MineSpider: Nathan Williams

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Nathan Williams, CEO & Founder of Minespider, shares the story of his journey and how he sees blockchain revolutionizing the manufacturing industry.

 

 

Danny:

Welcome to today’s Executive Series interview on IndustrialSage. Today, I’m joined by the CEO and founder of Minespider, Nathan Williams. Nathan, thank you so much for joining me today.

Thank you for having me on the show. It’s really a pleasure to be here.

Danny:

So, you’re coming in from Berlin. Is that correct?

There’s quite a happening startup scene here, and I moved because I heard about it back in 2013. Since then, there’s been a huge growth in the cryptocurrency, blockchain, distributed ledger space. And so, it’s really an interesting place to be for blockchain startups like myself.

Danny:

So, for those who aren’t familiar with Minespider, who are you and what do you guys do?

Nathan:

Basically, we are a company that believes everyone has the right to know what they are buying. We do what’s known as supply chain traceability. So, if you buy a smartphone or a car, you don’t necessarily know where it comes from, if one is responsible, if one is. Well, companies have the same problem. They buy a battery. They buy materials, raw metals. They don’t know if one was produced responsibly and the other dump toxins into the water base. And so, what we do is we create digital passports that go alongside that raw material of the supply chain as it gets sold, and it gets stamped along the way so that companies can get a better picture of where their materials come from and under what conditions they were produced.

Danny:

That sounds interesting, but before we get more into that, how’d you get into this space?

Nathan:

Make terrible life choices! (laughs) No, so I’ve started a number of different companies, mostly in the industrial space and mostly because of circumstance. I’ve always been a tech guy. I’ve been a programmer, and I’ve enjoyed that aspect of it, and just people in my network would have certain problems, and it sort of led me into the industrial space. The first startup that I ran ended up tracking fraud in financial documents.

Danny:

Oh, wow.

Nathan:

And so, I built an online system to scan through thousands of financial documents, looking because there was a client who had embezzled a lot of money. And so, we had to look through, statistically, where the anomalies were, and by doing that, you get a certain cohort of people around you with certain skills. And so, then I was talking to some contacts who had similar challenges of getting good data out of a mess of data, and it was in the regulatory space. So, I started a company that was analyzing chemical regulations and seeing, okay, well, what’s going to be banned? What’s banned? Can we analyze the news with an AI and identify when news is going to be about certain chemicals we use? So, that was interesting.

I ended up selling that company, and then at the beginning of 2017, I was looking at what my next step was going to be, and it was right around that time when the current US administration was inaugurated, and there was a Washington Post article around that time that was interviewing a number of people in electronics and the automotive industry that were concerned that the administration would roll back conflict mineral regulations. And so, they had spent a lot of money and time trying to make sure that they were responsible, and they were concerned about this, that they wouldn’t have the support.

And so, I basically spoke to everyone who would speak to me. I said, “Well, look. There’s this new technology coming up. Blockchain, it’s very interesting, and it solves certain problems of why we couldn’t fix this issue of getting good data on our materials before. And so, I’m looking at what’s been tried in this industry already, what worked, what didn’t work, and what were some of the unintended consequences you ran into,” and I spoke to people for maybe about a year. I think that this is a big learning that I had from my previous startups, and a big mistake a lot of new founders will make is that they don’t spend enough time understanding the problems in-depth. They want to jump right into a good solution. I’ve got a good idea. I want to build it.

Danny:

Yeah.

Nathan:

And so, I said, “I’m not going to do that this time. I’m going to look at the problems,” and it was at the end of the first year, after I had been speaking to anyone who would speak to me. I went to the OECD. I went to European Commission. I spoke to people who had been working on this for 10 years, and I tried to summarize all of it in what is now my whitepaper. So, we basically took all of the different needs of the different people, wrote a technical solution of how you could address that, and it was about six months after that that I got a team together, and now this is much bigger than just me. We’ve got 10 people working on the project. We’ve got two big projects now, one with Volkswagen, tracking through the battery supply chain, another one tracking tin out of South America for a couple of big companies, and it’s going very well.

Danny:

Awesome. So, for those who aren’t familiar, what’s a conflict mineral operation?

Nathan:

Okay, so conflict minerals are specifically gold, tin, tantalum, and tungsten. They’re four metals that are often used in electronics that are sourced out of, largely out of the Congo, and the issue with them is that there’s been a civil war going on there for quite a long time, and there are armed groups that will fund themselves by moving in, taking over mines, collecting illegal taxes, and it’s led to many, many deaths. And so, what happened was the US government put in a regulation, Section 1502 of the Dodd Frank Act, which required companies to do their own due diligence to say, “Are we funding these activities?” And then, the SEC came in and developed, more in detail, guidelines for what companies should report, and at the same time, the OECD also produced guidelines that were developed as similarly as the SEC roll-in.

So, nowadays, you have increasing regulation. So, in Europe, next January, I want to say, there’ll be a conflict mineral regulation that comes into force in Europe, which will be a little more broad than the others. It won’t be just those four. They’re going to require companies that import into the European Union to do due diligence, and there are other metals that companies, themselves, are concerned about. They want to protect their brand identity. They don’t want this risk of bad things happening in their supply chain. No one wants to be on television next to forced labor or children working in mines.

Danny:

Right.

Nathan:

And so, they want to have guidelines as to what they can do to prevent that. And so, they’re going to be looking at cobalt. They’re probably going to be looking at, well, gold, tin, tantalum, tungsten, but other materials as well. And so, that’s sort of where it came from, and nowadays, we’re not as focused on just the three-T-G, the gold, tin, tantalum, tungsten. We’re looking more generally at what is responsibility? What is responsible sourcing, and how can I know really that what I’m buying is what I want, is responsibly sourced?

Danny:

Okay, good to know. So, you mentioned that this is your third startup. What did your career look like before that? Have you always been a big entrepreneur?

Nathan:

I’ve always been a bit of an entrepreneur, and I think a lot of this is in hindsight, right? I look back in sort of the direction my career has, and I sort of clump different tasks and jobs and projects and things I tried together, but really, as an entrepreneur, I have always desired to be an inventor, even since I was a young boy. I had this idea, this vision, of inventing things and tinkering and building new things, and I happened to be at the right age when the internet started to take off, and I joined a startup early on back in 2000 that failed horribly because it was one of many startups that didn’t go so well, but it gave me the taste for building software, of solving problems, and of being in this environment of trying to make something new and just sort of running on my own and seeing if I could make it.

And so, I lived in Canada for the majority of my life. I went to school in Montreal, and I had started a number of different enterprises there, but they weren’t really as cohesive as they are today. It was only after I went back to school and got my MBA, when I was getting frustrated at starting things and trying to sell some things. I started a hand-made jewelry business at one point with my wife. I had started a software development business on the side, right out of university, but I felt like I was missing this aspect of, how do you actually run a business and make it successful. And so, I went back to school, got my MBA, and there’s a lot actually of people that are sort of down on business studies and the MBA and saying, “Oh, just go out and study,” but honestly, it helped me understand so much, just how this whole system is supposed to operate, and after graduation, I basically said, “Okay, let’s uproot, start in a new place. Go to Germany.” I heard good things about it. Big startup scene there, and it’s just taking off. Let’s go be part of it.

I came here and met as many entrepreneurs as I could and went to every event, shook everybody’s hand, volunteered with the Startups Association back at the time, and organized events for them, just so I could get a sense of how this entrepreneur in the startup space worked, the business angle of it, and, yeah, then one of my contacts, I was talking with them, and started that first startup. I basically was at a point where I said, “I need a life reboot.” So, I just went back, devoted to studying, to figuring out, okay, how is the traditional business world work, and how can I fit within it?

Danny:

So, has there been anybody who’s really had a big impact on your career in some way? Maybe a mentor or somebody else. Maybe it’s an event.

Nathan:

I remember reading something a while ago. I think it was in a leadership book that I’ve forgotten who it was, and I remember it was that Obi-Wan Kenobi is not for hire. In the same way, I’ve never had a specific one person mentor, but I’ve had many people who’ve helped me with many different problems. I think, in terms of other entrepreneurs that I’ve looked up to but I’ve never met, I really appreciate the approach that Elon Musk has, of course, because he’s very good at communicating a vision and getting people excited about it, and especially in an industrial space or a business-to-business space. I think people forget how important it is to give your customers the ability to sell up to their boss or to make them feel excited to be part of the transformation or something that could be really big, and that’s something I’ve always appreciated about what Musk has been able to do. But yeah, there have been many people that I’ve met along the journey that have been very, very helpful for different aspects, but I’ve never had one specific mentor.

Danny:

That makes sense. So, what’s something that you really took away from that pause in going through your MBA?

Nathan:

I remember back, thinking, before I started the MBA, that I really didn’t understand money and what it was used for, and at the beginning, I remember just looking at a balance sheet for a grocery store, thinking, “How much do they spend on rent?” $200,000 a month for a big unit, and I was like, “That is more money than I’ve ever seen in my lifetime. How is that possible that you could spend that a month?” And it was, partly, it was just a mentality shift that I had, and I remember around that time, explaining this, that I feel like I’m missing something in how I’m viewing the business space, and being directed to something like a book like “Rich Dad, Poor Dad,” and I remember looking at that and thinking, “That is not what I’m looking for.”

Danny:

Yeah.

Nathan:

And all apologies to those who found it helpful, but what was very helpful I think was just seeing this different mentality of money is not a treasure I want to hold onto. It is a resource that helps me accomplish what I want to do, and moving into that space, out of this I’m trying to collect money and to use it as my own personal treasure versus I’m trying to use it as a lubricant to accomplish big things and do big projects was one of the first most helpful things, and I remember that was driven home during the MBA when I did an exchange, and part of it is, I remember, we did an exchange to New York, and I remember visiting the NASDAQ and just seeing sort of how there’s a lot of negative things you could say about the Wall Street mentality and the stock exchange and all of that, but there’s a lot of positive as well, and that was my first sort of entry into the world where you see big money can accomplish big things, and this is part of the world we live in. It’s neat to see the positive side of that.

Danny:

Yeah, so from what you’ve seen, even in undergrad, the idea of handling money really is never explained.

Nathan:

I think that education is meant to prepare us for work, for working for someone else, and not everyone should be an entrepreneur. It’s a much riskier endeavor. It’s a riskier life, and I think that what I ran into was I wanted to be an entrepreneur, but I still had sort of a mentality of someone who was working for a salary, and I wasn’t really able to see beyond that of how you could use your money as an asset or as a resource in a way, but I wanted to, and I knew that was needed, and I think that’s sort of normal. I don’t think that there’s that much entrepreneur education out there. A lot of entrepreneurs I’ve met are really not comfortable working for other people.

Danny:

Yeah, yeah.

Nathan:

I’ve always had a bit of that problem. There’s a certain amount of responsibility that comes with it of course that not everyone wants, and there’s a certain amount of needing to be a bit of a generalist and sort of know enough to get yourself in trouble in a bunch of different topics, and not everyone likes that.

Danny:

Yeah.

Nathan:

So, yeah. You can be creative, and you can have a fair bit of control working for someone else. Not everyone needs to be that entrepreneur.

Danny:

Exactly. So, today, what’s the thing that gets you excited and out of the bed? Every morning you said, “I just can’t wait to do this.”

Nathan:

I like solving big problems, and especially I think we live in an age where we all feel very powerless, and especially in the past few years, we have things such as global pandemics. We’re trapped in our houses. We hear negative things on the news that we have zero control over, and we feel very anxious. I like the fact that I can wake up every day and solve a big problem that no one really knows how to solve, but I’m working on it, and I might have part of the solution, and the people that we’re working with are helping. And so, we’re part of something bigger than ourselves, and it can have a real impact in the lives of poor people living in rural areas around the world. It can have an impact on regular people who don’t want their waterways poisoned, and it can have an impact on big companies and us in western countries who want to see what we’re actually buying and the footprint of it.

Danny:

Yeah, so let’s dive into the challenges facing the industry today, and there’s definitely a lot of them. What are some that you think that this virus has brought into the forefront of the space?

Nathan:

One of the biggest challenges, and it doesn’t matter if you want to track your carbon emissions versus the responsibility of your metal versus… It doesn’t matter what you want to track. There’s a problem of too many standards. Everyone’s got their own way of measuring success, and it’s hard to mesh that together. Even if you get everyone participating and submitting their data, how do you mesh it together? And it requires experts, and the problem is that if you get a lot of people that are experts and know a lot of details, you can get lost in these details, and it’s a big enough challenge to convince everyone to work together before you start getting lost in details. And so, from my point of view, the best approach is to just get as much participation as possible. Getting a lot of companies to submit a little data. I’m participating responsibly. I want to. I’m doing a self-assessment. That’s better than no assessment.

So, that’s just a challenge in general to traceability. A challenge that these companies are facing is going to be, number one, knowing is it being sourced in environmentally responsible ways? Because the environment is probably the biggest question mark out there, and that can range from everything from are the waterways not being contaminated? Are we using chemicals that aren’t polluting the people around us or poisoning the workers? And if we are using those chemicals, are they being handled properly? Do we have policies about that? Carbon emissions, of course, is a bigger and bigger topic, especially because it’s one that most people don’t feel they have control over, but we see as an issue. And then, of course, moving into human rights, are there negative groups that are taking advantage of people? Are there forced labor workers that are contributing and getting me, is my lifestyle based on the pain and suffering of a five-year-old child working in toil? No one wants that, and I think that these are going to be huge challenges because no one knows exactly, first of all, where it’s going. We all sort of know that it’s going but not where and in what products and to what degree, and once we find that out, we don’t know how to keep measuring it properly, and once we find that out, we don’t know how to fix them. And it’s a tangled web, and the first step of it is just knowing who is in my supply chain, and what measures are each one of those actors playing? That’s a good start. Now, post-COVID, of course, we have this other problem.

Danny:

Yes.

Nathan:

The problem of availability of supply. So, we’ve already seen that if the world’s manufacturing is done in one region of the world, and that region has a crisis, then it can disrupt supply chains all around the world, and I think that going forward, most companies are going to want, at very minimum, to make sure that they’re not sourcing from one area. It’s not about China. It’s not about China versus the US. It’s not about geopolitics yet. What it’s about is about a diversity of supply so that if we have a problem in one area that it doesn’t have a ripple effect to the others and so that I’m stable.

I mean, 50 years ago, we had a couple of key materials that we needed. Now, with electronics, we have so many rare earths. The list of critical components that we can’t manufacture, our devices, our key things that we live our lives with, has just grown exponentially. We’ve got a few hundred of them, and many of them are going to be flowing through the same regions. So, we need to know that, and we need to take action to make sure that there are supplies that are diversified, especially in complex industries. Automotive, electronic, anything that has sort of a few hundred to a few thousand suppliers, just in time is a bigger danger there because you miss one critical component out of 60, 70, 80,000, and suddenly you can’t manufacture anymore, and that’s a much bigger risk than say someone working with wood, with paint, and then they’ve got like five things that they were dependent on.

Danny:

Definitely. So, how do you think Minespider’s helping to solve some of these problems with visibility and traceability?

Nathan:

Basically, more data is more power. That’s what it is, and if you’ve got a knowledge of who’s in your supply chain, if you’ve got a rough knowledge of where your materials are coming from and how much of them there is in different places, then you can take action. So, we don’t have one product. What we have is a whole platform. So, we’ve built, essentially what I like to describe as sort of the internet for responsible supply chain traceability. We have this system to create passports, and then we have an app on top of it, but you can have any number of apps. You can have an app that tracks quantities and regions and how much stockpile each one has. You can go the other way around, and you can say, “We’re going to build an app that throws red flags if there are a certain force measure of supply chain issues, so that we’ve got a heads-up and can take action before it becomes a supply chain disruption,” and that’s sort of the beauty of building a flexible system like that. With what we have today, we’re already tracking and being able to prove authenticity of materials, so where they come from. Do they come from this source, and what data do we have on it to prove it? And though, this is the sort of thing that can help even with regulatory compliance, like we want to keep importing, or we want to make sure that we’re not delayed, that our supplies aren’t delayed at the border.

Danny:

Yeah, and we’ve talked about blockchain on the show before. Have you seen a lot of misconceptions around it? Because it’s, quite honestly, a super complicated thing.

Nathan:

That would be an apt way of describing it. I remember when I got started in 2017. I was actually introduced to blockchain through a TED Talk, through someone I know, and he said, “You should look at blockchain now that you’re looking at what technology to work with conflict minerals,” and I said, “Blockchain?” Isn’t that–“

Danny:

“Bitcoin?”

Nathan:

“Isn’t that the magic internet money to buy drugs on the internet or something?” But no. It’s true. There is a lot of misinformation of it, but what it essentially boils down to, it’s the solution to the problem of trust. We could have built a system that would have been much faster, much easier to use, much quicker to develop on a single database 10 years ago. The problem is, you’ve got different companies that do not want to share data. You’ve got companies running in different countries. So, you don’t necessarily have one regulatory body that you want to trust with the data. You don’t necessarily want to trust me with all the data because that is a lot of power if I know how much material everyone has all around the world and can pay for it.

So, designing this type of system required what’s called decentralization. You should own your data. You should have total control of your data, and you should be able to decide who it gets shared with, and I shouldn’t have a backdoor password to it. That’s just what it comes down to. It means that you as an individual have more responsibility, but you also have more control. And so, this is where blockchain really shines. If you don’t have that problem of trust that you want the data to remain unchanged, to be provable, to be mutable, and to be self-sovereign so that, self-sovereign just meaning that you have total control over it, then maybe a regular database is a better solution.

Danny:

Yeah, I agree, and I think I’ve seen this before, but do you think that a lot more companies are going to be discussing it now more than ever before.

Nathan:

I expect so. I expect so, and I think that in the near-term, companies that were caught off guard by coronavirus and by supply chain disruption are probably, well, first, near-term, they’re going to be basically trying to scramble to get back online, but medium-term, everyone is going to want to know, at very list, their tier twos.

Danny:

Yeah.

Nathan:

Everyone already knows their tier ones, but you should know who your tier twos are and have a better idea of where your risks are.

Danny:

Exactly. Well, Nathan, listen. I really appreciate your time. For those who would like to learn more about Minespider, where can they go?

Nathan:

So you can visit our website at www.minespider.com. You can follow us on LinkedIn. LinkedIn/minespider, company in there, and I also post a lot on LinkedIn as well, and we’ve got our own blogs and own communications where we talk about all things blockchain and how it can be applied to this space.

Danny:

Perfect. Well, thanks again so much for joining me today.

Nathan:

Thank you so much for having me on the show.

Danny:

Well, that’s a wrap for today’s episode. Thank you so much for joining me on the IndustrialSage Executive Series. We do this every week. Join me next week as I interview another guest and bring you some great content. Listen, if you are listening on any of the podcast stations, we’d love a review. If you are not on our email list, and you want to get this great content sent to you every single week and then some, go to industrialsage.com and sign up for our email newsletters, and there’s a lot of other content you can sign up for if you want. We’ve got other series, and manufacturing news, and you can sign up for all of it or choose which ones you want. So, don’t miss out, go do that today, and I’ll be back next week with another episode of IndustrialSage. Thanks for watching.

 

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