This Startup Is Trying to Replace Eggs — Bill Gates and Peter Thiel Are Already Supporting It

Nowadays, it seems like many aspiring entrepreneurs are mainly thinking of business ideas to disrupt the tech space, like building the next big app or social network. This is not the case for entrepreneur Josh Tetrick, as his startup Hampton Creek Foods aims to replace eggs with quality plant-based substitutes.

Who would be interested in associating with this type of startup, you ask? Hampton Creek Foods has been able to attract known investors including Bill Gates, Peter Thiel, and Vinod Khosla. If that’s not enough to convince you of the potential of this market, check out what the New York Daily News had to say about Tetrick’s company and the growing food startup scene:

[Hampton Creek Foods], which just started selling its first product — Just Mayo mayonnaise — at Whole Foods Markets, is part of a new generation of so-called food-tech ventures that aim to change the way we eat.

“There’s nothing to indicate that this will be a trend that will end anytime soon,” said Anand Sanwal, CEO of CB Insights, a New York firm that tracks venture capital investment. “Sustainability and challenges to the food supply are pretty fundamental issues.”

Venture capital firms, which invest heavily in early-stage technology companies, poured nearly $350 million into food-related startups last year, compared with less than $50 million in 2008, according to the firm.

Plant-based alternatives to eggs, poultry and other meat could be good for the environment because it could reduce consumption of meat, which requires large amounts of land, water and crops to produce, backers say.

We recently had the pleasure of catching up with Josh Tetrick, Hampton Creek Foods’ Founder over the phone. Here, we discuss the conception of his business idea, how he got such notable investors, and disrupting the egg industry.

Give us some background of yourself and your business experience

“So I grew up in Birmingham, Alabama and I was all rearing to be a professional football player my whole life and then realized after a little bit that I probably wasn’t good enough to play in the NFL.

I played some college football for a little bit at West Virginia and then ended up transferring to Cornell and studying sociology and government, and I didn’t really know what I wanted to do, but knew I wanted to get the hell out of America and started working in Sub-Saharan Africa.

I spent in total about seven years in Sub-Saharan Africa everywhere from Nigeria to South Africa to Kenya to Liberia, doing everything from working with the United Nations to the Liberian government, and kind of through those experiences I realized that I wanted to focus on things that the world actually needed. There’s a lot that I think we can do that matters and there’s a whole lot that I think the world really needs and kind of through those experiences in Africa, I was more aware of the little girls living on the street without an education, a billion people that go hungry every single night, 79 million tons of greenhouse gas emissions are dumped in our atmosphere likes its an open sewer, animals live behind the walls of factory farms, and it felt like all these urgent needs are out there and there wasn’t a whole lot happening with the government or non-profit organizations to deal with it.

So I got back to the United States and started thinking about using capitalism for good and had a good call with my best friend in the world, a guy named Joshua Balk about using capitalism for good and he started telling me about food. And the more he told me about our food system the more I was just stunned at how brutal and environmentally degrading it is and that began the journey to do what we are doing right now which is trying to create a model that makes an element of the food system, the global intensive egg industry, completely obsolete.”

When I first read about your product, I completely imagine that your company were literally creating a plant-based egg. But seems like your only product currently is Mayo…

“So we kind of start with the idea that there are 1.8 trillion chicken eggs that are laid every year– 1.8 trillion. And those chicken eggs, 99.9% of the time, come from places that are the epitome of disgusting, chickens crammed in cages shitting all over each other. I mean, it’s really gross, whether someone likes animals, hates animals, or can pronounce vegan the proper way instead of saying “vay-gen,” it doesn’t really matter.

Most human beings look at the situation and it’s like, this is just gross, and about a third of those chicken eggs in America end up in food products. They end up in muffins, in cookies, in mayonnaise for example. The other two thirds, people use them in scrambled eggs and omelettes or things like that.  So our approach is to attack all the markets that caged chicken eggs play in.  So we go along with that, we develop something that can work in sauces and dressings because that’s where chicken eggs play.

We also developed something that’s going to be coming out next year called “Just Scrambled” which is a scrambled mix too.  So we are going full throttle in all these big markets with chicken eggs, this highly unsustainable thing, and again that’s the mayonnaise and even the scrambled eggs.”

Most people in this day and age are thinking about creating apps and impacting the tech space. Did you get any negative feedback from anyone when you decided to go into eggs?

“The only people that respond negatively to it, to be honest with you, is the U.S. egg industry. So this industry where 99% of the eggs come from are these pretty atrocious collectives, they aren’t necessarily our biggest fan. The pushback has been from them.

The egg is the epitome of all things natural and nothing can replace the incredible edible egg.  But just like with cigarette companies in the past, and people who endorse all kinds of things that are bizarre and the antithesis of our values, we think they are doing the exact same thing.”

Walk us through how you began building your business. What was the first thing you did?

“The first thing I did was I started calling around to food companies asking them what they thought.  So asking them why they used the egg in the first place, to places like General Mills or Heinz, and finding contacts within those companies, and just being like, “What do you think?,” you know, “Is this something interesting?,” just kind of learning more about it.

The second thing I did was, I just started reading about plants, the functionality of plants, and just googling “Can plants function like an egg?” An egg has 22 different functions and I just started reading about what plants can do. There’s kind of a combination of understanding through reading the literature that plants are highly functional and through talking to these people that have a lot experience in food, they aren’t using the chicken egg always because they love the chicken egg.

They are using a chicken egg because it’s functional, it emulsifies, it binds, it aerates, it chills, it crystallizes, and then after that I started putting a  plan together and eventually got an introduction to Khosla Ventures and pitched the plan to them.”

How did you get the likes of Bill Gates, Peter Thiel, and Vinod Khosla to invest in you? Were these cold calls or did they come to you?

“Khosla Ventures was an introduction via another entrepreneur in their portfolio.  Bill Gates we met through Khosla Ventures, he’s friends with Vinod Khosla and that interaction happened at an event we had with Khosla Ventures.

Peter Thiel and the Founder’s Fund read about us, or heard about us, and approached us initially with an email.  And in terms of convincing them, you know, Peter Thiel is investing in Elon Musk and SpaceX because we need private spacecraft to Mars one day, you know they are investing in electric cars, investing in advanced medical technology to solve the world’s most urgent diseases.

When you tell them that the cheapest most abundant animal protein on the planet comes from female birds crammed body to body in rusty cages shitting all over each other, they’re like, “give me some of that”.

Let me disrupt that, that’s crazy.”

How involved are they with you? Are they simply just investors, or do they advise you as well?

“Both. They are very involved, they are connecting us and advising us, and helping us… It’s all of the above.”

Have they taught you any new lessons so far?

“I think we think pretty big, but I think you know, CV and the Founders Fund, they don’t want us to think small, they don’t want us to think in terms of being a billion dollar company, they want us to think in terms of monopolizing the market and transforming the world and that vision then pushes me forward and gives me energy. That’s probably the biggest thing.”

Josh Tetrick (right) — Hampton Creek’s offices and test kitchen

What is the most important lesson you’ve learned so far from your personal experience as an entrepreneur?

“That all the rules that we have set, all the rules about how fast we can build a brand, all the rules about who we can raise money from, all the rules about how many people we can hire or not hire, how fast you can go in terms of research and development, every single rule that you think exists, is probably wrong and was probably created by people no smarter than you and no smarter than me. We can look at all those rules and totally ignore them and do whatever we want. We can build a brand in six months. We can have 70 million people hearing about us in a day as we did yesterday. We can sell four times the amount of product than an individual Whole Foods, than the the next closest competitor, not because we look at what the existing date is, or the existing constructs of how fast you can sell something, we can create our own rules. Pretend as if there are no rules and then what would you do? It’s very matrix style. It’s like, you know, when Neo got up there on that building and was able to jump off that building when he realized he’s not constrained by any rules, that he creates it.”

How long do you think it will take for your startup to disrupt the egg industry?

“Certainly in the next 12 months, were going to be-  I mean the egg industry has already launched a campaign against us, so I think they’re feeling we may be about ready, and I think in the next five years, I don’t think you’re going to have a world where chickens are crammed body to body in cages anymore.

I think that is a relic of the past.  Every once in a while you’ll see a horse and buggy on the street, on special occasions. Every once in a while someone might buy a land line for their home, but well, most people buy mobile phones now and people aren’t traveling around in a horse and buggy and I think in five years we are going to be saying the same thing about where we get our eggs from.”