The Startup Tri-Valley Podcast

02 - From the Battlefield to the Boardroom: SafeTraces CEO Erik Malmstrom

• Startup Tri-Valley • Season 1 • Episode 2

Share episode

Host Brandon Cardwell is joined by Erik Malmstrom, the CEO of SafeTraces, a Bay Area-based technology company and leader in DNA-enabled diagnostic solutions for indoor air quality. Erik is a successful and experienced thought leader driven to create a better, safer, more sustainable world. Previously, he held senior roles at the Office of the US Trade Representative, Farmer’s Business Network, and Cargill. He is also a co-founder of CrossBoundary, a leading frontier market investment advisor, as well as a combat veteran and graduate of U.S. Army Ranger and Airborne Schools. Erik received his undergraduate degree from the University of Pennsylvania and a joint M.B.A. – M.P.P. from Harvard Business and Kennedy Schools.

Brandon Cardwell  0:02  

This is the Startup Tri-Valley podcast, featuring in depth conversations with the leaders who are making theTri-Valley the go to ecosystem for science based startups. I'm your host Brandon Cardwell, Executive Director of the i-Gate Innovation Hub and Daybreak Labs. Welcome to the Startup Tri-Valley podcast. I'm here with Erik Malmstrom, CEO of SafeTraces, a Tri-Valley based company that describes itself as a team of entrepreneurs, scientists, engineers and safety practitioners on a mission to ensure the highest safety standards for the air we breathe. Erik, thanks for coming on.


Erik Malmstrom  0:32  

Thanks so much for having me.


Brandon Cardwell  0:34  

So your background is super interesting, and makes it a little bit tough to figure out where to start. So I thought we'd kind of go all the way back and begin with your military service. And have you tell us a little bit about what that was like. And we'll just come forward in time from there to your current role as the CEO of SafeTraces. So tell us a bit about your background, your military experience?


Erik Malmstrom  0:55  

Sure. So from a young age, I was very clear that I wanted to serve in the military. I have a deep sense of patriotism, it's gonna sound kind of corny. But I just am a proud American and very grateful for the opportunities that the country has provided. For me, I've spent a lot of time outside of the country, including prior to going into the army. And I wanted to give back and to me, the pinnacle of public service is military service, because you're fighting for the country defending it. And that was something that I always wanted to do and always saw as part of my career path. Though, I knew I probably wouldn't be in there for the long haul. At the time that I was in college, and then graduated, it coincided with September 11. And with the wars in Afghanistan and Iraq. So sometimes people ask, was I motivated by September 11, to do what I did. And there are a lot of people who did sign up based on those events and wanting to serve. For me, that was kind of not material, obviously, that that switched the whole dynamic, but I would have served regardless. And, so what I did was I had no commitment in college. Then in my senior year in college, I went to Penn and Philly, I walked into a recruiting station in West Philly, and I went to the army, the Marines and the Navy, and the army made the most sense. And so I signed up for a program called OCS where you do all your training after you graduate. And so that dumped me out into Fort Benning, Georgia for about a year and a half where I started off at basic training and then went to Officer Candidate School, got my commission, Infantry School, Ranger School, airborne school. And then a year and a half later, I got posted to the 10th Mountain Division in upstate New York, in the winter spring of 2005. My unit had just got back from one of the early Iraq deployments.  It was a year out from going to eastern Afghanistan. So I had an amazing experience, taking that 40 person platoon on a year train up and then 16 months deployment to eastern Afghanistan near the AF Pak border, and just had a career experience and a life experience that I will never forget. It was incredibly challenging. We were in a mountainous area that was on one of the main infill xfield routes of Taliban and Al Qaeda fighters going from the tribal areas of Pakistan, in Afghanistan. And as a 26 year old. Officer, Lieutenant who didn't know anything, you're responsible basically for the lives of 40 young Americans, and then going into tribal Afghanistan to not only fight insurgents, but also run major development projects and negotiate with tribal elders. And I had an amazing experience. But it was really hard. We were in a very violent region, three of my guys were killed in a mountainside ambush. My commander was blown up in an IED, along with two other soldiers in our unit fought a lot. And I think that, for me, those experiences, when you compare that to what I would have been doing in a civilian career path, even in the most meaningful of circumstances, if I was in a significant leadership response or position of leadership, or doing really impactful work, it's hard to imagine something that at that point in my career, and even ever to this day, I can think of that would give me the experiences that I had in the military and many of those experiences I continue forward. So, anyway, that was the experience in that After that deployment, I, despite having an amazing time, I just wanted to move on. I wanted to have a civilian career. But I wanted to continue working on issues, similar to what I was doing in the army that had a real impact on people's lives. And I think the broader theme of safety, security, and committing yourself to a mission bigger than yourself, and being in service of others, is something that even as I've gone off into civilian government service and business, both big business and then startups, has always had to be something that's present in the work I do. So. So anyway, here I am, I've had a very nonlinear career path, but the military experience at the front end was amazing.


Brandon Cardwell  5:47  

So you're at Penn, one of the top universities in the country, and instead of going into a private sector role, and you're going to McKinsey, you're going to wherever probably all your classmates are going. You end up in Afghanistan by way of the army. So how long were you in Afghanistan?


Erik Malmstrom  6:03  

I was there for 16 months. So it was six or seven, we had a year deployment, that a month or two out from returning, we were extended for four months. 


Brandon Cardwell  6:13  

One of the first founders that I worked with, I mentioned on the last podcast to Robert Morris, who is the founder of terravion, which is an agricultural imaging startup. That was one of the first companies that we have had in the incubator, and they did yc. He was also an officer in the army and served in Afghanistan, he had a UAE platoon that he led over there. And I always say he was one of the best founders that I've ever been around. And I think part of that was just the rigor and the discipline that came in, I didn't know him before his military service. And maybe he's always been that way. But it seems like there's some parallels in terms of needing to be able to get the work done, between the military training that you get and just coming in and needing to run a company. So talk about, if you can't see how much overlap there is or isn't, in being a part of a team and leading, especially the leadership component in military service compared to running an early stage startup like you're doing now.


Erik Malmstrom  7:18  

There's huge overlap. It's kind of counterintuitive. But when people ask me, what's the most entrepreneurial experience that I've ever had, despite being in multiple startups, I'd say the army, and maybe that was unique to my experience, and to my generation's experience. But at a young age, I was not in the stereotypical hierarchy and process and heavy structure. I mean, all of that stuff, for sure, is something that you deal with in the army in the military more generally. But in a counterinsurgency, like Afghanistan. I mean, this is a bit of an overstatement, but I was plopped, me and my unit were plopped, into a rugged part of the country where there were a lot of, quote, bad guys, and a lot of other issues. And basically, with minimal guidance and information, charged with figuring stuff out, and then going and advancing the mission. And no one was there, spoon feeding me do this, do that. And I had some commander telling me what to do. I, I and our team had to do that together and build our own intelligence, build our own understanding of what was happening on the ground. And so the big kind of dynamic was, we have an intent that we're operating under, but from there you go is a leader tasked with figuring it out. And then galvanizing your team around that mission. Figuring out what you need to do prioritizing, executing, constantly learning and iterating, when things are not going well, and they will always not go well. And so how you respond to that, how you have feedback loops to kind of improve your understanding, and then your outcomes. That sounds a hell of a lot like a startup to me. And all those behaviors were my career experience out of the gate. And so I think you take that experience, combined with what the military does more generally, which is it. It teaches people leadership and execution and attention to detail, and all the stereotypical stuff that you think about with the military, but also operating with some of those things you can't change, and then you need to be effective within that environment. And I think that that's incredibly relevant. And I think beyond technical skills, which can always be taught to people and trained and I have a kind of mantra that smart people figure it out like you know, someone may not be good at it. Excel, or you know, certain aspects of various things that our business has to do, you know, obviously expertise is needed and valuable in some places. But a lot of times, it's just going and quickly learning to get to a point where you're dangerous. And then you can find other people within your team or bring other people into a team who can then kind of give you the skills and other things you need to do to ultimately drive things forward. So...


Brandon Cardwell  10:26  

Yeah, that's really interesting. Entrepreneurship, and military service, especially, where what you're talking about, essentially, is the need to develop influence when you don't have formal authority, or the ability to unilaterally just dictate outcomes and things. Like you're saying, you're in the middle of a dangerous mountainous region surrounded by locals, how do you build trust? How do you build influence? How do you inspire vision? How do you keep direction and do all those kinds of things that you need to do and, and then figure out the right seats to put people in so they can add to the overall productivity of the team? So you come back. So did you go to Harvard, immediately after your service,


Erik Malmstrom  11:07  

I had a break. So I got back from Afghanistan in the summer of 2007. And I, at the end of my time in Afghanistan, or maybe shortly thereafter, I found out that I want a rotary scholarship, to go to, to East Africa, to Uganda to do a one year kind of master's program in development studies. And that was motivated by me seeing how important the non military aspects of our intervention in Afghanistan, how important they were to ultimately improving the situation on the ground. And so I wanted to go into a different geographic environment with a different kind of history. And learn more about that. So I got this rotary scholarship to go to Uganda for 2008-2009. academic year, I had a year to burn before that. And so I ended up doing active duty National Guard time and the Vermont National Guard where my family was living at the time. So I spent a year up in Vermont, and then went to East Africa, had an amazing experience there where I was in a master's program. I was the only American along with 50 other East Africans, learning about development and getting kind of first hand experience from people who are impacted by development policy. But then on the side was doing a lot of work for various development consultancies. And then came back the summer of 2009, to start my joint MBA public policy Master's at Harvard.


Brandon Cardwell  12:46  

So the Uganda experience, so you say you're studying development. And that was driven in large part by you're realizing the importance of non military interventions, you're talking about NGO work and economic development kinds of work.


Erik Malmstrom  13:01  

The main aspect of non military components of interventions that I was interested in was economic development, and within that private sector development, so you see a lot of economic development work focused on very unsustainable types of approaches to creating jobs and growing the economy. And then there are things where you're creating real businesses, and investing in real businesses that would, that can propel themselves forwards. And so that was what I was interested in: how do you bring capital into these markets? And then how do you build capacity within those markets that connect the capital to businesses that have legitimate growth prospects, and then have sustainable job creation? So that was my focus.


Brandon Cardwell  13:46  

No, that's incredible. And we could probably have an entire podcast episode dedicated to that topic. It's not completely disconnected from the other half of the work that I do outside of the incubator, and and, you know, this podcast and related activities is just trying to figure out how to build sustainable economic ecosystems that don't require heavy amounts of government funds. Obviously, we're not talking about Uganda and not talking about international organizations, but just building capacity, so that you can have these kinds of sustainable self perpetuating ecosystems that support new innovations and economic growth. It's a super interesting topic.


Erik Malmstrom  14:28  

Yeah, totally. I mean, I think the more time you spend in emerging and frontier markets, the more you start seeing unexpected parallels to the US and developed markets. The starting point for various economies is very different and the capacity is, but the themes are very similar and universal in many respects.


Brandon Cardwell  14:48  

Right. Okay, so you finish up in Uganda and you come back and that's when you begin your private sector career in earnest. 


Erik Malmstrom  14:57  

Yeah. So in my My joint degree program quit quickly. Within that program, I linked up with a friend named Jq sock who is a Marine who had done a couple tours in Iraq. And he and I had very similar motivations and experiences in some respects and being kind of proud of our military service, but also seeing a better way for helping countries like Africa, Afghanistan and Iraq, and seeing the role of the private sector in helping these places. And so he and I quickly started talking, and then doing some joint projects together. And then all of a sudden, over the course of our first couple years, we were getting research grants, and then consulting projects to go back to Afghanistan and Iraq, from various government bodies and elsewhere, to basically explore how do you create private sector economies in these frontier and conflict post conflict markets. So he and I, along the way, became semi checked out students who are just flying around to Washington and going to the Middle East, and so forth over the course of our three years. And we started a company, along with one of our other classmates, called CrossBoundary, which is now a leading frontier market investment advisor, and then had a direct investor, they do off grid solar investments throughout Africa, the Middle East, and now moving into Latin America, in multiple continents. But that was just through us kind of having a passion, I think, never initially, or at least I can say, for myself, I didn't do that wanting to start a business of, hey, let's start this business, you would never do that. And then say, let's go to Afghanistan to start doing stuff. But it just kind of grew out of mission orientation and the passion and all of a sudden, you know, we had a business and 10 years later, plus, that's a very successful business.


Brandon Cardwell  17:07  

That's great. So fast forward a couple of years, you become a senior policy adviser and White House fellow. So how did that happen? And what did you do in that role?


Erik Malmstrom  17:19  

Sure. So after grad school, I spent a couple years at Cargill, a big global agribusiness. I was passionate about food, food and agriculture, and the international food system, there's so many aspects of that that have implications for health and nutrition, trade, the environment and sustainability. And so I was doing a lot of work in food and agriculture, including in Africa and other emerging markets. But when you operate in a market, like AG, the government is huge, it has a huge influence on all aspects of what you're doing, the kind of policy and regulatory framework that you operate in the way that incentives are set. And so both understanding the importance of government in the industry that I was focused on, and then having this kind of service and mission focus, and always knowing at some point that I wanted to go back into public service, in some form, there is a great program for someone like me, and for many others called the White House fellowship, where they take people who are generally in their mid career, and coming from all different professional disciplines, to get a year of high level government exposure in the various executive agencies and in the White House, to basically work with the principals of those agencies to go and support things. And part of it is you contributing to the agency's mission, part of it is you mourning and taking those experiences back to whatever you're going to do after the fellowship. And then part of it is just broadening yourself. So there's a whole robust, extracurricular aspect of the program where you're in a cohort of 15 other amazing people each year generally. And then you have this very amazing and surreal experience, where twice a week you're going to a White House fellows office, and you're sitting around a table like we're sitting at with Colin Powell, Karl Rove, you know, the President, whoever, you know, all these various big wigs throughout government, industry, the media, and you get to do open q&a with them. They talk for a little bit and then people within the cohort get to ask questions. And so all of that was just amazing. I, in my experience, I was placed within the US trade representative's office, which is part of the White House and I was there and 2015/ 2016 at the end of the Obama administration, as we were trying to get TPP and other big trade initiatives and investment treaties across the line, and that perfectly coincided with the 2016 presidential campaign, and the populism that was percolating through both the left and the right end of the political spectrum. And we, it was just amazing I was in the eye of the storm as we were working on these big time trade deals that then just confronted very tough politics. And in the end, they didn't get passed. Trade is now kind of orphaned, and I'd say a toxic political issue. And, my experience ended the Friday after the 2016 presidential election, where I was there for the actual election there. Next day, for the all-hands meeting our Trade Representative gave his speech to the staff that I will never forget in terms of people being in a state of shock, disbelief, in some cases, you know, happy for the outcome. But it was a roller coaster. And then Friday, I was out, packed up my stuff in DC and the following Monday, I was out in Silicon Valley starting at an ag tech startup over in San Carlos. So...


Brandon Cardwell  21:21  

So I have to ask this question: did your experience being in that environment make you more or less likely to want to enter public service? Again, outside of the military capacity?


Erik Malmstrom  21:43  

So without going on an extended discourse on this, I still have a very idealistic view of government service and public service. As you can probably tell, it's kind of unique out here in Silicon Valley in the bay area where in some places, I think there's almost kind of derisive ness or condescension towards the government. I mean, in some cases, people acknowledge it's important, but it's a place that they would never want to work in, they're kind of put off by it. Whereas for me, I acknowledge some of their points. But I also still have a semi-romantic view of it. Although I have been in the bowels and the mark of what that is actually like, both from the military and the White House and the bitter politics of trade, where you have people basically yelling at you, you're not getting stuffed on you're constantly under assault. Even despite all of that, I still really respect and admire government service. I think the question for me now is where can I have the greatest impact? That's one question. And right now, there's no question in my mind that it can be in what I'm doing that is much more impactful. That being said, in the future, I don't know. And I think that the next piece of my response is that I think we have some big systemic issues that I asked myself, is it best for me to the extent I want to serve again, to go back into what I consider a very broken kind of system? Or do I try to agitate from the outside to reform things? And do that? So I don't know the answer. At this point, I love what I do. It's SafeTraces, which I know we're going to get to, but I don't close off anything. And I would if there's an opportunity to serve where I feel like I can make a positive impact, then I would definitely consider it.


Brandon Cardwell  23:49  

Great. That's a perfect segue to SafeTraces. So I've been around this company for a long time. They incubated with us. But I've been pretty distant from it for a while. So I personally would love to and I'm sure listeners would love to tell us what SafeTraces is doing, which is incredibly timely and relevant to COVID in the situation we find ourselves in today. But I really also want to get into what indoor air quality looks like beyond this current moment. So give us an update on what's happening with SafeTraces.


Erik Malmstrom  24:23  

Sure. So SafeTraces is a friggin cool company. If I don't say so myself, but we do so in your intro, you talked about who we are and what we do mean. We're a bio sciences plus data science company that is all about safety, using data and technology and largely DNA based technology to address major safety challenges in the world that are touching billions of people -- air quality, food safety and traceability, and even pharmaceuticals. Each of those industries are massive. They're touching people throughout the world. And each of those markets have different safety challenges. Right now in indoor air quality, we have an airborne disease or virus COVID, which is transmitted through people breathing, coughing, sneezing, speaking, and those particles having virus in them that someone else can inhale and become infected. And the question is, when you're exposed to other people, and in a building, how do you know the building is safe? Well, the ventilation system and the filtration system, and its efficacy and removing that particular out of the air is huge. It's not talked about nearly enough. Right now, when you hear about COVID, you're likely to hear about masking and vaccination. And both those issues generally and the politics around them. But building safety and ventilation and filtration is talked about far less, and if I don't want to put a qualifier on it's equally important, but is certainly on the same plane as those in terms of keeping people safe. Beyond COVID. They're just staggering numbers regarding respiratory infections and buildings that I couldn't believe when I first started warning about this, and I'm not an infectious disease person or an epidemiologist or even an H fac person. But the numbers that you see are that within the US seasonal influenza $10 billion of cost per year just in the US for non influenza, respiratory infections, not including COVID $40 million $40 billion per year in the US COVID annual global cost, or sorry, monthly global global costs and disruption, a trillion with a T per month. And a lot of that is due to not only the health care costs, but us not being able to open schools and offices and other places that we're used to going into because we don't know if they're safe or not. So you know that so and that's one I could go on on food and and medicines, which have counterfeiting challenges and foodborne pathogens, where SafeTraces comes into this is that ultimately, our core contention is that you need to baseline risk, assess whether a building in a ventilation system is safe or not. And that is the pathway to figuring out what you need to do to make this space safe. You know, the analogy I use is that


a doctor doesn't start prescribing medication to someone without diagnosing them, you know, seeing them using various technology tools to say, Okay, well, this is what I think the problem is. And then you can do some follow up assessments and then you get a prescription. The same thing should be happening for buildings, but it doesn't partly because one we haven't correctly diagnosed the problem of buildings, or high risk of, of infections. But then secondly, even if we acknowledge that there are not good technology tools available to people to even answer that question of where's that risk in the building or not? What SafeTraces has done is we've engineered particles that can track and trace things. Or they can simulate pathogens, so harmful, harmful things, whether it's an airborne disease, or listeria, or salmonella, or E. coli, and create these traces, tracer particles or surrogate particles that behave like the real deal. But then you can use them in safe ways. And then test how well is a system you know, removing particulates from the air? How well is your sanitizing process in a food processing plant performing? And are you hitting all the right spots, and all that stuff has tremendous value. And in the absence of our technology, in many cases, we're just operating blind, you know, we don't know the risk and then we're not doing the right things. And ultimately, at the end of the day, we're exposing people unnecessarily to tremendous risks that then as right now in COVID, life and death consequences, but even short of that, you know, people get sick all the time. We all anecdotally have experiences where you're at work and you get sick, you just know going into the winter, that you're going to get sick and or your kids go to school, they get sick, they bring it home, and then all of a sudden, people are sick and that all has human cost, health costs and financial costs, that technologies like ours can really help bring down so you know we have these diagnostic solutions with the core technology around tracer particles and surrogate particles that can help you know break into these black box type dynamics and then help make people make better safety decisions and better financial decisions.


Brandon Cardwell  30:00  

So who's the typical customer of SafeTraces indoor air quality solutions?


Erik Malmstrom  30:03  

Sure. So our typical customer, we break it into four categories. So there's corporate real estate, or in real estate lingo, those are more owner occupiers. So you have a big company really, that owns and operates its own space, and they have their own employees in the facility, that would be one category of customers. And we have many in that category. The second is commercial real estate. So landlords, where you have a building owner, and then often, either separately or in some cases with that owner and operating company, and then you have the actual tenants within the building. And we would work generally with the owner or the operator, and they would be the client. The third category is education, both higher ed and K through 12 schools, where we're working with, with school districts and individual schools, and then higher ed institutions in their facilities, teams and EHS teams and leadership teams to solve some of these safety challenges. And then the fourth category is health care. So hospital networks, long term care facilities, nursing homes, and then walk in clinics. And so each of those spaces have different utilizations and would use our technology in different ways to answer different questions. And there's some overlap, but there's also some meaningful variation as well.


Brandon Cardwell  31:25  

So COVID-19 obviously has a crystallizing effect on indoor air quality and the importance of it. I have two school aged kids. And you know, they're spending a lot of time in masks and classrooms right now. And they're good sports, but it's not particularly pleasant. Post COVID. Hopefully, there's a post COVID or there's a post crisis around COVID. What other kinds of problems you talked about other pathogens, you talk about other markets entirely, like food safety? Where do you see the company going from here? And a post COVID? Or, or an additional market kind of way? 


Erik Malmstrom  32:00  

Yeah. So I'll answer that question. And kind of two cuts. First is that we can leverage our technology in multiple customer segments, whether it's the built environment, and indoor air quality, or food and food processing in other parts of the food chain, and pharmaceuticals and even other areas like biosecurity, which is really our roots as a company. It our stage right now, early stage, we need to focus on one of those, you know, and so we're constantly in an exercise of focusing on what is the biggest and most real opportunity where we can have the biggest impact, and then financially perform to the growth kind of targets that we need to perform at. And right now there's no question that the built environment, indoor air quality, is the biggest and the most urgent to your question. And that's not to say that we're not going to pursue the other markets that I mentioned, you know, our goal is to be active in all of those markets. But those are a completely different kind of go to market commercialization processes. And so we've got to choose right now, within indoor air quality in the built environment, to kind of say your question differently, it's like, Who's going to care about this, after COVID, at some point, we're going to get COVID under control, although, you know, asterisk, many scientists are saying it's going to be endemic, but it's not going to be like today, we hopes, you know, sometime within the next few months, you know, maybe six months to a year, and then it's going to be more like seasonal flu. So then who cares about indoor air quality, you know, it's going to be just something that's writing with this big, you know, once in a century event. And honestly, that's something I thought about a lot early on, and some of the skeptics that we dealt with within our team within our investor base. And in the market, they said the same thing. They're like, people are going to get vaccinated, and then no one's going to care, ventilation and filtration in indoor air quality is going to go back to being this problem that we know we have, but no one's willing to do anything about and people aren't going to be willing to spend money on. And I would say that that concern, which was significant for myself early on. I don't view that as a problem anymore. And I'm not just saying that, being very candid. I think that a few things that give me some signals or evidence to support where I am are why I think IAQ is going to be here to stay. Number one COVID itself, it continues to be incredibly painful for people in terms of the human health financial costs associated with it, and it looks like well into next year, we're going to be dealing with this since I'm sorry, I hope that I'm wrong. But I think the reality is we will be. And then back to some of the stats that I quoted before. Even before COVID, we had a huge amount of issues with indoor air quality as it related to diseases and infection that had big dollar numbers and big human costs associated with them. And so there's a lot of focus and attention on not only preparing for the next pandemic and getting us out of COVID, but also now scrutinizing, wow, we had a really high tolerance for getting sick and buildings before why we acted like there's nothing to do about it. But there is. And so now, there's more things afoot, both from a regulation standpoint, from a standards standpoint, from how the facilities management, and DHS, and engineering communities are thinking about indoor air quality, and its impact on human health, to investments that we're seeing from government, and from private investors in the IQ space. And I think all of those are great signs. So I think the indoor air quality is an even anecdotally, you're seeing just the general person, you know, prior to the pandemic, if you asked me even who cares about indoor air quality to D realize that this is something that's so costly and impactful is it is I'd be like, yeah, maybe whatever, and then go on. And I think,


and there are many people in that same boat, I think the cats are out of the bag on this one now that people get it, and there's going to be a long tail. And you can take historical precedents, like the 1918, Spanish flu, a lot of changes happen for the next generation that we still live with today in terms of building operations, design, so forth. So I think we're at a similar inflection point where while we may not be at peak pandemic levels of caring about a queue indefinitely, there's going to be some long lasting impacts of this that are going to create big opportunities for companies like ours and many others to help address this problem.


Brandon Cardwell  37:14  

Yeah, I know, it's a different market. But I think the wildfires in California in particular, have just made this more top of mind for people. And I grew up in Livermore. And we never talked about aq II. And obviously, when there were no smartphone apps, nobody was trying to figure out what the air quality was. And, you know, that's outdoor and potentially residential markets. But I know that the 17 indoor air filters that I have now in my house all have these sensors on them, because people are much more concerned about the quality of the air they breathe. And there's an emerging body of literature that points to the importance of indoor air quality, not just from a pathogen standpoint, but just the overall air quality and cognitive development for people. And if you have schools where air quality is poor inside, that's a very tough learning environment. And I think there's, it seems like there's a lot of opportunity to improve that if for no other reason, we just really haven't done much of anything at all up to this point.


Erik Malmstrom  38:18  

Absolutely. And to just add on to what you said. So there's disease prevention, prevention, infection control, which is kind of a baseline of safety within the space. But beyond that, he points out the cognition benefits of better IQ. And those are clearly established in the literature going back 20 years, that there's some widely cited studies, but it just takes people in an office environment or school environment. And if you ventilation is critical to that. So the ventilation relative to other interventions, is consistently at the top of the list of things that can improve indoor air quality. And so, you're absolutely right, and that helps companies be more productive students learn better, you know, all sorts of positive outcomes, beyond pure health, cognition, and then things like wildfire and all these various natural disasters, and some of which are impacted by climate change. You then have a whole nother branch of indoor air quality that really matters. And then you start getting into an interesting discussion regarding tensions between health and safety, indoor air quality versus sustainability, and green and kind of carbon focused indoor air quality. And those have two very different ways of running ventilation systems. Within buildings. Health and Safety focused IAQ is heavily premised off of bringing in more outside air and filtering at higher levels which have energy and cost and carbon penalty associated with them versus when you're focused on green and reducing carbon, then you're ventilating less generally, and filtering it at lower levels. And I'm simplifying. But then you have to make choices of if you're in California, like last year, and then parts of this year, and you're still in the middle of a pandemic, but then you have wildfires, you may not be able to bring in outside air into a building, because it's worse than having COVID infested air, you know, and so then you have to make choices of what are we going to do? I mean, at some point, you just shut down the building. But to the extent you don't want to do that, you need ways of, you know, informing what's going to be the right balance in our our technology as a way of helping guide those decisions of what's the happy medium between health and safety benefit versus not using too much carbon and too much energy. And using our particles is a way of simulating these respiratory emissions of sick people to then say, well, what's the health and safety ROI? If I'm even ventilating more? Is that producing a positive exposure risk reduction? And then if the answer to that is yes, well, what's the least costly way of doing that, or the least carbon intensive way of doing that? And, you know, when you think about real estate as a category, it's massive in terms of the dollar value associated with the carbon footprint of it. And so we're going to be grappling with all these challenges. You know, for the foreseeable future, a lot of the same people who are signed up for green building type initiatives, like LEED are the same ones who are signed up for Well, you know, in health and safety building practices, and they're, you know, they're signed up for hitting certain goals, whether it's driven by ESG, or having certain other drivers. And they're having to, in real time, think through how we are going to achieve both of these.


Brandon  Cardwell 41:52


So you've you've worked all over the world. Literally all over the world. And you're now running an early stage startup and based in Pleasanton, you're in the Tri-Valley. How does it compare? What's it like here versus many of the other places that you've worked in the United States and all over the world?


What's working for you here? What challenges exist for you here?


Erik Malmstrom 42:15


So I'll be very honest with you. When I first came to SafeTraces and Pleasanton, and I'm not sure if I had ever even been in the East Bay. So I live in San Jose. And then I had been previously working in the peninsula.


I really thought this was like an area that I knew nothing about. And so I came in with fresh eyes. And I have been so not only pleasantly surprised, but also just now an ardent advocate for the Tri-Valley and for this part of the Bay Area in the East Bay, being such a great place for business to live. I think that it offers a number of advantages for our company, number one. I mean, our roots are at Lawrence Livermore and iGate. And so it was natural for us to kind of stay here so that's the first.


Secondly, there is access to incredible talent through the national lab, the schools, you know, other people who are in this area. And that talent is everything for a startup. So that's really important. And for every time someone asks me, well, what about all the people in San Francisco or Oakland or Berkeley or San Jose or whatever, you know, who aren't going to want to commute to Pleasanton, I'm like, well, maybe I don't even need those people. I mean, I don't mean to be dismissive, but there's a ton of talent right around here.


So that's not as big a concern as, you know, people who don't know this area may think it is. I think it would be. But then some other advantages is it's much more affordable, which is a big problem in the Bay Area generally.


You know, for not only the company itself, but for employees who want a certain standard of living, you know, whether they're young, they have families that are older to to be in places where the office is in a very expensive area.


And then they have to live, you know, unless they're willing to commute a lot or you have a remote working kind of set up, then you're commuting into those places or you're wanting to live near there. And there are a lot of drawbacks, you know, given the cost of living versus, you know, salaries and so forth.


So I think that's a really big advantage of this area. And then finally, I just think there's a lot of cool stuff under the radar going on here that people, including myself, didn't even know about, you know, different outdoor attractions or hidden gems in terms of restaurants and other things going on that I think are awesome. 


So I am really a big fan of the Tri-Valley. It's worked out great for SafeTraces. And I continue to think that it's a big advantage for us, too, relative to all the big bio sciences, biotech companies that are in South San Francisco and Berkeley, the places I mentioned.


I think that for us being here is certainly right for us, and I think it would be right for a lot of other companies as well.


Brandon Cardwell 45:30


Well, obviously, I agree with you. And, you know, I think our trajectory is something that has me most excited as well. I grew up in Livermore, been in the Tri-Valley most of my life, and seeing I think you put it really, really well, the sort of cool under the radar stuff.


Obviously, when you're in the Bay Area, the narrative is mostly elsewhere. Good and bad. But in the Tri-Valley, we've seen companies like SafeTraces, which fit in these kinds of spaces that don't always scream for media attention.  Right. Because they're not causing a big problem. And the problem that they're solving is one that is sort of, you know, in this industrial space that is critical for human health, but perhaps isn't as sexy to a journalist, you know, to write about.


And I think the Tri-Valley has a lot of companies like that that are focused on tools and devices and innovations that enable other innovations. And I tell people all the time, the coolest company you've never heard of is probably in the Tri-Valley.


So it's something that seeing how strong our communities have become in terms of their livability and their desirability. And we've seen that certainly over the last year as this area has seen, for better or worse, significant spikes in median home values.


And it has become a little less affordable, still much more affordable relative to the rest of the Bay Area. But the desirability of our communities is driving significant demand for being here, which I think is going to really help companies like SafeTraces as we're seeing professionals and people with technical backgrounds who are living in other parts of the Bay Area and more urban areas come out here for a little more space, a little higher quality of life, better schools, increase your talent access.


And then part of the challenge is figuring out how to sort of maintain all the things that you've spent time working to build, you know, while bringing in lots of people who are going to make it a little bit more expensive to be here.


But hopefully also add to our company's productivity and their ability to grow here. 


So looking out, let's say, five years, 10 years, you pick the number. What do you see as the biggest opportunity and the biggest threat to the success of your company and the success of the region more broadly?


Erik Malmstrom 47:45

So on the biggest opportunity, I think we are at the beginning of indoor air quality, which is our focus right now. We're at the beginning of a kind of a renaissance or whatever you want to call it, where there's just going to be incredible innovation happening.


It's like we realized we had this big problem that for a long time we weren't doing anything. And now people get it and there's more will there's more motivation. And so SafeTraces within that broader dynamic has, in my humble view, which is not so humble, has one of the most exciting and, quote, disruptive technologies in the space to really help understand how we improve indoor air quality. And in my dreams and hopefully in reality, we're going to be getting into lots of buildings to help improve safety.


And I think we're just kind of in the early innings of that. So that's a huge opportunity. And we're doing so much cool stuff in terms of our core R&D and new initiatives and partnerships and all this stuff.


And so that's a big opportunity. And however you want to define it in terms of our mission, in terms of us becoming a big world changing company, all that stuff in our team, you know, growing and continuing to attract great people.


So that's exciting. And I'm excited to make that reality with our team on the challenges side. I think that is kind of within the Tri-Valley a bit. And then just more broadly, I think that is my concern.


So I'll start at a high level. I think the concern I have at this point is kind of the way that the fabric of the country and our community is kind of fraying in some ways, in the many ways we feel less connected with each other.


And some of that is kind of driven by politics. Some of that is symptom a symptom of our politics, but our ability as a society and then even within our kind of community in the Tri-Valley come together, you know, through individual people to school boards, to local government, to industry, to start ups, to basically address some of


these big challenges that we have. And there are a lot of them. There's, you know, beyond the ones that we focus on, there's homelessness and housing. There's climate change and these are big, big challenges. And those are challenges that are not easily solved.


They're ones that for years and decades, we've kicked the can down the road and they're going to start coming into people's lives more and more and more. We're already seeing that if you just go back over the past two years, what we have had to go through between the pandemic to the wildfires, to social unrest with and social justice issues with George Floyd to the politics to now, you know, wildfires. And there are just so many things. And it seems like both the severity and the frequency of these things is going up. And it's kind of concerning to people.


It's exhausting. And we need various people to come together to help solve those things. And so we see ourselves at SafeTraces as a part of that. You know, I think we really are focused on being good community and corporate citizens and wanting to interact not not only with big name companies and solving the world's problems, but helping solve problems right here. I mean, we've done great work within the prison system, you know, and other areas where you would say, well, you know, why is SafeTraces? Some people may say, well, why isn't SafeTraces just chasing our Fortune 50 companies?


We are doing that. But then there's schools and prisons and health care and mass transit and other places that we want to be helping to. So I just hope that from a challenge perspective that we are up to the challenge, you know, in terms of responding as a society to those.


And hopefully the Tri-Valley can be a model for, you know, how we can, you know, in our small way, start addressing some of those.


Brandon Cardwell 52:18

Yeah, I totally agree with you. I think figuring out ways to come together around issues that don't divide quite so cleanly along political lines and removing the opportunity to decontextualize people, which I think is a big problem when we say, well, I'm going to choose my.


I'm going to choose my relationships based entirely on who you voted for in the last election. We lose all kinds of opportunities to collaborate on meaningful problems where we actually agree and share concern. So I think that's a great place for us to leave it and let you get back to doing that meaningful work that you need to do. 


Erik Malmstrom, thanks so much for coming on the podcast.


Erik Malmstrom 53:00

It's a pleasure. Thanks so much for having me.


Brandon Cardwell

Thanks for listening. For more information, go to startuptrivalley.org.