Emerging innovation with cabbages, eyes, cows and EVs on The Future, This Week

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Sandra So, Kai, what should we talk about today?

Kai Well, you had something with proposals and ponies.

Sandra Yeah, it's actually a story in the New York Times, titled, "He Promised a Dreamy Wedding Proposal. Fans Got a 5-Hour Sale."

Kai With a pony.

Sandra Well he rode in on a pony, and then proceeded to sell people things for about five hours. This was a Chinese influencer and remember how during Corona we spoke about the spike in...

Kai Yeah, I remember that. Live-streaming with Lipstick Brother No 1, for example.

Sandra Yep, indeed, live-streaming sales were a huge hit in China during and after the pandemic and people were buying everything from farm produce, apples, vegetables, flowers, to clothes, food, makeup, even cars, movie tickets, all via people doing live-streaming events during which they would sell things.

Kai But this sounds like no one bought his proposal.

Sandra She did say yes. But the guy had about 8 million followers who were promised to see a live stream of his wedding proposal and instead got five hours.

Kai So he stretched out this suspense before the question. So he went down on his knee and basically sold stuff for five hours, that what we're talking about?

Sandra His proposal raked in about $7.2 million worth of purchases.

Kai Since we are a business school podcast, I'm tempted to ask what was he selling?

Sandra Perfume, pyjamas, lipstick, necklaces, mobile phones, pretty much everything. I think there was even a car involved. But he did get banned off the platform. And I think this doesn't just go to the popularity of live-streaming events, but also to the blend between ecommerce and social commerce that we've seen and discussed in China before. We discussed Red,

Kai Xiaohongshu, the episode we did with Kishi, one of my favourite episodes.

Sandra Which we'll put in the shownotes, but which showcases a very different blend between what is considered social and what is considered commerce, where people get much more involved in influencers lives and their day-to-day activities.

Kai Why did he get banned though?

Sandra He got banned because people thought they were being duped. They were promised engagement and instead they got a five hour sales pitch, and that was too far.

Kai So people thought that, you know, tuning in for a wedding proposal and receiving five hours of product placement was a bit too much?

Sandra A little bit overboard. So the platform did ban him and there were tearful apologies on Weibo afterwards.

Kai Too much. Okay. Three and a half hours would have been okay, but five hours, not cool.

Sandra We'll put all the links in the shownotes, including to our Red social commerce episode, and we'll park this for now.

Kai I have another New York Times one that we could talk about. Apparently, there is a crisis with global cactus trafficking, a thorny issue.

Sandra And this was really interesting to us, because we never really think of black markets for plants. We can think about it for rhino horns, and we've talked about that issue previously on The Future, This Week. There's, you know, various parts of animals from tigers to sun bears to pangolin scales and so on. But we never think about it for plants, and indeed, for cacti and succulents and even orchids, there is a really big black market. And some of these cacti are seriously endangered,

Kai And they take forever to grow. Some of them mature over 200 years or so. And then they're being ripped out and trafficked,

Sandra And 30% of the world's nearly 1500 cactus species are threatened with extinction. And that's a huge number. And the article makes the case that there is a thing called 'plant blindness', which is our tendency to ignore this part of life, we think about animals threatened with extinction, we've thought about bees being threatened with extinction. But we never tend to think about plants other than in the case of for instance, deforestation.

Kai And that is not just the general public, but that's also in border control, for example. A lot of emphasis is on trafficking of animals and animal products. But plants seem to slip under the radar.

Sandra And interestingly, there's a link to our first story in that the people who poach these plants are actually live-streaming their poaching, asking customers which plant they want from the field.

Kai And so the article really raises awareness for this issue, and it shows how widespread that is and that there's a trade for it and collectors who basically want the rarest of species in their houses.

Sandra And the article also makes the case that this has been made a lot worse by the pandemic. Remember our plantfluencers from one of our Corona Business Insights? Cacti and other succulents have been featured broadly on social media and on Instagram. And they're all these indoor plant influencers.

Kai Yeah, people stuck at home wanted to, you know, surround themselves with prickly things.

Sandra And with cacti, really the only option is to buy one because many of them, as you've said, take about 200 years to grow into something that can be put on Instagram.

Kai So our advice to those people is get yourself pricked with the COVID vaccine, get out of the house and leave those plants alone.

Sandra There were also the big, big tech lawsuit stories this week, one just starting and one just ending. Just starting in India, WhatsApp is suing the Indian government over the new media rules.

Kai So India is mandating all platforms to basically make available surveillance data on user communications. And because WhatsApp is end- to-end encrypted, it would basically mean that they would have to break the service and build a backdoor in, or hand data over to the authorities that is currently not being collected. And lo and behold, we find Facebook to be on the side of defending user privacy to preserve WhatsApp's business model.

Sandra So Facebook is arguing that making users messages, traceable will violate the user's privacy, which they argue is a breach of their constitutional rights.

Kai We should also say that Facebook has agreed to comply with the law with the main Facebook platform. This is just about WhatsApp, which is important because India is WhatsApp biggest market.

Sandra The other big story, of course, that's been unfolding over the past few weeks has been the epic Epic, Apple...

Kai Apple…

Sandra Battle, which is now for all intents and purposes over even though it's unlikely that there'll be a ruling till late winter, or if you're in the Northern Hemisphere till the end of summer.

Kai We don't want to be hemisphereist here. It's a thing. I've coined it.

Sandra And of course, Epic Games is suing Apple over the way that Apple runs its App Store saying that this is a monopoly that is charging exorbitant fees for app makers who want to have in app payments. Epic pays a 30% commission to Apple and it's demanding that this be ruled a misuse of Apple's power.

Kai And we will come back to this once the judge hands down her ruling in the case, but it will come down to what she sees the relevant market to be. Epic argues that it's the access to the iOS store, Epic has no other ways to get to iOS customers, then through Apple's App Store, which would make it a monopoly. Whereas Apple says that iOS is just a tiny fraction of all gamers that Epic deals with, so the market should really be all platforms that Epic deals in consoles, Microsoft, Sony Consoles, Nintendo computers, and they say it does not constitute a monopoly because Epic has so many other ways of reaching their customers. So it's really about what constitutes the market here.

Sandra And some really interesting things have come up during the trial, including the fact that Epic does pay more money to both Microsoft and Sony than it does to Apple. But maybe one of the really interesting ones that I really think we should dedicate an episode to, is the fact that it turns out there's no legal definition for what a game is.

Kai I mean, that's an interesting question that philosophers have grappled with. But why does it come up here?

Sandra Mostly because the question is whether or not Fortnite is a game it's very difficult to, to define. Epic has gone to lengths to say it's in fact, a metaverse. And we've talked about that when we did the Roblox episode. And Epic is doing that basically, to try to broaden whatever ruling happens here to all apps in the App Store. Apple wants to narrow it to games, and it's making a games argument. But still turns out there's no way to really define what the game is.

Kai

And we should come back to this and do an episode on this and I'll bring my Wittgenstein.

Sandra

And well, today would have been an opportunity to focus again on big tech, especially with these big lawsuits. We decided to do something else altogether.

Kai So having looked at ponies and cacti, we want to ask what do cabbage, eyes, cows and EVs have in common?

Sandra Well, firstly, we're gonna talk about all of them today, but also they were examples of innovation and emerging industries, some of which are at the very beginnings at the cutting edge, some of which are further along, and all of them have innovation, research and commercialisation at their core.

Kai Okay, let's do this.

Sandra Let's do this

Intro From The University of Sydney Business School, this is Sydney Business Insights, an initiative that explores the future of business. And you're listening to The Future, This Week where Sandra Peter and Kai Riemer sit down every week to rethink and unlearn trends in technology and business. They discuss the news of the week, question the obvious, and explore the weird and the wonderful.

Kai So what's our first story?

Sandra So let's start with cabbage.

Kai Cabbage does make for a good starter.

Sandra And technically, you could still actually eat this cabbage. The University of Tokyo, researchers pressed cabbage, pumpkin, orange, onion, banana peels and some other stuff into a strong construction material. And it turns out if you press cabbage, it makes something that is three times as strong as concrete. So this is the healthy version of the Hansel and Gretel house, not gingerbread, and not candy, but rather cabbage, seaweed and banana peels.

Kai And quite interestingly and disturbingly, the researchers in their press release put emphasis on the fact that they were able to preserve the taste and even seasoning of the materials that they use.

Sandra Might be hard to chew.

Kai Well, funny you should ask, there is apparently a difference between strength and hardness. So while this material is quite strong, it is still edible, so you can still bite it and chew it.

Sandra So the story was quite remarkable in that you can leave it out in the air for months and the taste didn't change and there were no issues with a rotting or decaying, insects, didn't want to eat it. The idea here was to use food scraps as building material, which was quite an interesting one. given the food waste scale problem, there's about 1.3 billion tonnes of food wasted worldwide each year.

Kai So the attempt here to use advanced material science to figure out what we could do with those food scraps, which of course will pose logistical and practical questions should this technology be ready for a wider rollout.

Sandra It is interesting to consider that we might then end up with an additional bin. That's the construction bin, where all your cabbage and banana peels go.

Kai With instructions of which materials work best because pumpkins apparently didn't work as well as Chinese cabbage.

Sandra Yes, pumpkin peel was the exception, it didn't pass the strength test. But Chinese cabbage was the best, three times stronger than concrete. And to me, this was interesting for a number of reasons. One is that construction is still one of those industries, that's been slowest to change. And we've come across many stories over the last few years around bio bricks, around sand bricks, all sorts of different materials used for construction, but none of them have really achieved the scale needed to penetrate the industry. And this might be the case with food scraps as well.

Kai It's a fairly tightly regulated industry that is also ripe with lobbyism. So very hard to change. There's the tiny house phenomenon, there's 3d printed houses, a lot of those innovations come up against the fact that councils won't allow it or they won't comply with certain building standards that favour more traditional materials, even though they are objectively inferior when it comes to all the things we want in a house, to fight climate change, for example.

Sandra So to me, it's also one of the stories like the leather made from mushrooms or cacti or remember the fungi sandals?

Kai Fungi sandals, yes.

Sandra Where the step from the innovation itself to actually commercialising that innovation and building business models around it is as big as the research step.

Kai And what also stands out in this and indeed our next story is that they are interdisciplinary problems. So in this particular one, we have material science, of course, but we also have food sciences, we would have the logistics, issues, regulation, building codes, construction. So a lot of issues that come together to solve these problems. And that's indeed the case with the eye story as well.

Sandra The eye story is a really good news story, in that scientists partially restored the sight of a blind man with new gene therapy. And they use the technique called optogenetics. And it's actually much cooler than it even sounds in that they use proteins derived from algae and other microbes to make nerve cells sensitive to light.

Kai They're actually glowing, so bio luminescent algae

Sandra And then they injected these using a viral vector like the ones in the COVID-19 vaccines to deliver this gene to cells in the eye that are not normally sensitive to light to make them receptive to light, to things like amber or red light. And once this gene is delivered into the eye, it makes a protein that is sensitive to light, much like the one made by algae to look for sunlight.

Kai And it doesn't end here, because they didn't just repair the eyesight of this 40 year old Parisian man, they created a new way of seeing that also needed a pair of goggles. The goggles have cameras that basically translate the incoming picture into light pulses.

Sandra So these glasses record what is happening in the environment, they have little cameras in them and transform these images into light pulses that then the retina can perceive.

Kai And so the man's eye doesn't really see in a conventional way, rather, those cells had to be trained over a period of six months to stimulate the man's brain such that he was able to pick up light and dark contrast and learn over a period of time to recognise objects in the environment. So basically taught the man's eye and brain a new way of seeing.

Sandra And again, a small COVID pandemic footnote here, because this almost didn't happen because by the time they had done all the research and prepared all the trials and tests and have injected these patients with this viral vector, the pandemic happened, hence they didn't have the opportunity to train the patients to see in the new way, except for this one person. And it worked. And this goes to, and again, we've done an episode on this to the havoc that COVID wreaked through a lot of long term research and scientific experiments that had to be stopped and started from scratch because of the pandemic.

Kai So we thought this is a really cool science story on the one hand, and the research is published in Nature Medicine, and we will put the link in the shownotes. It's also a story of incredible innovation that involves people with expertise in genetic ophthalmology, biology, hardware engineers to build the goggles, software engineers to translate the imagery to light pulses.

Sandra And also Gensight Biologics that company that commercialises gene therapy and that some of these researchers are involved in.

Kai And also plants curing blindness, not plant blindness.

Sandra Which somehow brings us to cows. And this was another story of innovation and emerging industries. And this one was researchers trying to find the cow of tomorrow. So the cow cells that will make up tomorrow's burgers. So this is following in our stories around cultured meat and cultured meat has been in the news on and off for a while now. And we recently spoke about cultured meat being approved for consumers for the first time, and this was happening in Singapore where chicken nuggets grown in bioreactors were given the green light to be sold for human consumption. And this story highlights the struggle to bring cow meat cow burgers to the table.

Kai And so we approached this story with an expectation that we're looking at finding the perfect cow meat to make the perfect lab-grown steak, much like back in the day the search for the perfect chicken of tomorrow that would become the staple breed of the industry. But it turns out that the issues that the sector, these around 40 startups and companies that are crowding this field, are grappling with are of a much more basic nature.

Sandra So if we are to follow the interest that big companies and that funding has pointed to in this industry, we're very close to cultured meat burgers being sold at McDonald's. And whilst there's been big progress with plant based alternatives, we're now talking about cultured meat. So using cells to grow the meat and getting those cells in the first place is the make or break for this industry.

Kai Yeah, so the actual issues this sector grapples with belies the hype that we see in the media surrounding it. So it turns out that one of the biggest problems is that basic research into growing reliable muscular cells from the starter cells that you need to actually grow meat in the lab isn't that easy, precisely because what is called cell lines, the kind of well researched cells that we have from humans in medical research that we use to create vaccines to do cancer research just don't exist when it comes to...

Sandra What exactly do these cell lines do?

Kai Well, cell lines are cells that are being cultivated and shared among scientists, among researchers, they're typically well studied, they're easy to access, and everyone can basically use them.

Sandra So what you're saying is that there are these cells that are the same cells that everyone does research. And so if we're all doing cancer research, and we're all accessing the exact same cells, and we're all doing our studies, and all the data that we share is about the same exact cells.

Kai Exactly. And there's actually a movie about one of the most famous cell lines that were taken from an African American woman by the name of Henrietta Lacks who died of a cervical cancer, and we're gonna put the link in the shownotes. So these HeLa cells have been the basis for polio vaccine development for cancer research for decades, and a staggering 50 million tonnes of these cells have been produced, they're basically immortal cells that can be replicated indefinitely.

Sandra So to jump-start progress in this industry, you would basically need the same thing for cows. But when it comes to cows, there is nothing available at this point at all.

Kai No. So you would need the cell lines taken from cows to do reliable research. And it turns out that, for example, the way in which we learn how to grow muscular cells, which you would need if you want to grow a steak, from embryonic cells, we're using cell lines taken from mice at the moment, which do not make for good wagyu steak, as you can imagine.

Sandra So the problem for the cultured meat industry is that at this point, there is no sharing. So every company basically starts from scratch with their own cell lines and have to do all of the research on their own on their own cells.

Kai Yeah, and because it's a commercial Endeavor, these companies do not have any incentive to actually share their cell lines. So everyone wants to be the first to patent their cell line as the basis for growing cultured meat, which really inhibits progress across the industry. Because it's a lot of basic research involved, it takes a long time, and every company seems to try to go it their own way. There have been some efforts, there's a not-for-profit, which has offered to bank and then share cell lines across the industry. But so far, they only had one submission,

Sandra The sea bass.

Kai The European sea bass, which is not quite the backbone of the cultured meat industry. So we need a lot of basic research. But we do not have a lot of collaboration, as we would normally see in scientific medical research.

Sandra Especially at the beginnings of industries. And remember our story with the chicken of tomorrow after the Second World War, where companies were trying to find the perfect chicken that had, you know, big thighs and big breasts that could be used as a replacement protein for beef or pork?

Kai And that was a national initiative at the time, wasn't it?

Sandra Yeah, I think about 40 organisations that collaborated and incentivised all farmers to produce and create these chickens, there were national competitions. But there was a lot of both competition and cooperation to get that jump-started.

Kai And interestingly, we have about 40 companies that are named in the wired article as well. But because everyone wants to be the first and wants to own the patents, that collaboration doesn't happen. But it's not just the basic research that these companies have to figure out.

Sandra There was a lot of innovation, and I do recall us talking about this on the podcast previously, for getting the cost of a burger down from $300,000 to $50. But the real step towards commercialisation would be getting it down from $50 to $10, which seems to be much, much harder.

Kai So on top of the basic research, companies have to master the process of creating meat at scale, and then optimise it to the point that it becomes commercially viable. And at that point, we're only talking burger meat, the next big step is to also figure out how to grow muscle cells with the right amount of fat to actually create a steak. Because after all, that is the holy grail of the cultured meat industry to create that lab-grown steak. And so we're at the very beginning of this process, having to figure out basic research, the process of mastering it, and also which cow, which cells to use to, you know, create a nicely flavoured steak. What makes the best steak?

Sandra And that's not an easy question to answer by any means because first of all, you and I might like different steaks, different cuts, different parts of the cow, some buttery or some chewy, more flavoursome.

Kai Some like it on the bone, you're not gonna grow that. But you know, some people want to have very lean meats, some like the wagyu which is marbled.

Sandra But to me, this article seems to be asking the wrong question to begin with. They seem to be in search of the perfect cow. And it reminded me of Malcolm Gladwell, his TED talk from 100 years ago.

Kai 2004, not quite, yeah.

Sandra In the very early days of TED talks. And he was talking about his friend Howard Moskowitz, who was a marketing researcher, who first after finishing his PhD at I believe it was Harvard, went to work for Pepsi. And one of the first jobs he had at Pepsi was to figure out for Pepsi, how much sweetener they should put in their Diet Pepsi, and he was asked to basically find out from people what makes the perfect Pepsi. And once he got his data back from people, sampling Pepsis of different sweetness, he couldn't make any sense of it. So I think in the end, Pepsi decided to let him go and just went with something down the middle. But this kept bugging him.

Kai And he came to understand that they were actually asking the wrong question.

Sandra Indeed, they were looking for the perfect Pepsi when they should have been looking for the perfect Pepsis. This doesn't sound big. But for him, it was a really, really big revelation.

Kai Because it pointed to the problem of choice or creating products for different tastes.

Sandra There wasn't one perfect one. Some people liked it sweeter, some people liked it less sweet. And he actually built his entire career and reputation of this. From this, he went on to work with Campbell, who makes Prego the pasta sauces, and he became incredibly famous for pointing out the fact that there was no one perfect pasta sauce, but rather perfect pasta sauces. And his chunky pasta sauce, and there wasn't the chunky one on the market until Howard Moskowitz, actually made Prego and Campbells about $600 million.

Kai And so there's a learning in pasta sauces for the cultured meat industry, which is that once we move beyond the more homogenous scrambled up burger meat, to creating the perfect steak, or finding the perfect cow, the perfect cells for steak meat, we're actually looking at a much more complex problem because we will want to create different cell lines and different kinds of cultured steaks. So another layer of complexity that this industry will have to grapple with, as they're trying to create commercially viable muscular meat products.

Sandra And now for something not completely different, electric vehicles.

Kai Another story this week about an industry that is still finding its footing. An article in The Verge, reporting on electric vehicles startups that have recently raised a ton of cash using SPAC based IPOs, by the way, a topic for another day, which are cashed up but face a lot of problems.

Sandra So these are special purpose acquisition companies?

Kai Basically a sped up process to do an IPO, an initial public offering of a company, bringing it to the share market. So quite a few of these electric vehicle startups, so the second tier after Tesla have made it to the financial market by grappling with all sorts of problems in bringing their products to market.

Sandra So while some of these electric vehicles startups are in the cabbage, concrete, cultured cow steaks land like Nikola, which was the buzz in the industry for having hydrogen trucks a few years ago. Then it turns out it wasn't all that easy, and federal prosecutors are investigating the claims that the company made to investors. There are however many other companies in this basket, Lordstown Motors, Lucid Motors and so on, that do have products that they could bring to market.

Kai But it turns out that what is largely engineering-focussed startups that concentrate on creating great products, new battery technologies or electric vehicle offerings in product categories that Tesla isn't active in. It isn't all that easy to create operations at a scale.

Sandra So most of the companies that are in the Western basket here have been grappling with the real complexities that the automotive manufacturing industry presents, especially for a young startup that has to now solve and bring together this entire supply chain network of companies that contribute to their product. This has been, of course, compounded by the pandemic and by chip shortages and all these other things. But nevertheless, all of the Western companies have really struggled to bring their products to market, even with the billions of dollars of capital injections in this industry.

Kai Some companies have taken over decommissioned or superfluous plants by other car manufacturers, which now have to be retrofitted to produce electric vehicles, which doesn't seem to be that straightforward. Others have entered into deals with established car manufacturers such as startup Canoo, who wants to build lifestyle vehicles and mini buses, they partnered with Hyundai but that deal has recently fallen through. So a lot of these companies are in all sorts of trouble at the moment.

Sandra So it becomes interesting to see what will the future of this emerging industry depend on? As you mentioned, there is first the question of the types of cars that are being produced, and do people really want something other than a Tesla?

Kai Because let's not forget other high-end manufacturers such as Mercedes, Audi, BMW, they all bring their luxury offerings to market right now.

Sandra And remember, a few weeks ago, we got the sales data for Europe, and Tesla wasn't even in the top five best-selling electric vehicles. A lot of these companies also seem to be focused on utility vehicles, there's been the long-standing conundrum of whether to build your own factories or outsource the making of these cars. There are questions around what to do with the Chinese market, let's remember that the Chinese government has helped stimulate the electric car demand with subsidies that are still ongoing but are expected to be phased out fairly soon.

Kai And we mentioned recently that the best-selling electric vehicle is actually a very cheap and small Chinese car, a segment completely neglected by Western startups.

Sandra And also one that is seldom mentioned in many of these articles. So Chinese startups in electric car manufacturing have actually been thriving with startups backed by Alibaba, Tencent, Xiaomi, who have all already broadcast to the market, and who can leverage the infrastructure and supply chains in China to bring those much faster to the market.

Kai So despite billions of dollars being poured into electric vehicle startups in the West, it remains entirely unclear if any of them will be successful. Given that Tesla has had a head start, China is already producing EVs at scale and the established car manufacturers are entering the EV market with serious intent right now.

Sandra But I think this is where we have to leave our stories of innovation and emerging industries for today.

Kai Cabbage, eyes, cows and EVs on The Future, This Week. Thanks for listening.

Sandra Thanks for listening.

Outro This was The Future, This Week, an initiative of The University of Sydney Business School. Sandra Peter is the Director of Sydney Business Insights and Kai Riemer is Professor of Information Technology and Organisation. Connect with us on LinkedIn, Twitter and Flipboard, and subscribe, like or leave us a rating wherever you get your podcasts. If you have any weird and wonderful topics for us to discuss, send them to sbi@sydney.edu.au.

Kai By the way, do you know what I got as a, as an ad on the cabbage story?

Sandra I got knives, what did you get?

Kai Yeah, University of Tokyo, Japanese kitchen knives.

Sandra I got Shun knives.

Kai How about that?

Sandra Algorithm, ay?

Kai Yeah. Cut your own bricks.