We are here today with Ibrahim Husseini, Founder and CEO of FullCycle, an investment firm focused on solving the climate crisis by backing companies with climate-restoring technologies, accelerating their growth. Raised in Saudi Arabia by Palestinian refugee parents, Ibrahim moved to the US for college in the early 1990s and made his initial fortune from inside his college dorm room, starting a nutraceutical distribution company, which he later sold in 1997. Ibrahim has been an early investor in Thrive Markets, Tesla Motors, Bloom Energy, Aspiration, Cornerstone Capital, and Clean Choice Energy. Welcome, Ibrahim.
Tell us where you are in terms of today’s current circumstance regarding the coronavirus crisis. Normally, we may have opened up with your work at FullCycle, but it’s pretty hard to ignore the current circumstances in terms of the pandemic. How are your personal and impact selves meeting the moment at this time?
It’s been reflective and bittersweet, watching the economic devastation so many people weren’t set up to withstand. People are suffering, and we’re just getting started. That really breaks my heart.
There have been a lot of requests for philanthropy around medical supplies. Many people have been stepping up in that area. I’ve focused a lot of my giving as short-term loans to small business owners to help keep their businesses alive.
Somebody might have expanded their restaurant or their hardware store just in the moment where the whole world shut down. That breaks my heart because, having made my money as an entrepreneur, I know how hard that is and how much hope and dream space we create when we’re building a business. It’s always towards a specific outcome and experience. To have that crushed because of no fault of the business owners has weighed on my heart.
It’s also bittersweet because of how clean the air is and how quiet Los Angeles is. It’s such a delight to just go for a stroll now without all the noise pollution, the light pollution, and the air pollution. It’s crazy to say this right now, but I am not looking forward to having all of that come back. I’m appreciative of how even the quality of the light has changed with so fewer particles in the air creating all these unnatural colors. The pinks, the purples, and oranges are different. It’s just a pleasure to inhale.
What do we need to do as an impact community to carry forth some of these things that we may be enjoying now? There’s been destruction and dislocation, as you mentioned. Yet, all of a sudden the air is cleaner. Things are quieter. You can feel your heartbeat. You have this authentic presence, moving through nature. Rather than just returning to our frenetic pace and flooding the roads with cars, airplanes, and all of the other pollution-emitting technologies out there, what is it that we can do now, rather than live in fear and anxiety, to prepare ourselves for when this crisis passes? How do we make this window of possibilities a reality?
That’s a great question. I’m going to reach out to the mayors I know in the US and encourage them to find ways to strengthen internet infrastructure by accelerating the rollout of fiber optics in cities so that a lot of us can continue to work virtually, without having to get in a car or contribute to urban sprawl, to traffic, and to pollution. We’re now used to it. We know it works. Business is being done every day. We’re all wearing shirts of different colors and boxer shorts on the bottom, and we’re fine with it. It’s working fine.
Not every industry, not every meeting, has to be “in place.” We don’t have to jump on planes anymore. I’m sorry for the airline industry. I’m sorry for the automobile industry. But, the only constant in life is change, and this is a change that we want. We want fewer people commuting to work, yet being effective and efficient, working out of their homes.
I also want to encourage these mayors to maybe even invest or create incentives for investment in autonomous electric transportation, to a degree that ride-sharing companies can drop their prices to a level where it doesn’t make sense anymore for anybody to individually or drive a car. If the car is autonomous and electric, all the profit ends up going to Uber, Lyft, or other ride-sharing companies, so even if they lower their prices considerably, they’ll still make a very healthy margin. If their cars are electric—meaning they’re powered by either electricity or hydrogen, we end up with a much quieter, cleaner-emitting vehicle. And, we’d need fewer of them on the road. If a car—AKA a transportation robot—is running 100% of the time transporting people, then we’d need 95% fewer cars.
We can start walking on the streets at that point.
Exactly. We can make sidewalks much, much wider because there’ll be no cars parked on the side of the road. We can have more space for urban gardens that contribute to lowering the urban warming effect, keep the air more moist, and eliminate a lot of the pollution. There’s so much that we can do in this moment of “reboot and restart.” I hope we seize it and that we don’t get sucked back up into the marketing models that are going to bombard us right after all this goes away. The “Are you unhappy in this area? If you take this cruise, isn’t life going to be grand again? All you can eat, all you can drink, all your problems gone! You’re going to be handsome, taller, thinner, smarter, richer, if you just buy my product, this reversion into being consuming hamsters on the wheel, just working to send someone else money. It’s so exhausting. It’s not a life of quality. It’s polluting. There’s no gross domestic happiness involved in that.
Some people have said that tech has a grip on public or collective consciousness more and more—an unprecedented move to tech during this time. As I see the situation, we’re all mediate animals at the moment. What does life look like in an even more teched-out world?
There are two schools of thought around the pending robotic AI “takeover.” There’s the doom-and-gloom of mass unemployment, of a singularity so much smarter than us that’s going to turn human beings into the Matrix, et cetera. That’s one school of thought. I am of a different school of thought. I don’t invest in tech for the sake of investing in tech. I only invest in the things that I want to see happen in the future.
The world we live in today is the world that we invested in 30 years ago. If we make our investments today with the lens of what world we want in 30 years, that is the world we’ll see 30 years from now. That is the thesis of my impact investing. It’s not this haphazard “whatever makes me feel bad in the moment” is where I direct my capital, or wherever all my other rich buddies are putting money, that hot new thing that we’re going to abandon five minutes from now.
I get people who just wake up one day on the wrong side of it and say, “I’m taking a break from climate,” and they go along with a different trend and invest in refugees or such, which is great. I’m glad that they do that; for me, however, investing isn’t about how I feel in the moment. It’s about the future I want for myself and the rest of the world.
My vision of what a future with robotics and AI? Well, I see a lot of the jobs that exist today, but that are mundane and unfulfilling, will go away because the task can easily be accomplished by a robot. That frees us up to imagine what jobs look like in the future. If you told people 20 years ago that we’d have a phone that allows dual-speakers to get on a call with somebody across the world and teach them another language as a means of earning income, they’d think you’re talking about the Jetsons. But, I’ve been learning French because I have an app that connects me to all these teachers around the world. They teach me French; they correct me, and we laugh. I pay them between $10 and $15 an hour, and most of them are people who weren’t French teachers six months ago.
In short, we have all kinds of opportunities to contribute to each other and redesign the economy without fear. Intelligent technologies can help us by taking over a lot of mundane things’ we will replace them with other more fulfilling things, things that allow us to have a much richer life instead of a 40- 50- or 60-hour work week grind to pay the bills.
When people find out only in their seventies that their lives were spent predominantly just getting paid to take care of the bills, there’s no personal fulfillment in the process. Technology opens up the possibility of more choices, and career fulfillment becomes much more possible for the average employee, because a lot of them will be independent.
How has that notion of fulfillment led you to dedicate your efforts entirely to climate change? Where did that fire come from? Help us understand the “why” behind where you are today.
I want to live in a world that works not just for me, but a world that works for everyone and everything. By everything, I mean all the 10 million other creatures that also call earth their home and have evolved over billions of years, just like us, and who deserve to live and thrive just like we do. We’re one species out of 10 million different multi-celled organisms on this planet, yet tend to dominate the world to such a degree that nothing else is allowed to live in and thrive on this planet. Many of us seem to have an insatiable appetite for resources, a mindset in which nothing is ever enough.
And, we don’t just do this to other creatures. We also do it to ourselves. The wealth disparity is massive, we’re always fighting for more of the resources, and yet there’s no fulfillment in that, because it takes energy to ignore injustice. It takes energy to ignore the homeless encampment while I walk to my $12-a-box-strawberry organic grocery store. It takes energy to ignore the fact that millions of people are filing for unemployment because they don’t have a wealth advisor, someone really good at making money in a public equities account as the market crashes and recovers. The game is rigged for those with money; that’s a whole other story.
But, that’s not just. It’s not just to rob the future from your child and every other child being born in a world where we have already started to experience the negative effects of climate change. That is a very, very unstable future. Our children didn’t do anything to contribute to that. The poor of the world didn’t do anything to contribute to that, and yet are adversely be effect by its impact.
So, why did I do this? I can’t pretend that everything’s okay while I continue to indulge in whatever “shiny bauble” is put in front of me right now, or revel in it when people give me social accolades, clap, and tell me I’m “awesome!” Then, I might think “Oh, I’m awesome,” and then live my life inside that lie. I just can’t do it. The only thing I can do is be as effective as I can in reversing the trajectory that we’re on.
I’m audacious and, I believe, talented enough to actually make a dent in the problem. We all take inventory of the gifts that we have from time to time. Mine includes a lot of experience, a great network, and deep understanding of the problem and the market-based solutions to it. I’m not a government person; I’m not an NGO person. I’m a private sector person, compiling models that actually affect the solution. I have the capability nexus to make a difference. Knowing that I’m a lousy ignorer compels me to put my gifts into action. That’s what I did in 2013, and then, again, in my second fund in 2019.
There are certainly a lot of shiny objects when it comes to technology in the climate crisis. If I understand the FullCycle fund, you’re choosing to say, “Hey, that’s all great. Go ahead and work on all that innovation, but there’s already stuff out there that works quickly at scale.” Is that the right thinking around your fund and your current team’s effort? What’s happening out there as a result of that work?
The analogy I give around technology is that we are so enamored with technology that we think the solution to everything is to invent new technology or discover new technology. Here’s an interesting data point. I’m an early investor in Tesla. Guess what the penetration of EVs are in the world 17 years later?
I have no idea, but it’s probably a lot less than what I think it is. Is it about a 5%?
Less than 1%. This is how long it takes for new technologies to take hold. People say climate change is a race against time. We’re already about 30 years late to addressing it. If we have a fire in our backyard, the solution is to grab a fire hose and put it out, not invent new firefighting technology. It seems exciting to invent new fire-fighting technology, but it doesn’t address the problem. It just feels like it addresses the problem. When I say we are unapologetically pragmatic, I mean we are unapologetically pragmatic. We are trying to affect the problem. The first thing we do is we find market-ready technology. NASA and the Department of Defense assign technology readiness levels that go from 1 to 9. We only choose technologies that are a minimum 7 or 8, ready for commercialization. That’s principle number one.
Principle number two is that these technologies must be at municipal scale. They can’t be just a gadget. Climate change is not a problem of plastic straws. The problem is the underpinnings of modern civilization and our systems: our water, energy, transportation, food, and waste systems are the problem. We need systems-scale technologies to replace the existing 19th= and 20th-century technologies currently underpinning the world. These technologies must abate a minimum of one gigaton or more of CO2 equivalent or CO2. We reached that level of scale by choosing technologies that abate the other greenhouse gases, not CO2.
But most people don’t realize that while everybody’s talking about CO2—which, don’t get me wrong, is 76% of atmospheric greenhouse gas—the remaining 24% are other gases that are hundreds and thousands of times more heat-trapping. The misnomer is to call them short-lived climate pollutants. They’re only short lived in their current form and eventually break down mostly into CO2. But here, we have a double whammy. They make up 24% of atmospheric greenhouse gases but are responsible for close to 50% of the warming.
So, we focus on those first, because they’re the low hanging fruit. We find the places in the economy that they’re produced, and we find technologies that are market-ready, designing a relationship with these technology companies such that their products are standardized. They’re not doing these one-offs all the time that take a long time. It’s like, what size plant do you want? Do you want small, medium, or large? Great. It gets shipped in a certain number of containers. We have an agreement to underwrite the plants we produce. We standardize the offering, and we fund the plants. This way, we become an acceleration ecosystem for these technologies. Not only do we find them and invest in them, but we also invest primarily in their projects; that way, we have a mechanism in place to accelerate the rollout of this technology worldwide.
Again, this is a race against time. Fortunately, that model creates an asymmetrical risk-return profile for investors; they’re basically getting infrastructure-tied risk but with PE-type returns, all while getting the highest return on carbon-in as the bonus.
I don’t mean to be down on all the other climate funds; I’m not at all. In fact, I’m an investor in a lot of them, but I also understand that their technologies won’t make a dent in the problem—not for years, nor for decades, because the technology that they invested in early in the pilot or demonstration stage is going to take a long time to become commercial. Then, it has to take hold. Like I mentioned with Tesla, 17 years, and only 0.75%, less than 1%, of all cars on the road are EVs. And, that’s not only Tesla vehicles but all of them.
Where does that inertia and friction occur that even a company as large as Tesla, with enormous amounts of resources, keeps plowing into this? To me, what’s amazing right now about the coronavirus is the amount of immediate coherency: the entire globe has coordinated itself within about 30 to 60 days, and we’re all heading in the same direction, all doing the same thing.
If there’s one blessing in this current crisis, it’s that we realize the entire globe can get on the same page really fast. We could see a similar coherency around anything. We could potentially shift the dynamics overnight. Everybody is almost sheltered-in-place right now, across the whole globe. You can see images coming out. The barber shops are closed in Brazil, India, Saudi Arabia, you name it. Everybody’s closed right now. This all happened within a short period of time.
It’s a crisis of leadership. Inertia puts undue weight on economic growth versus planetary health. Everybody wants to kick the can forward and let it be someone else’s problem. We’re a power-hungry, distrusting divided planet that needs a lot more unification. However, this COVID crisis has woken us up that we are all connected, that we’re all in this together. It’s a perfect parallel for climate, because emissions that happen in Brazil and China affect the food and the agricultural yield in Midwest America and the water quality in Africa. The hurricanes that hit certain parts of the world affect insurance prices everywhere. We are all connected.
The biggest problem we have is that we have politicians who lie all the time and obfuscate the truth. We need real leadership in this domain. We need the wealthy countries and their leadership to lead, to come together and put a global price on carbon that is meaningful enough such that the economies of the world start shifting to a low-carbon future. We have to do that. We needed to do it 30 years ago. That’s how critical this is.
What we’re going through right now with this virus is going to be repeated time and time again. If you want to relate it just to the virus piece alone, not to droughts, not to hurricanes, not to floods, not to all the other catastrophes that’ll come from the climate crisis, but just the viruses alone, I will remind everybody that there are ancient viruses trapped in glaciers and in permafrost, ones to which humanity has never been exposed, but we will be. And, these aren’t just mutated SARS viruses. There are whole new strains of viruses that we’ve never seen as human beings. As permafrost melts and as glaciers recede, the world will meet ancient viruses that will wreak havoc on the economy. If you care about the economy, you’d better fix the planet and the climate crisis immediately.
How do you stay centered in the midst of all this? If I read about this stuff all day and all night, there’s a certain amount of restlessness in my heart, a certain amount of agitation and frustration, asking myself, is this the person that I really want to be when I go into the house and meet my two-year old, and play blocks with him? As we navigate the world with all these uncertainties, how do we stay grounded?
You’ve met my wife. She is an extremely light, joyous, happy being. Being married to her always lifts me up, just having her be herself around me. Even if she’s just around making a sandwich, she’s singing while she’s doing it. Her eyes are bright, and her smile is wide while she’s making a sandwich. That lightens my load all the time.
Children will lighten my load all the time. When I have LPs who join my fund, I always encourage them to put the investment in their children’s names, because that reminds me whom I’m fighting for every day. Innocence brings me joy. And, I just want to protect all of these innocent beings—whether that being is a butterfly, a whale, a dolphin, or children, artists, those that have their being focused on less dramatic matters than people like you and I do.
I want to thank all of you for joining us today on The Journey to Impact to hear Ibrahim Husseini’s story. Thanks to you, Ibrahim. Hope to do it again in the future!
Looking forward to it! Great to chat with you, my friend.