you this question first because there's a trend between already that I'm seeing in your background between guests that come on the show, which is they always do things in a very unconventional way. Right? And for whatever reason, at the time, they don't even know why, but they take to leap to try something new anyway, right? And you did this in a very unconventional way.
Terrance Orr:You went to undergrad and then you went to a trade school. Usually people go to a community college and then they go to undergrad or they transfer over or they do a trade school first and then go get an undergrad degree. You decided that, so what? I'm just gonna try it anyway. I'm just I'm it.
Terrance Orr:Why not? Right? And built the whole career off the back of that from that foundation. So I just don't want that to get lost in the things that we're about to get into in your background as we set the table for the rest of the the the podcast. Now thinking about that time, you started to tell us about that time in North Carolina for young women getting into to trades.
Terrance Orr:Can you set the table for our audience talking about what was the biofuel sort of space like during that season, you know, of when you were start starting to you're building Piedmont. Right? That you you did you did what you had to do there. It's starting to transition. You're about to make your next leap soon, which we're we're gonna ask you about.
Terrance Orr:What was the the climate like at that time for for this industry, for this space? If you can educate our audience just a little bit.
Rachel Burton:I would say the biofuel industry was in a very early and growing and energized area. It's you know, how we ended up evolving from just giving a community class on biofuels and like how to make your own biofuel actually started with the state energy office. There was someone in the state energy office who called the community college and said, Hey, we hear you're leading a class on biofuels. And there wasn't anyone at any of the larger four year institutions, universities that were either, teaching specifically on that. And they asked that I apply to this grant program And it was a demonstration program where they were like, Hey, we really want somebody to build a reactor on a trailer and maybe drive it around and teach farmers about biofuels.
Rachel Burton:Is that interesting to you? I was like, Well, I have a three bay garage. I have a diesel truck that runs on biofuels. I could probably get a trailer and work that out. And that's how we ended up gravitating from the class to actual kind of pilot scale production.
Rachel Burton:And that kind of led into more of a buyer's co op. It's just like each one was a little bit of a domino.
Ilya Tabakh:Yeah. And just just to jump in my experience in sort of the biofuel industry at that time was a lot of, you know, demonstration reactors and sort of thinking about, you know, because at the time, of corn based ethanol was something that was known and was sort of more scaled. So you saw these sort of industrial scale plants, and then there's sort of a cycle for when it made sense to make fuel and there's, you know, kind of a couple cycles of opening, closing, things like that. But on the biodiesel side, you know, in Europe, they did a lot of work in kind of using rapeseed oil in order to start to make a biofuel biodiesel. There's not a lot of rapeseed in The US, but soybean oil looks pretty similar to rapeseed oil.
Ilya Tabakh:And so there's a lot of work in thinking about, hey, can you use soybean oil? Could you use then used oil? And so it's really interesting because it's kind of wild, wild west in some ways because people, you know, were generally interested just for, you know, observation and things like that, but then also started to think about, hey, you know, can we make this a business? Where can you get enough oil or spent tallow or whatever for it to be useful? What happens when you use tallow for fuel and, you know, all this?
Ilya Tabakh:We won't dive too far into that. But it was really interesting to see just like the early formation. I really do think, at least for the commercial, like biodiesel industry, was like super early days and sort of seeing different types of players there and how they thought about the world and operated was was, you know, at least for me, was a good experience.
Rachel Burton:I would say that we had a very similar journey of like originally we started the facility once we had actually acquired an abandoned industrial park, which was kind of just across the town from the community college. We started that facility on soybean oil that was kind of just traditional refined bleach, deodorized soybean oil. But the pricing of that kind of dictated a shift to something that was lower quality. And since we are in Central North Carolina, we shifted over to poultry fat. And we were one of, I think, three or four industrial facilities that were capable of making that shift because it was really challenging.
Rachel Burton:And then ultimately, we built out our own supply chain, which was collecting used cooking oil and lower fats oils and greases to convert into biodiesel.
Ilya Tabakh:Yes, that's cool. Maybe just to kind of summarize what I heard, it was like a little bit of a, hey, can you build this sort of trailer mounted reactor for just education and help people wrap their heads around it? Then you kind of are operating this reactor. You have now knowledge to sort of scale it up and get to a place where you know, it kind of becomes a commercial operation and then sort of the input, you know, kind of the the feedstock, sort of the inputs into your process drive you into having to adopt different feedstock, which means that there's all kinds of different production and mechanical and fortunately doesn't get too cold in North Carolina, but also some cold weather differences between animal fat and sort of soybean oil. And so you get into all kinds of that.
Ilya Tabakh:Is that kind of a fair progression of how things went on Piedmont?
Rachel Burton:I would say that that's a pretty good progression. There was like one little chapter in there before from the pilot scale in terms of like crawling, walking and running, where we built out our distribution business. So before we actually built a larger scale commercialization, commercial operation, we we actually bought a truck. We just bought an old fuel truck. We started buying other people's biodiesel and we started distributing it.
Rachel Burton:Leaf and I and our other co founder, Lyle, also kept teaching classes at the community college. And it was just an organic user buyer. We built the community that we didn't know that we were building our buyers and our users. But we we every year or every semester we would graduate, you know, another 20 people who at that time were like, hey, I'm looking for something, an alternative vehicle. And there weren't EVs really out on the market unless you were going to like rip out your entire gasoline engine and put your own put a whole huge battery bank that didn't quite exist on the marketplace.
Rachel Burton:But yeah, so it was like kind of pilot production, kind of bench scale and then building out distribution and then eventually the commercial production side.
Ilya Tabakh:Yeah, that's I just want to, by the way, just kind of highlight, you know, once you start operating, the experiences and sort of insights that you get are very different than, you know, when you kind of thought about what am I going to do. And so one of the roles of kind of EIRs and, you know, folks like that are to take kind of experience and insights and sort of translate it into a new context. But one of the issues that I always have is sort of explaining that, hey, you know, there's a difference between, you know, what happens and how you thought about it was going to happen in the first place. Right? And so like in a lot of strategy discussions and things like that, you can only normally tell the difference between sort of an operator and then just kind of a pure strategist because sort of the way that they think about the world is is very different.
Ilya Tabakh:And so as you're talking about the, you know, sort of distribution, education, two sided marketplace, commercial scale up, there's so many different things in there that, you know, I'm sure we'll peel back on some of that. It's just like, it's funny to say that, you know, we did those things. It's a whole different thing from what did you learn? What did you do? I just, you know, sort of want to point that out because as folks, you know, kind of work with you today and in the future, you know, there's all these insights that are kind of available just because you're out in the world doing it.
Ilya Tabakh:And so I think it's just kind of don't want to kind of go on in the conversation without highlighting that for us.
Terrance Orr:And this was a great chapter of your career, obviously, Rachel, right? But tell us about the next chapter. You did something interesting next where you were negotiating licensing deals. Tell the people for who and what did you do in that role.
Rachel Burton:Maybe part of the next chapter is connected to this question that you guys asked, which was what was the significant challenge that taught you the most in your career? You kind of prepped on that one. And that question really is kind of this impetus around where innovation happened at Piedmont. So we had two challenges. Like so to me, the significant challenge was the importance of water infrastructure in manufacturing.
Rachel Burton:Our industrial park was at the edge of the town, so its water supply and the wastewater connection ultimately became the place for not only creative thinking, but the opportunity for innovation. Because we were limited on our ability to discharge wastewater. And if if you know anything about biodiesel production, one of the side streams that came came off of biodiesel can be essentially a soapy waste stream. So like water, it's basic. You use water to kind of scrub the soap out of the fuel.
Rachel Burton:And it's it's something that you have to dispose of. But we had limitations in our ability to discharge or dispose of this wastewater. So we had to think about how can we, instead of just treating it and managing this disposal as a cost center, is there a way that we can reverse engineer and not create soapy wastewater as a whole? And I was lucky enough in my career and in research and in the biodiesel industry to have really great mentors. And I had a mentor at the USDA, the Department of Agriculture, who mentored me at the American Oil Chemist Society, as well as introduce the concepts of using industrial enzymes as catalysts.
Rachel Burton:And that was essentially the place where we looked at, can we replace the catalyst in the in the chemical process so that we don't make this soapy wastewater? So yeah, that that was the the kind of hotbed for where we had our innovation, and that created an opportunity to develop a strategic partnership with Novozymes, which is now called Novo Nensis. And we developed that partnership and looked at building technology for the biodiesel industry outside of a research collaboration there.
Ilya Tabakh:Yeah, I just love the you know, my favorite driver for innovation is necessity. And so it's always way better when like, hey, we have a problem. How can we solve that problem? As opposed to, hey, we have this awesome mechanical chemical technique to do whatever. Who's got the problem?
Ilya Tabakh:Right. And so it's awesome to be like, hey, we have this thing. It's a bottleneck. You know, probably will limit how much production we have. So it's cool that you guys, you know, kind of had the problem to bring to the solution, not the other way around.
Ilya Tabakh:And it's interesting to, kind of connect it to a different because a lot of those problems are transferable. So it's cool that it goes. So where does that take you? Kind of as Terrance was going to the next chapter.
Rachel Burton:So in our in the process of commercializing the biodiesel technology, there was an opportunity for for me to move over and work under the Novozymes umbrella. And that was essentially the next chapter of my career is working in different roles at Novozymes in the bioenergy industry. So some of that was working in the bioethanol space and then also supporting the biodiesel space and how that technology met the marketplace as well.
Ilya Tabakh:What was that role like? Is that sort of using that background and thinking about kind of enzymatic approaches to different problems? Or what is kind of the day to day? I bet you that was a little bit of a whiplash going from an operating sort of startup to, you know, more of like would you call it like a technical sales role or like research or what? What did that ultimately translate into?
Rachel Burton:I think the original title was called industrial technology specialist, which means anything, really. It was there was so much of a culture shock of having been inside of your own startup for close to ten years and then moving into a very large global organization that's heavily invested in the research and development and understanding, learning their process of innovation development, product development, and how they launch products. So I found it like I kind of just soaked it up because I was kind of just interested in the process of technology commercialization and seeing how not only how the specific molecules were developed, but how the mode of supporting technologies from a service side so that we had a whole element of service innovation.
Ilya Tabakh:Yeah, it's maybe digging into that a little bit, of the pace and the role. You know, when I when I became an EIR kind of most recently, I found myself to be kind of a spiritual leader where, you know, for the entrepreneurial part of my career, was used to being sort of a hardline leader, you know, be able to get the resources and have the executive authority to do what I needed to do. And so for me, that was like a pretty surprising experience. How was it? What was kind of the most surprising thing?
Ilya Tabakh:Was it the pace or, you know, I guess maybe initially and then you were there for a little while. So, you know, kind of maybe first impression and then sort of maybe the biggest difference as you settled into it a little bit?
Rachel Burton:I think initially the pace. I do recall a colleague early on when I was there who who kind of like, you know, whispered somewhere at, you know, at the at the water cooler, Hey, you're doing things too fast. It's like, Well, isn't that how you're supposed to do them? I mean, if you're a startup founder, you don't really know any other pace in some some respects of like if you're trying to push something to market or you're trying to follow-up on on sales leads. So that was the kind of the initial observation and learning and navigating decision making processes from in different industrial sectors, like how the ethanol industry might have made just had specific decisions, whereas biodiesel was actually at that time inside the corporation kind of it had its own decision making process as it was sitting kind of in a different industry group.
Rachel Burton:I think one of the having been there for a number of years, there was looking at this how a global corporation makes supply chain decisions and how they prioritize certain products around the market demand was a very interesting lesson once I was kind of integrated and had that insight, even though I wasn't on the actual enzyme production side, it was more on the the product launch and product innovation side.
Ilya Tabakh:Yeah, for me, that's actually one of the interesting things. Once you actually like dig in and get to know the organization that you're kind of embedded in, there's certain things that don't make sense initially that ultimately end up making sense. And I think that's kind of one of the interesting things for experts in residence, entrepreneurs in residences. The residence does some things for a reason. Not everything is just weird and slow and whatnot, right?
Ilya Tabakh:And it's really interesting to sort of, for me at least, to be able to, in engineering and construction, safety culture is a big thing, right? Because there's, when you're on the job site or something like that, there's a million things that can go wrong. And so there's all kinds of different sort of process and ultimately kind of cultural things that you do in order to manage that. And certain things didn't sort of make sense, you know, looking from the outside, like really outside in. But once you're kind of on the fence, you get to a better view.
Ilya Tabakh:It it was sort of interesting to see. So it sounds like you you were able to observe, you know, some things like that as well because, you know, Novozymes and those guys are, you know, older companies, more established, have a sort of longer view on on their markets, their industries, things like that. So that's one of the things that I really kind of came to appreciate and being embedded and partnered with companies.
Terrance Orr:Now, really enjoy hearing your stories about being inside of a larger company versus running your own company. I spent the last few years helping large companies build companies, right? And when you think about that, it's it's sort of they go against each other a lot. Right? Larger companies optimize for efficiency, and startups optimize for speed, right, and execution.
Terrance Orr:And they just don't go together at all the time. So I sort of wanted to chuckle out loud when you said, you're doing things too fast. And it was like, isn't it supposed to be this way? Why are you guys moving so slow? Right?
Terrance Orr:And so on and so forth. And it's that's just the pace that they're used to, and it's sort of this, push and pull, like, against each other. But what what I'm grateful for with those experiences is that it taught me how to be bilingual. Right? I can speak corporate.
Terrance Orr:I can speak startup, and I know sort of how they operate in both environments. That sort of made me adaptable, right, when I became my, EIR for the first time, and now I'm three x EIR, so it seems a little bit weird at the time. But talk to us about that experience. Right? The podcast is all about people making the leap to this mysterious role called the entrepreneur in residence.
Terrance Orr:When did you first hear about the EIR role? Did you know what it was? And what made you take the leap to do it?
Rachel Burton:After I left Novozymes for a couple years, and it was a great experience, I got to have several different insights into kind of the corporate innovation pipeline. I wanted to give back into startups and kind of connect back into my roots. And I had an opportunity to take a technology commercialization specialist role at UNC Chapel Hill in North Carolina. And I was already embedded at UNC through the Small Business Center. And there was this group at UNC, which is their accelerator program, which is called Kickstart Venture Services.
Rachel Burton:And they were building out their entrepreneur in residence team. And I just got an email one day and they said, Hey, we'd like you to be an EIR. You're like, You're already advising UNC professors and UNC start ups. Can we just include you? So I didn't even apply for it, but I was so grateful that I got to have that experience because there were other activities inside UNC Chapel Hill.
Rachel Burton:There was this venture catalyst program where we got to take students who essentially were developing in their own EIR capacity. They were looking at building. They wanted to build their entrepreneurship skill set. So they were kind of paired with EIR's and startup companies, startup founders to tackle a specific problem or look at their commercialization plan or do customer discovery interviews, those type of things.
Terrance Orr:Absolutely. What was it like being back inside of the walls of a university or academic setting, having done teaching sort of a long time ago, building a company inside of a large company, and now you're back on the other side helping people sort of build their dreams, right, and helping them commercialize technology. You're back in the walls of a university now helping them out using your entrepreneurial chops. How was that experience?
Rachel Burton:I like being able to kind of like break down connections of like seeing a problem in a holistic way and knowing, oh, I can't solve that, but I know a person who can solve that for you. And let's get you that introduction or here is a potential strategic investor or an opportunity where you could pull in a strategic investor or there were a couple of times that I was leaned on to bring in somebody who was an executive who wanted to lead the company and going out and finding and curating kind of a list or a group of people for a university professor. So I kind of saw it as like connective tissue.
Terrance Orr:Oh, okay. I like that word. I like connective tissue because I like connecting people and things. So let me build on this a little bit because I love you using the word connective tissue, which I look at universities as a connective tissue in a lot of ecosystems to do a lot of different things. Did you have to directly help recruit people to those companies and ventures that were going to be commercialized at the university?
Terrance Orr:And if so, how hard was it to convince somebody to come be the founder or CEO of a university spin out company based off their technology and IP?
Rachel Burton:Yes. So there were at least one or two times that I was helping recruit somebody. And it is extremely challenging if there is a huge bank of patents. Someone is very prolific in their research and very intelligent in developing a patent portfolio. But then there's you have this connection with the technology transfer office and an interest in having the technologies licensed out or having a company spin out.
Rachel Burton:And the founder or the professor not knowing which side, which area do I want to be on? Do I want to be a chief scientific officer or do I want to be a CEO founder? And helping them kind of navigate that area. I think there's an opportunity to to for EIRs to really shine and under helping, you know, founders understand, are they really founder ready?
Ilya Tabakh:You know, that's a it sounds like you were one of the things that I think that you need to be an effective entrepreneur in residence is sort of know what you're good at, connect with a place that sort of appreciates it and has sort of done the homework a little bit, and then maybe a little bit of retooling for skills. Right? Because it's a it's a different thing to be a coach than a player. But it sounds like there was a really good sort of give and take and dynamic between sort of you and the folks you were embedded with. And so maybe can you talk about that a little bit?
Ilya Tabakh:I've seen a lot of EIR roles where you're like, here's the three things you do, EIR. You have office hours. You do this thing. And and and the EIR is like, they're really not using me, but that's that's what they want. So that's what they want.
Ilya Tabakh:It sounds like you were able to, you know, kind of participate in informing your role. But I I'd love to kinda have you dive into that a little bit more because because it sounds like it was a good situation or is a good situation.
Rachel Burton:There wasn't a short leash and you could meet the founder or the startup where they were at and kind of ebb and flow with what they needed. You know, some people would say, hey, I really need to find investment. I like my key thing is I'm I'm looking for equity investment. Another one would be like, I just want to build out non dilutive funding. Help me build a strategy for non dilutive funding.
Rachel Burton:And another one might be like, I really need a strategic partner. You could as an EIR, you kind of wear different hats and, you know, maybe today I'm helping, you know, look at a pitch deck and there might be another day where you're you're making cold calls or warm introductions to people in your network. I think that at least the at the time that I was at UNC, there was an opportunity to kind of meet the founder where they needed to be at that time.
Ilya Tabakh:Yeah, that's pretty. I mean, I love the generally how people are structuring this because, you know, having spent way too long in academia myself, there's just a clear misalignment of incentives between sort of academic success and commercialization. And so being able to sort of navigate that and find ways to, you know, bridge the gap because there's a lot of cool IP. There are some grad students and even some faculty members that are really interested in the commercialization side. But I have also run into my fair share of stories where, you know, folks really want to start a commercialization function at a university, and they just don't understand why the, you know, all the professors and grad students and everybody aren't just like super excited about it.
Ilya Tabakh:You know? And I think part of it is just kind of not understanding the culture of academia or at least the traditional culture. And so it's cool to to kind of hear stories of you being able to navigate that. Was there anything at kind of UNC that was maybe unique or different? Did you have a chance to sort of compare other academic kind of programs?
Ilya Tabakh:Because I'm always curious on like, what do these places do really well? I'm curious if you have thoughts on kind of UNC's program for that.
Rachel Burton:Well, maybe not on UNC specifically. So although my role was embedded at UNC Chapel Hill, I worked with professors and innovators at Duke University, at NC State, at any of the, universities or colleges. And it didn't even have to be in the universities. It just happened to be that way across North Carolina. I think one of the interesting projects that I got to be a part of that was not directly connected to UNC was doing an impact assessment of clean tech and ag tech incubators across the country.
Rachel Burton:So I was I was part of a group that did some some evaluation, like a gap analysis and like. Looking at the follow on funding for different startups as they've been embedded in certain incubators and seeing where there's the opportunity for improvement and how and how much a network like you have in an EIR program can make an impact on the long term success of of a startup.
Terrance Orr:I want to double down on this a little bit because I do think there's something special about North Carolina as a state and and and why this sort of works differently from other universities and institutions who might not have the same statewide support as as a North Carolina that I've seen having been a part of advisory boards for different venture studios involved with different universities, there's something very unique about UNC Chapel Hill in North Carolina as a state in that there's something embedded in the infrastructure in North Carolina as a state where they wanna work with each other, they wanna partner a little bit. Right? So even within UNC UNC, they have a power up venture studio that's separate from the actual innovation venture studio, that's separate from another innovation arm, but somehow they talk to each other at times, right? And they also partner with people throughout the state and other universities to feed ideas and different things in. So I think there's something special about the the attributes of North Carolina as a state and how they share resources and things, and they don't see it as competing all the time.
Terrance Orr:Right? And and that creates a unique ecosystem for entrepreneurship as they continue to grow. That's my sort of perspective. I I only sit on one advisory board as a part of UNC right now, but from what I've seen being a part of that for the last two plus, you know, three plus years there, they they have very good connectivity to the rest of the ecosystem. They wanna play in the sandbox nicely with everybody else.
Terrance Orr:So I'll just add that on from my own sort of perspective and what I've seen in North Carolina personally.
Rachel Burton:I agree, Terrance. I'll give a little shout out to, the group at NCIDEA, as well as the North Carolina Center for Entrepreneurial Development, though I think they those two organizations are really part of the the kind of lifeblood of kind of building that environment of the non competing environment that we are all part of an ecosystem.
Ilya Tabakh:So just to triple down on the network thing. So Thom Ruhe was at Kaufman Foundation when I was doing the Kaufman Global Scholar Program. And then I actually spent some time in RTP at Cisco in their intellectual property group as part of that. So I've had some exposure to the program as well. But sounds like Thom's doing good work over at NCIDEA, which is, you know, showing again how small really at the end of the day the world is.
Ilya Tabakh:And so it's really cool to hear that come up. But yeah, anyway, I think that that connectivity and interaction, I think in some ways, I guess we're we're sort of cheerleading RTP in North Carolina here, but I'll triple down on it as well. One thing that's different maybe about RTP is that there is, you know, multiple universities very close to each other. And there's also multiple municipalities and kind of the RTP story of trying to retain talent and ultimately kind of build intellectual capacity in the region over, you know, a pretty long time arc with the IBMs and Cisco's and others, you know, kind of being long term participants is is an interesting one because that that is not that different from the Silicon Valley story, you know, and some of the other big hubs, the Boston story, you know, that there is anchor corporate and research tenants. There's flagship universities and sort of the key parts of the ecosystem are, you know, pretty pronounced and good.
Ilya Tabakh:It was interesting to sort of observe them all play together. But at the same time, when you're in RTP, there's still a little bit of friendly rivalry between Duke and UNC and North Carolina State Yeah, exactly. Yeah. And so it's just like and it was funny because I had to the same thing happens in Kansas City where the KU folks and the MU folks and everybody sort of has, and I'm like, outside of the region, nobody understands what you're talking about. So the regional approach is way better than the sort of local approach.
Ilya Tabakh:It's just funny how that all kind of connects and comes together.
Rachel Burton:I also think that it's interesting. You mentioned Kansas City and KU and I was at a biotech meeting recently in Kansas City. And it was interesting to I was talking about the RTP area, and then there was like, well, we have our own little thing here in St. Louis. So it was kind of like friendly rivalry between the Missouri side of things as well as the Central North Carolina.
Ilya Tabakh:Yeah. And as long as everybody's kind of understands what their differentiation is, that's actually really healthy. You know, where I've seen that kind of fall sideways is when somebody tries to be everybody for everything and that's really hard to sort of compete with some of the just older and more dense regions. And so, you know, that's the nice thing about RTP and other places is there's sort of really good foundational elements that you can build on.
Terrance Orr:Absolutely. I want to talk a little bit about evolution. You know, you've done an incredible job of giving us some history and education around, you know, the EIR role and how you sort of went about it day to day in your day to day role. I'm curious to know your thoughts on how you see the role evolving with time, right? And over time, how do you see the entrepreneur in residence as a role?
Terrance Orr:Does it matter the residents? How do you see it evolving?
Rachel Burton:So interestingly, I have observed this in the last year, and I'm hoping to lean into an opportunity in this area where when I was an entrepreneur in residence at UNC, it wasn't specifically a role in which I would be spinning out with any one specific technology or or group. I was more part coach, part like interim co founder or and bounce ideas off if there wasn't a co founder. And then there was kind of some part emotional support there as well. But I've been seeing a number of venture studios who are building their own entrepreneur in residence programs where they are hosting entrepreneur in residence to specifically incubate an idea into a new company. And they're funding it.
Rachel Burton:I think that's a really interesting model and an interesting evolution.
Terrance Orr:Absolutely. We're seeing a lot of that, you know, in the marketplace. I mean, from venture builders inside of corporates, the ones that are independent from corporates that are venture studios. And you know it's kind of this odd thing. You have some venture studios who want to fund the companies that they incubate.
Terrance Orr:You have others who do not want to lead the round and fund the companies that they incubate because in certain scenarios it can send a certain signal, right? If I'm the person that I need to lead the round and fund the company for the one that I incubated because no one else will, is there really something there, right? Or, know, should I get somebody else to lead it to show the value and I participate to show that I have skin in the game as well, right? So this sort of push and pull a little bit in the ecosystem on what's the right or the wrong way. My own personal opinion is I don't think there's a right or wrong way.
Terrance Orr:Think it's what is best for the founder and how do you align the incentives across all the people and all the stakeholders involved? Because I think it extends beyond academia. I like a 100% agree with Ilya. I think it actually goes beyond academia into venture studios, into corporate venture builders, into name your place where somebody has been in residence where incentives don't align with the person that you're bringing in to actually do the thing. It's going to be an uphill battle.
Terrance Orr:And, and, I've just seen this way too many times having been a part of six venture studios at this point. There's so many different models and it's not a right or wrong model, it's sort of how do you actually align the sentence of the person coming into the studio, and so what you're trying to achieve. So I just think it's a great like observation that you have around more EIRs obviously being recruited into venture studios and that role evolving, but they don't need to go out and search for the capital all the time. Sometimes it comes with incubating the company essentially.
Rachel Burton:I think it's also there's something that I've been kind of a part time coach out that's still at UNC. It's more of like a drop in thing with some other entrepreneurs. It's a class at UNC that's in the School of Entrepreneurship. And it started out as a venture building class that was assisted with AI, specifically ChatGPT. And I was teaching undergraduate students like, what is it like to like, how do you fast track building a venture and can you use AI to help you do customer discovery in a better way?
Rachel Burton:And this class that's taught by Tom Tom Collopy, he he's really innovating and and there's some support from our the Central North Carolina entrepreneurship area like NCIDEA. And it's really evolved into guiding entrepreneurs on how to effectively build a sales funnel, which I think if you're an entrepreneur in residence, you understand how to get to sales quickly. And I think that's one of the things that venture studios want. I don't know if you've seen that as well in the in all the venture studios that you've done, like where there's been a good example of the EIR to getting to sales quickly.
Terrance Orr:Oh, mean, so I have a ton of examples. I'll keep myself for another hour. But you know what I've seen them over index on is short sales but also traction and de risking the business as much as possible, right? To earn the right for them to actually raise the capital, right? And some of that is proven that you can actually go out and get sales through traction data and other things, right?
Terrance Orr:And I think that's interesting because they're raising capital faster. They're also getting exits faster out of venture studios and that data is out, right? And I don't want to call the number right now because I can't remember the exact number, but I think it's they raise around 25% faster or something like that. But, you know, we'll we'll we'll we'll, you know, put that one in the can for right now. But it's a very interesting model.
Terrance Orr:I could talk about Venture Studios all all day long, but I I I do want to pass it, back over to Ilya after I ask the question around, do you have a dream EIR role that you've thought about, right? And we will get into some other things that if you could wave a magic wand and decide, would like to be an EIR in this residence, where would that be?
Rachel Burton:I don't know if I have specific one, but I am curious about the venture studio model of finding and I've looked at a couple of them and I'm currently exploring some of them to see if there's synergy between kind of my you know, my expertise is in ag tech and biotech, but also water and a circular economy and the energy kind of the energy water nexus. So I'm looking at venture studios in those places to see if there's a good fit between any of, you know, some venture studios are backed by an existing bank of IP. And so they actually list IP. They're like, here's our IP that we have connectivity to. And we want people to take this specific IP and move it into a viable business.
Rachel Burton:So I'm just generally curious about those areas.
Ilya Tabakh:Yeah, we actually talked about this in the prep a little bit, but maybe one of the things as we were talking about it earlier that I was excited about is just sort of reshaping the Ph. D. Experience. So kind of like deep science ventures and some of the work that activates doing on, you know, kind of thinking about, hey, got to write your dissertations, you have to ultimately, you know, pierce a hole in the body of human knowledge, add something, whatever. But also, what if you were in parallel, kind of derisking the technology, understanding where some of the applicable markets are?
Ilya Tabakh:In a longer time horizon, it's sort of interesting to think about where do these types of innovations happen? Right? Because fifty, eighty years ago, some corporations had pretty deep, you know, kind of basic R & D functions. And for the most part, most of that's gone. Right?
Ilya Tabakh:And so thinking about going forward, how does that look? It's interesting to sort of think about. But I think that, you know, that venture studio in an academic setting with sort of the right partners and sort of the right both vertical focus as well as EIR as well as capital is a really interesting sort of channel to kind of help continue to evolve that story.
Terrance Orr:I'd even argue that, you know, PhDs are, you know, actually creating more enduring companies when you teach them the skills of entrepreneurship. I think I don't know what they're doing at Flagship Pioneering, but they're doing something really well to recruit, you know, what they call venture scientists. You know, there are PhDs who they bring into a venture fellowship, you know, for a summer or three or four months and they teach them, you know, basically venture building inside of inside of Flagship Pioneering and how to sort of like use science based evidence and hypothesis testing towards venture building. So they speak the language of the PhD and the scientists a little bit, but also show them how to take risk in incubating new companies. So, I'm gonna give a shout out to flagship pioneering because they're clearly doing something right.
Terrance Orr:They incubated Moderna during COVID. Everybody knows about Moderna that IPO ed and so on and so forth. And I think I wanna I wanna say they're also responsible for 25 other companies that have IPO that they've incubated. So they're doing something right in terms of matching the PhD skill set with the risk taking and the experimentation piece of how entrepreneurs go about trying to build enduring companies. So I think that's interesting and I think we're going to see more of those models as we sort of evolve.
Rachel Burton:Is there EIR specifically at Flagship? I know that there is some level of that at Activate. Those might be good folks to have on the show.
Terrance Orr:Yeah, I mean, they have they don't call them EIRs at at flagship. They call them venture scientists. So that similar role where you hear somebody call themselves a venture builder versus a EIR.
Ilya Tabakh:Yeah. And I think at Activate, they ultimately become fellows, but they're all working on their own kind of venture. And so I've actually run across a bunch of Activate fellows that were kind of working on their venture. And it's funny because there's sort of a long time arc there too, right? Because some of them are just getting out of academia and then some of them have successfully commercialized and launched the company, raised funding.
Ilya Tabakh:And so they've been running for a while now. So it's interesting to sort of see them across different business life stages.
Rachel Burton:Actually, in the last two or three months that I was an EIR, I was mentoring a young woman who had just finished her Ph. D. And she I was like, it was kind of new activate was kind of new to me at the time. And I was like, I think you're a perfect fit for this. And she was accepted as an Activate fellow.
Terrance Orr:Here's another question that we have for you just before we're about to sort of wrap it up soon. And then I'll pass the ball back to Ilya, which is, you know, I love to ask people, you know, we have these very sort of, quilted careers where there's not in a straight line, there's sort of things that sort of happened along the way and we sort of adapted along the way. And because of that, our careers look like a quilt. And oftentimes people think these things just sort of just happen. And I love to talk about things that are not on your resume, things that are not professionally related to you.
Terrance Orr:So can you tell us something, right, that's not on your resume, that people wouldn't get from looking at your LinkedIn profile?
Rachel Burton:I would say, I decided to build my own lab during COVID, to do research, you know, and to also teach my teach my children, you know, science experiments. You know, I don't know if it's very obvious that, you know, I originally in my career thought I wanted to be a farmer.
Terrance Orr:Okay. You say some more.
Rachel Burton:You know, farming brought me to working on broken tractors, ended up working on engines and fuels, which ended up kind of morphing into, you know, a quilted trajectory on innovation.
Terrance Orr:Fair enough.
Rachel Burton:Because at the end of it, farmers in this country, you know, in many countries are natural innovators because of what you had said earlier, Ilya, around, necessity being the mother of invention. And many times farmers, people who are actively in the field working and they encounter a problem that they have to fix right now, they'll have to innovate and figure out some kind of solution. So if it's a tractor or if it's a challenge with a plant, they end up finding a solution that they didn't start out their day with.
Terrance Orr:That's right. And farmers also plant seeds that other people get to bear their fruit of later on. So there you go. And they put all the hard work in to do it.
Ilya Tabakh:And I love it because throughout this episode, we've planted a bunch of seeds. There's even some sort of requests for or kind of thinking about what are some interesting models in academia, venture studio. I'm excited for sort of our audience in the EIR network to sort of listen to the episodes and maybe, you know, contribute and point out some things that we're not even aware of. You know, I think we named a couple of pretty interesting programs and some things that we're excited about, but it's gonna be great to hear what what folks that are kind of listening and engaged are excited about as well. So, Rachel, as we wrap up here, what's a good way for folks to connect with you and kind of follow your work and, you know, kind of reach out if it makes sense?
Rachel Burton:Sure. I would say probably LinkedIn is one of one place I'm actively working with a wasted energy firm called Process Works and Process Engineering. We like to get our hands dirty there. And I'm still engaged in the entrepreneurial community here in Central North Carolina, an advisor, grant reviewer, supporter of NCIDEA.
Ilya Tabakh:Well, really appreciate the time and the discussion. As always, there is a couple turns and we got to dig into some awesome and somewhat unexpected topics. And so really appreciate you spending some time with us and, you know, helping us build the EIR Live network.
Rachel Burton:Excellent. Thank you.
Terrance Orr:Thanks for joining us on EIR Live. We hope today's episode offer you valuable insights into the entrepreneurial journey. Remember to subscribe so you don't miss out on future episodes and check out the description for more details. Do you have questions or suggestions? Please reach out to us.
Terrance Orr:Connect with us on social media. We really value your input. Catch us next time for more inspiring stories and strategies. Keep pushing boundaries and making your mark on the world. I'm Terrance Orr with my cohost, Ilya Tabakh, signing off.
Terrance Orr:Let's keep building.
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