Unlike most of Silicon Valley, Nest co-founder cracks regulatory code with latest startup

The Scene

When Silicon Valley startups like Uber and Airbnb were battling local governments, smart thermostat-maker Nest turned them into customers.

Now as watchdogs look to crack down on the latest tech hype around artificial intelligence, Nest co-founder Matt Rogers is relying on the same, unusual playbook with his new startup Mill, which makes high-tech trash cans that convert household food waste into chicken feed.

Once again he is leaning heavily into federal and local governments, figuring out how to make regulations work for his business. Rogers said half of all revenue at Nest, which was sold to Google in 2014 for $3.2 billion, came from government programs that purchased the devices for customers to reduce their energy consumption.

Mill recently got Tacoma, Washington, and Pittsburgh on board with pilot programs that offer to subsidize the cost of the Mill service. And, at the recommendation of the FDA, the nonprofit Association of American Feed Control Officials added dried recovered household food to its definition of animal feed ingredients, allowing Mill to sell its feed commercially.

Rogers wants Mill to become a service provider of sorts for cities trying to figure out what to do about the food waste problem, and please consumers along the way by getting rid of smelly compost bins.

“It’s literally the same muscles,” Rogers told Semafor. “Instead of meeting with public utilities commissions, you’re meeting with waste commissioners.”

Know More

The company’s policy team, which includes senior veterans of the Environmental Protection Agency and CalRecycle, is working to convert municipalities all over the country into paying customers. Rogers’ pitch is that they can save money and landfill space if they pay for Mill devices in people’s homes, instead of sending trucks to pick up food waste.

Mill’s trash cans work by heating up and churning food waste overnight, converting it to odorless chicken feed (Rogers has actually tasted it). When the cans fill up, the bags of feed are mailed back to Mill, which inspects it for quality and conducts an additional heat treatment before selling it to farms. A Mill subscription costs $33 per month; the vast majority of customers, for now, are private individuals who want to help the environment.

The startup is trying to appeal to consumers who want to reduce their carbon footprint. A third of croplands are dedicated to livestock feed production, and animal feed causes more than half the greenhouse gas emissions associated with beef production. Overall, global food production makes up a quarter of total greenhouse gas emissions.

Reed’s view

The first time I met Rogers, we were sitting in his office at Nest’s headquarters in Palo Alto, where Audis and Teslas filled the parking lot and the building buzzed with hundreds of employees. He had done the unlikely: Successfully created a hardware startup in an era dominated by Apple and a handful of other behemoths.

And now he’s building trash cans for food scraps. But are there really enough people in the world willing to pay $33 a month to put their rotting fruit in the mail to save the environment?

At Mill’s modest headquarters near San Francisco, where the only branding outside was for the last company that occupied it, Honeywell, Rogers started to make sense. The idea behind Mill isn’t all that different from the one that made Nest successful. Before Rogers and Tony Fadell founded Nest, thermostats were boring hunks of plastic made by companies like … Honeywell.

It turned out some customers would pay a premium for a really good-looking, easy-to-use thermostat. But it was municipalities that made the business a runaway success. Governments or utility companies could pay for the thermostats and then remotely control them to avoid brownouts or blackouts.

Now as cities aim to reduce their carbon footprints and meet climate goals, oftentimes in exchange for federal grants, food waste has become a big target for planners. Each piece of food thrown in the trash is like burning carbon without getting anything in return. If it could be used to feed animals, it would reduce the carbon emissions that would have been created to grow food for those livestock. An added benefit is that food scraps that ultimately get shipped to Mill won’t sit in landfills, where they emit methane, a harmful greenhouse gas.

Mill is just starting to get traction, but it’s also a complicated plan where a lot could go wrong. And the list of Mill’s investors appears to be a reflection of that.

Rogers has sought backers who specialize in climate tech. Other than the venture division of Alphabet, the big name Silicon Valley investors you’d expect to see associated with Rogers aren’t on the list.

He described Mill’s ambitions as the “double-black diamond” of startups. “Just building hardware is like a black diamond,” he said. “We’re like a hardware company. We’re a logistics company. We’re a manufacturing company and a regulatory affairs company.”

He said his plan is so out of the ordinary that it does eliminate one threat: Copycat startups, implying that nobody else would be crazy enough to try it. “That’s the moat,” he said.

Kristen Virdone, who worked with Rogers at Nest, left Facebook to join Mill. While everyone else is working in AI, she said it’s fun to tell her friends she’s working on trash.

“It’s super unsexy,” she said. “But when you get to surprise people that trash is actually kind of cool, it’s like the ultimate challenge.”

If Rogers and Mill succeed, it might offer a blueprint for other entrepreneurs. Startups usually either serve government or private citizens. Turning both into customers for the same product can unlock categories that didn’t earlier make business sense. Smart thermostats are one example. High tech trash cans could be next.

Room for Disagreement

As Wired and others have pointed out, Mill produces some greenhouse gasses while it’s trying to reduce them. The can itself consumes as much electricity daily as a dishwashing machine. And shipping the grounds through the mail burns fossil fuels.

Mill’s long-term strategy relies on governments essentially subsidizing the device. But many municipalities don’t offer customers composting as it is, so it won’t be easy to get them to pay for the service.

The View From Europe

Europeans are also grappling with food waste issues but are ahead of the U.S. In Europe, about 17% of municipal solid waste is composted, compared to an estimated 34% of total waste that could be composted. In the U.S., only 5% of food waste is composted.

Notable

• Rogers laid out how he thinks entrepreneurs can tackle climate change in this column. “We as a society are busier than ever, and if the success of a solution relies on people radically changing what they’re used to, it is less likely to achieve systems-level impact. The onus should be on the technology — not on the person — to change,” he wrote.